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Bronner Slosberg Humphrey Case Analysis – Mkt 642

Bronner Slosberg Humphrey Case Analysis – Mkt 642. Presented by: Michael Miyagishima Peter Atmali. Bronner Slosberg Humphrey. Founded in 1980 as Eastern Exclusives Distributing coupon books Early customers: American Express and AT&T Provides relationship marketing services

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Bronner Slosberg Humphrey Case Analysis – Mkt 642

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  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 AT&T • 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 • AT&T & GE, American Air, JC Penney • Measurements based on response rates • Segmenting customers by value • Profitable customers

  5. Behavior Optimization • Behavior gap analysis • Customer’s 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. Bronner’s Contribution to FedEx • FedEx’s Problems • Weak market • Increased competition • Stagnant growth • Information overload • Little understanding of customers • FedEx’s Marketing Strategy • Mass marketing – list rate structure • Solution: Construct a more comprehensive database

  8. Bronner’s 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. Bronner’s 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 FedEx’s 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. Bronner’s 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 don’t 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. Bronner’s 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?

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