Alternative Strategic Options

Looking beyond the immediate battles - Meeting market needs

To successfully address the paradigm shift we need New Models, New Approaches, New Relationships, and Flexible Actions.

New Models

From Supply-side to Demand-side Thinking

	The market needs what we are making now and what we have been successfully making in the past. We just need to make ourselves heard. Our reputation and tradition will do the rest.
	What life events do people face? What do our customer actually need to meet these particular situation? What are their hopes, dreams and aspirations? How can we help them to realise these?

From Stand-alone offerings to Integrated Life Event offerings

	Separate products that customer slot into his/her overall package of solutions. Each offering must be profitable in its own right.
	Products that address life's different needs as defined by each customer in their unique way. The Products are linked to, and integrated with other products, often from associated or complementary industries. Customer's Life Time value is a key measure.

From Fixed Immediate Needs to Fluid Whole Life Dreams and Realities

	What do you need to-day? (e.g. renew my motor insurance). If people's situation changes then that's an opportunity to replace the old product and make another sale.
	These are our customer's aspirations, desires, beliefs and values. How can we help them to realise them? If their situation change for better or worse how will our products adapt to their new needs without penalty?

From Standard Offerings to Mass Personalisation and Customisation

	Pre-designed products with no or few options. Once specified and purchased they cannot be changed.
	Component based offerings that can be assembled and linked in an wide variety of ways. We provide best of breed components, and if necessary we will source from 3rd parties but ensure they are seamlessly integrated. They can be changed to adapt to customer's changing needs and circumstances.

From Make and Sell to Sense and Respond

Design a mass market product together with the required administrative procedures.
Produce the product promotional material and product documentation.
Acquire and train the staff. make extensive use of scripts.
Distribute far and wide.
Display the promotional material.
Wait for customers to acquire.
Hope they can use them without too much support.

Design and build components that can be flexibly assembled into unique products.
Design and build decision support systems (DSS) for use by field staff, agents and customers.
Distribute component specifications and DSS.
Acquire and train staff who can explore peoples needs etc. supported by the DSS.
Produce the promotional material, relating it to these needs etc. and emphasising the uniqueness of the delivered product.
Understand each customer's needs and explore with them various scenarios.
Concurrently design an appropriate product.
Produce the product.
Help customers use the product and continue to adapt it to their changing needs etc..
Continually adapt and replace components as overall needs change.

From Unidirectional Information to Interactive Product Development & Manufacture

Design, printing and distribution of 10,000 brochures.
Expensive advertisements in the press and magazines, on billboard, and on radio and TV.
Wait for the consumers to then call inorder to buy.
Try to segment market based on the sales made.

Customer become integrated with the product development cycle.
They express their needs and explore various options and life scenarios.
They concurrently design an appropriate product.
The product is supported by valued added applications and information.
Use and adaption of the product is directly fed back to the component developers.
New components and changes to the DSS are made to reflect the changing environment.
Customers are individually notified of new opportunities that are relevant to their situation.

New Approaches

Marketing

Use of sophisticated market knowledge to pin-point the needs, buying behaviour, and economics of individual customers and customer segments.
Gearing product, marketing, and distribution strategies to attract customers and forge relationships with those that will be the most profitable to serve.

Product Development

Cycle time reduction - new products to market faster.
Flexible component based development.
Innovation that has value in the customer's eyes.

Product Differentiation

Mass Customisation to tailor each product to the customers need.
- Establishment of product components backed up by comprehensive product database and rules database.
- Starter products to for typical situations - variations around a theme.

Product Cost

Mass Customisation built on common product building blocks.
- Customer to be involved in the customisation.
- Easy to use product customisation systems.
Modularity serves both economies of scale and economies of scope.
- Economies of scale are gained through the use of components rather than products.
- Economies of scope by using modular components over and over again.

Product Distribution

Adopting innovative channel strategies, often entailing the establishment of multi-channel networks.
- Look to embed your products and services in other products (e.g. software, other companies web sites)
- Look to complement other suppliers products and services.
Role of information intermediary:
- save cost and time required to access information oneself - information overload problem
- look for total solutions
- be a trusted third-party
Proactively managing those channels.

New Relationships

Relationship-building

From monologue to dialogue.
Zero-loss learning - every point of contact with the customer as a potential learning experience.
- Information doesn't always come from customer satisfaction surveys or a historical record of purchases. Complaints ..., compliments ..., preferences...., or demands made .... . It needs frequent interaction.
- Customer satisfaction is not an indicator of the future propensity to purchase your products.
- Behaviour: Ask what they've done in the past; about their intentions.
- Life event marketing: Marriage, new home, kids to college....
As a relationship matures, the knowledge base becomes more comprehensive and more accurate. Leads to repeat orders.
- Customer fulfillment when completing orders and delivering goods or services.
- Customer support when providing ongoing service once a product or service has been delivered.
Once customer information is captured, it must be channeled to those who can use it.

Customer Acquisition & Retention

Understanding individual needs, aspirations, values and beliefs and value to the company.
Provided added value services
- Use IT to link up with other service providers for information or associated products (e.g. solicitor for house purchase)
- No commodities; People will pay for personalisation, flexibility, reliability, convenience, comfort, consistency.
- "Address my needs. Make me feel good".
Suggesting tailored product offerings
- Customise advertising content, based on the customer profile or input, etc.
Deliver in a powerful way:
- Use imagery and metaphor but don't appear boring (e.g. don't replicate a bank branch!)
- Use multi-media as appropriate: text, voice, drawings, animation, video (provide alternatives)
Developing and maintaining customer relationship
- Products which diagnose themselves and suggest updates or replacement.
- Knowledge-based systems which assist customers in finding solutions for their problems or changing circumstances ("health checks")
Relationship marketing provides a switching barrier, as customers would have to "teach" a competitor all that information.

Flexible Actions

Solution Selling

Mass Customisation to tailor each product to the customers need. - micro marketing.
- Knowledgeable sales systems that can define and assemble a viable and suitable custom product.
- Supplier or customer assembly depending on desires, confidence, circumstances of the customer.
- Ability to tap into intelligent and interactive help: help text; e-mail; telephone conversation; face to face.
- Ability to "take-over" or "hand-over" at any step in the process.
- Ability to suspend and return at a later time.
`Interactive selling' to provide a high degree of integration between assembler, suppliers and customer - co-production.
- This produces a powerful synergy with an almost automatic buy-in.

Customer Servicing

Choice of ways of doing business (self service, attendant service)
Business around the clock

Product Servicing

Products must be amendable as customer's circumstances change
Supportive service systems that are knowledgeable about the particular customer's product.
Supplier or customer initiated changes depending on desires, confidence, circumstances of the customer.

Organisational and Other Issues

Address all dimensions in a holistic fashion
- The mechanistic dimensions (such as processes, organizational structures, and technologies)
- The "people" or human dimensions (such as culture and behaviours).
Be prepared for the restructuring of your industry.
- Dual roles: e.g. both a direct supplier to the customer and a sub-supplier at the same time.
Don't leave it too late to get on-board.
- The Internet is like a train leaving the station and gathering speed .......
- It is very often an iterative process, requiring organisations to try new offerings, and tweak them according to customer feedback.
Customer concerns about data privacy
- make customers aware of the benefits of volunteering this data (e.g. products better suited to their needs, no inappropriate mail shots)
- offer material incentives; not money but value added applications that gain in value as more information is provided.

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