Bronner Slosberg Humphrey Case Analysis Mkt 642

1
Bronner Slosberg HumphreyCase Analysis Mkt 642

• Presented by
• Michael Miyagishima
• Peter Atmali

2
Bronner Slosberg Humphrey

• Founded in 1980 as Eastern Exclusives
• Distributing coupon books
• Early customers American Express and ATT
• Provides relationship marketing services
• Mission Statement Enable and assist clients to
  maximize the value of their customer base, and
  return on their customer base investments, across
  all points of contact

3
Bronner Slosberg Humphrey

• Small client roster
• 80-20 rule
• Strategic Interactive Group (SIG)
• Wholly owned separate entity
• Internet capabilities
• Ways to grow - add customers, add capabilities,
  both?
• Now known as Digitas

4
Eastern Exclusives

• Direct marketing
• Bring companies together to create value
• American Express local establishments
• ATT GE, American Air, JC Penney
• Measurements based on response rates
• Segmenting customers by value
• Profitable customers

5
Behavior Optimization

• Behavior gap analysis
• Customers actual behavior
• Desired behavior
• Economic value of closing gap
• Focus on market communications
• Relied on database management modeling,
  teleservices, and creative advertising

6
Customer Base Management

• Evolved from Behavior Optimization
• Includes all sales and service interactions
• Client may have to undergo structural changes
• Example FedEx

7
Bronners Contribution to FedEx

• FedExs Problems
• Weak market
• Increased competition
• Stagnant growth
• Information overload
• Little understanding of customers
• FedExs Marketing Strategy
• Mass marketing list rate structure
• Solution Construct a more comprehensive database

8
Bronners Contribution to FedEx

• What Bronner learned
• Dual account
• Volumes classes of service with other shippers
• Service requirements
• Who values on-time delivery vs. fast shipment
• Early delivery options
• Greater use of computers

9
Bronners Contribution to FedEx

• Pilot test different prices and services to some
  customers
• Segmenting the market
• Cost less than 5 million
• ROI 50 million in incremental revenue

10
Reducing Behavior Gap

• Assigning segment managers responsibilities
• Implement customer base management procedure
• Learning from experience
• Placing high value on FedExs best customers
• Deepened customer loyalty

11
Would All Companies Benefit?

• Segmenting and targeting customers is important
  to all companies
• Need to have resources available to implement
  this approach
• organizational support
• customer information
• Packaged or soft goods may be difficult

12
Would All Companies Benefit?

• Need to have direct channels of communication
• direct mail
• Internet
• Teleservices
• Bronner needs international capabilities
• Conclusion Not all companies would benefit

13
Wal-Mart Would Not Benefit

• Bargain
• Efficient Retail Link, no excess, no shortages
• Economies of Scale
• Speed
• 70 of its merchandise is rung up at the register
  before the company has paid for it
• Point Suppliers are doing the behavior gap
  analysis

14
Wal-Mart Would Not Benefit

• Mass Appeal
• 60 of ad budgets go to retailers for in-store
  promotions
• One-Stop Shop
• Economies of Scope
• Rotating Seasonal Items
• Most Product Categories
• Point Market segmentation not crucial

15
Wal-Mart Would Not Benefit
16
Bronners Contribution to Coca-Cola - Background

• 1984 Coca-Cola was losing market share
• Pepsi Challenge
• Studies on possible launch of
• New Coke

17
New Coke Findings

• Behavior Gap Coca-Cola had a place in the heart,
  not refrigerator
• Consumers dont mind line extensions
• Consumers were never told about New Coke

18
New Coke Blunder

• Coca-Cola executives wanted to make Coca-Cola 1
• Even at the cost of Coke loyalists (11)
• Lesson
• Coca-Cola is more than a soft-drink icon
• Coca-Cola stood for traditional values

19
Bronners Contribution to Coca-Cola

• Can Bronner come up with this conclusion using
  their methods?
• Customer Database
• Questionaires and Interviews
• Metaphors

20
Next Step

• Segment the market
• Coke loyalists
• Dual drinkers
• Non-drinkers
• Target the market segments
• Trigger the love for the brand
• Line extensions
• Brand extensions

21
Questions?