cpsp chapter 4 defining the business
TRANSCRIPT
Need to break broad groups into units
Strategic Business Units
Industry Labels too Broad
What units?
•Pinpoint strategic effort
•Performance measures
•Basis for resource allocation
Strategic Business Units
Number available on-line October 2014: 954
Cheapest: Boots Essential Anti-Dandruff Shampoo: £0.62 per 100ml.
Dearest: La Science Anti-Hair Loss Serum: £29.99 per 100 ml.
Dearest = Cheapest x 48.3Why?
They are in different product-market segments
Shampoos are defined differently
Defining the Shampoo Business
Comm
oditi
es a
nd B
rand
s
Markets
Pro
duct
s
MothersYoung
WomenChildren Babies Men Sports
Family x x x x x
Mild/Baby x x x
Dandruff x x x x
Dry scalp x x x x
Ethnic x x x
Beauty x x
Bounce x x
Shine x x x
Colouring x x
Volumising x
Shampoo & Conditioner
x x
Frequent use
x
Defining the Shampoo Business
Markets
Pro
duct
sDefining the Shampoo Business
Mothers, Children &
Babies
Young Women
Men Sports
Family, Mild/Baby, x x x x
Dandruff, Dry Scalp, Volumising
x x x
Ethnic x x x
Beauty, Bounce, Shine, Colouring
x x
Shampoo & Conditioner, Frequent use
x x
Segment marketsSegment products
Cluster back
Manageable product-market segments
Repeat
Maximum of 7 products
Defining Business Units Stage 1
Stage 2: The generic characteristics of the units
1. Well defined contiguous set of products or services
2. Relatively homogeneous group of customers
3. Distinct set of competitors
4. Pinpoint strategic marketing effort
5. Allocate resources and measure performance
Defining the Business: Stage 2
1. Different marketing skills?: Separate
3. Different stages in the life cycle?: Separate
4. Different competitive positions?: Separate
2. Different basic technologies?: Separate
5. Different distribution channels?: Separate
Guidelines to combine or separate
M1 M2 M3 M4 M5 M6 NM1 Sales
P1
P2
P3
P4
P5
P6
NP1
NP2
Sales
Markets/Customers
Pro
du
cts
A product-market matrix for 201X and 201Z
Develop Your Product Market Matrix
NP1 = New Product 1, NM1 = New Market 1