PPT OF ELEGANT FURNITURES CASE SHOWN IN THE CLASS JAN 18, 2015
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ELECTIVE : CUSTOMER ACQUISITION IIM-K Elegant Furniture Case Starting a business for the first time Market selection, Value Proposition, Market Connect How to set up the connecting function
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Transcript of PPT OF ELEGANT FURNITURES CASE SHOWN IN THE CLASS JAN 18, 2015
ELECTIVE : CUSTOMER ACQUISITION
IIM-K
E l e g a n t F u r n i t u r e C a s e
Starting a business for the first time
Market selection, Value Proposition, Market Connect
How to set up the connecting function
Cannot take important decisions What assets are needed by the business
without knowing the strategy
Tangible
– Physical
– Financial
Intangible
– Human
– Structural
– Relational
How to create MVC
Choosing Target Market
To Identify an Attractive Market in the first place and then to learn enough about it so that you can develop a differentiated marketing mix which is focused on the willingness to pay of the chosen customers
•Tool : 5 Cs
Context : Fitted Kitchens
Who are the Customers
65% of the spending on kitchen is for “new
kitchens”. And the money spent goes 50% on
cabinetry, 35% on gadgets and 15% civil work.
Concept : How to choose markets Size, growth rate , access, fit
Decisions Chosen : Cabinetry business for new kitchens
Quiz : Why not to choose all the segments
Who are The Competitors
There are two main types of competitors Self employed carpenters in unorganized sector
European brands : High end brands whose kitchens are expensive
Concept : Tools for choosing a competitor Can you differentiate
Can you sustain the differentiate through your capabilities
Carving a segment from the competitor is easier than killing him
Should not be too small or too big
Chosen competitor Self employed carpenters
Who are the Collaborators
Definition of who is a collaborator Collaborator’s sale goes up when yours does. And vice versa.
The target audience is the same but you do not compete
Possible collaborators Hardware stores, Builders
Concept : You + Collaborators = Marketing Mix
Chosen collaborator Builders for sales
Hardware stores for installation and after sales service
Creating Value Proposition
To develop a value proposition that (1) uses the company’s capabilities (2) To attract the selected market (3) to fight the selected competitor (4) that can utilize the planned connections
• Positioning
• Marketing Mix (7Ps)
• Delivery = You + Business Partners
Remember Wallace Fort and Everwrite Pens
“Discover Customer’s Dilemma”
Imported Brands.
Few High End Stores.
Long sales cycle.
Imported after order.
Carpenter / Contractor.
Customized on-site work.
Shorter cycle.
Mess for months.
Unreliable finish.
FINISH HIGH CLASS
PRICE VERY HIGH
FULFILMENT TIME HIGH ( ON ORDER)
INSTALLATION TIME 2 – 4 DAYS
AVAILABILITY FEW OUTLETS 6 CITIES
AVERAGE
AVERAGE
LOW ( MATERIAL READY)
SEVERAL WEEKS ON SITE
30000 OUTLETS IN 200 CITIES
Poggen Pohl Local carpenter / contractor
FINISH HIGH CLASS
PRICE IN BETWEEN
FULFILMENT TIME LOW ( READY COMPONENTS)
INSTALLATION TIME 2 DAYS
AVAILABILITY IN 20 CITIES
Ours
Positioning
Target Audience / Application : New kitchen segment / Cabinetry
Target Competitor ( What are they doing now ) : Not confident if what they
are paying is right. Not sure if what they are getting is well done. Finish
not good. Cost overrun. Time overrun. The work goes on for weeks and
there is a mess in the house.
Our offer : You get what you see. Better finish. Fixed prices, Installation in 48
hours. Warranty of finish and quality. Designer advice.
How is our offer better than what they are doing now?
The Next Step is operating specifications
PRODUCT
PLACE
PRICE
PROMOTION
PEOPLE
PROCESS
PROOF
Marketing Mix
Product Gold range : 4 types off-the-shelf mix-&-match kitchens
Platinum range : 12 types of kitchens on order : 60 days
Professional finish not found in local carpenter jobs
Customized to your choice and space by expert designers
Warranty of finish, quality, repair and after sales service
All installed in 2 days at your site; in 90% less time
Price 20% higher than local carpenters.
30% lower than imported high end European brands
Place 20 Towns with 70% of TA : 12 Mn SEC A+B households
Connect to Market To connect your value proposition to the chosen market by creating appropriate “touch points” that locate, contact, convince, close, transact and stay connected
• Buyer Personas and their buying journey
• Designing a Sales process based on the buying journey of target customers
• Matrix of touch points
•Creating organizational structure and staffing it with the right people
Working Out Connection Strategy
Strategy : Sales (Connection ) Architecture Map the environment within which selling / connecting will work
Define profile of the “BANT” customers
Segment these into different “Buying Personas”
Develop “Buying Journey” for each persona
Map your “Sales Process” onto the journey
Create a “Touch Points Matrix”
Organization : Sales (Connection) Organization Enablers for each touch point : Staff, Skills, Script, milestones
Systems : Metrics and SOPs
Structure : setting goals , review, coaching and development
Elegant : Selling Environment Analysis
for Ahmedabad
1. Size of the target audience : Less than 1000 at any one time in A
2. Housewife has more say than the husband
3. She wants advice, design, finish, fast installation
4. She and husband not difficult to access
5. Kitchen is her pride and she does not want to risk
6. Competitors (carpenters) go through references and work at sites
7. Customized “look” that matches décor and is unique is appreciated
8. Never bought a ready kitchen before
9. Seen kitchen furniture in other’s houses
10. She has no clear criteria
11. She finds it difficult to specify technically
12. Decision Making Unit : primarily housewife , husband, friends
13. We have reduced complexity and yet kept scope for customization
Creating Specific Buying Journey Buying Persona : Housewife who has booked a new flat
Booked a new flat
Occupation date nears
Searches for choices
Chooses model from catalog
Negotiates
Advancce
Creating Elegant’s selling process
Booked a new flat
Occupation date nears
Searches for choices
Chooses model from catalog
Negotiates
Advancce
Contact and tie up with builders to give customer data
Send mailers, take appointment
Meet , Show, Explain
Multiple visits may be needed
Booking and Advance Taken
Touch Points Matrix and organization
(Chronologically)
Contact / tie up builders to get customer database : builder sales force
Mailings : agency and branches
Take appointment on the phone : branch operator
Meet in customer’s house and show, explain, answer : “elegant lady”
Meet to provide designer sketches : :elegant lady”
Take the order, pick up the advance, complete paperwork : “elegant lady”
Take the follow up order from the builder : builder sales force
Invoice the builder : builder sales force
Install the kitchen : service department
Collect money from customer : “elegant lady”
Get paid by the builder : builder sales force
Follow up calls and make service available : service department
Touch Points Matrix and organization
(Department Wise)
Builder Sales Force Contact / tie up builders to get customer database Take the follow up order from the builder Invoice the builder : builder sales force Get paid by the builder : builder sales force
Agency Create Mailers : agency
Branch Manager Do the mailing : branch manager Take appointment on the phone : branch operator
Elegant Lady Meet in customer’s house and show, explain, answer Meet to provide designer sketches Take the order, pick up the advance, complete paperwork Collect money from customer : “elegant lady”
Service Department Install, follow up, service, CRM
2 types of customers : 2 “sales funnels”
Builder permits to give
access to flat owners
Builder permits to give
access to flat owners
Flat Owner agrees to
buy kitchen as extra
Flat Owner agrees to
buy kitchen as extra
Builder orders kitchen Builder orders kitchen
We get and fit the
kitchen
We get and fit the
kitchen
Flat Owner expresses
satisfaction
Flat Owner expresses
satisfaction
We get paid by the
Builder
We get paid by the
Builder
Builders Flat Owner
We have 3 types of sales forces
SALES FOCE DEALING WITH BUILDERS To contact, recruit, convince and contract builders.
To train their sales force and regularly coordinate with them
SALES FORCE DEALING WITH END CUSTOMERS To fix appointment, show catalog, give designed advice
Book order and collect advance
SERVICE FORCE FOR INSTALLATION / REPAIRS To contact and recruit franchisees
To train their technicians and regularly coordinate with them
Person Specification
Builder Sales Force Able to deal with the top / operating managers Skilled in training and supervision Good commercial acumen Degree in commerce or MBA At least 30 years of age : 5-7 years experience Full time employee of management cadre
Custom Designers Ability to understand people and sell Good design and practical kitchen sense Housewives with aptitude on per call basis
Technical Service Outsourced to hardware stores with fixed network On per installation basis
Org Structure for each 20 L Population
Branch Manager Branch Manager
Servicing Executives
PR & Training Executive
Accounts & Warehouse
Manager – Tech/ Service
Manager Custom Design Manager - Custom Design
Manages and Opens Accounts
Service opened accounts on a day to day basis
Organizes training and PR materials and demonstrations
Creates and manages partnership network of housewives
Creates and manages partnership network of hardware stores
Manages expenses, stock and transactions and payments
