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Chapter 5 Reach Beyond Existing Demand Blue Ocean Strategy

Chapter 5 Reach Beyond Existing Demand Blue Ocean Strategy. John Beddington Scott Bearden Patrick Lewis Lauren Frick Trevor McDonald. Maximizing the Size of the B lue O cean. Look to non-customers; build on commonalities and what buyers value

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Chapter 5 Reach Beyond Existing Demand Blue Ocean Strategy

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  1. Chapter 5 Reach Beyond Existing DemandBlue Ocean Strategy John Beddington Scott Bearden Patrick Lewis Lauren Frick Trevor McDonald

  2. Maximizing the Size of the Blue Ocean • Look to non-customers; build on commonalities and what buyers value • To reach beyond existing demand, think non-customers before customers; commonalities before difference; and de-segmentation before pursuing finer segmentation

  3. The Three Tiers of non-customers • Tier one: “soon-to-be” non-customers who are on the edge of your market, waiting to jump ship • Tier two: “refusing” non-customers who consciously choose against your market • Tier three: “unexplored” non-customers who are in markets distant from yours

  4. Tier one: “soon-to-be” non-customers • Pret: British fast food chain • The lesson: non-customers tend to offer far more insight into how to unlock and grow a blue ocean than do relatively content existing customers • Look for the commonalities across their responses. Focus on these, and not on the differences between them. You will glean insight into how to de-segment buyers and unleash an ocean of laten untapped demand

  5. Tier two: “refusing” non-customers • JCDecaux • Solution: provide street furniture for everyone that firms could use to advertise on at a low cost • Look for commonalities across their responses. Focus on these, and not on their differences. You will glean insight into how to unleash an ocean of latent untapped demand

  6. Tier three: “unexplored” non-customers • U.S. Defense Aerospace industry: JSF • Solution: build one aircraft to accommodate the needs of multiple branches of the military • Tier three customers are not targeted by firms in the industry because they believe the customers belong to other markets

  7. Three tiers and Amazon • Tier one: people looking to buy books and electronics on-line now offered one website for all their needs • Tier two: Amazon offers value-added services to encourage “refusing” non-customers to buy from them • Tier three: Amazon offers such a wide array of products that it appeals to people not looking to buys books (unlike Barnes & Noble website)

  8. Takeaways • Understand the three tiers of non-customers • Tier one: “soon-to-be” • Tier two: “refusing” • Tier three: “unexplored” • “The Biggest Catchment”: don’t focus on a single tier, explore whether there are overlapping commonalities across all three tiers of non-customers

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