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Darrin Wolter M.A.Sc., P.Eng., MBA
© 2011 Cotton Creek
TASS Presentation
December 9, 2011
© 2011 Cotton Creek
Better features
Lower price
Latest promotion
Spur of the moment / Immediate need
Only available option
Trusted brand
…
2
Value Bang
for your Buck
© 2011 Cotton Creek
Best value is the most Fl. Oz. per Dollar
3
Value = Benefits / Dollar
Small Medium Large X-Large
Volume (oz) 8 10 14 20
Price ($) $1.24 $1.33 $1.52 $1.71
oz/$ 6.45 7.52 9.21 11.70
© 2011 Cotton Creek
Tangible Internet speed (MB/s)
Computer RAM (GB)
Bottle size (ml)
Distance to branch (m)
Major obstacles en route (highways)
…
4
Customers can be clustered by the benefits they value most
Intangible Brand
Feeling
Taste
Support
Friendliness – on the phone, in person
…
© 2011 Cotton Creek 5
Premium High Value
Price Leader
Rip-Off
PROCs GPLOT SGPLOT
© 2011 Cotton Creek 6
High Value
Rip-Off
Bigger sizes deliver more value
X-Large (20oz)
Large (14oz)
Med (10oz)
Small (8oz)
© 2011 Cotton Creek 7
Tim’s Delivers More Volume per Dollar Starbucks the least
Tim’s X-Large
Starbucks Venti
McDonalds Large
© 2011 Cotton Creek 8
Benefits Segment
Importance
Brand 4.0
Volume (fl.oz) 7.0
Cleanliness 4.0
Taste 7.0
Open late 1.0
Ambiance 5.0
…
Product Scores
9
14
6
5
8
4
…
x = Overall Product Score
© 2011 Cotton Creek 9
Benefits Segment
Importance
Product Scores 1
Tim’s Large
Starbucks Tall
McDonalds Large
Brand 4.0 9 8 6
Volume (fl.oz) 7.0 14 12 16
Cleanliness 4.0 6 10 8
Taste 7.0 5 10 9
Open late 1.0 8 7 10
Ambiance 5.0 4 9 3
…
Product Score 7.4 9.3 8.5
Notes: 1) Example numbers obtained through very small survey
Importance Values Drive decisions
Maintain those SAS Data Sets carefully
© 2011 Cotton Creek 10
Premium
Price Leader
Benefit Importance drives value
Starbucks delivers more value
McDonalds taste improves its value
Tim’s is the price leader
Notes: 1) Example numbers obtained through very small survey
© 2011 Cotton Creek 11
Benefits Segment Importance
Product Scores
Brand 4.0 9
Volume 7.0 14
Cleanliness 3.0 6
Taste 6.0 7
Hours 1.0 8
…
PROC MEANS, stats … Features purchased Features used Purchase decisions
GeoCoding – SAS/GRAPH Store location relative to typical routes Promotions
Demographics Seasonality Other Data Sets
Market research On-line surveys
One set of values per segment
© 2011 Cotton Creek 12
Benefit Importance drives value
Notes: 1) Example numbers obtained through very small survey
© 2011 Cotton Creek 13
Premium
Price Leader
Notes: 1) Example numbers obtained through very small survey
Coffee is best value for Starbucks Experience
Latte’s are premium experience
What would you have advised the product team? Will Tim’s Lattes will catch on?
© 2011 Cotton Creek 14
Premium High Value
Price Leader
Rip-Off
Benefits Segment Importance
Product Scores
Brand 4.0 9
Volume 7.0 14
Cleanliness 3.0 6
Taste 6.0 7
Hours 1.0 8
…
Priority segments Prioritized calling Lists Client/segment focused
messaging Prioritized feature
development list …
Product Value
© 2011 Cotton Creek
Be the owner of the Segment Data Sets And be vigilant
All values have a confidence interval – spread the word
Partner with sales and Marketing to understand the benefits that matter most Make it a joint discovery instead of showing up
with results
Scores are relative and have meaning only when together Consider them as likelihoods more than absolutes
15
© 2011 Cotton Creek
By focusing on differences that matter to customers, we increase the likelihood of sales and profits …
… sometimes substantially
Industry
Many
Clients
One
Client
New Venture
Marketing
Sales
16
© 2011 Cotton Creek 17
