Customer Segments Flashcards
What forms the core of the business model?
Relationship between VP and CS forms core of business model
What are customer segments?
Defines the different groups of people or organisations an enterprise aims to reach and serve
What represents seperate CS’s and what is the implication?
- Have distinct needs
- Are reached through different channels
- Require different kinds of relationship
- Provide different level/types of profit
- Value different aspects of the offer
- Implication is that from a Business Model perspective, it is clearer to segment on the basis of VPs
What types of customer jobs are there in the VP canvas?
- Functional Jobs
- Specific tasks, such as mowing the lawn, writing a report or helping a client
- Social Jobs
- Describe how a customer wants to be perceived by others, and involve improving status or gaining power
- Personal/Emotional Jobs
- Include when a customer wants to achieve a particular emotional state, such as safety or fun
- Supporting Jobs
- Thos that occur during purchase or consumption of value, such as buying, co-creating or transferring that value
What is a pain in the VP canvas?
Things that annoy your customers before, during or after they are trying to complete a job, or something that prevents them from getting the job done altogether
What is a customer job in the VP canvas?
The tasks your customers are trying to get done in their work or in their life. They can represent problems they are trying to solve or needs they are trying to satisfy
What is a gain in the VP canvas?
- Describe the outcomes or benefits a customer wants.
- Includes functional utility, social gains, positive emotions and cost gains
What types of gains are there in the VP canvas?
- Required gains
- Those that a solution must provide in order to work e.g. phones must be able to make calls
- Expected gains
- Relatively basic gains that we expect from a solution, even if it could work without them
- Desired gains
- Those beyond what we expect from a solution but would love to have if given the option
- Unexpected gains
- Those that go beyond the customer’s desires, that they could not have told you about even if asked
- aka latent needs
What types of pains are there in the VP canvas?
- Undesired outcomes and problems
- Can be functional, social, emotional or ancillary
- May also include characteristics the customer does not like
- Obstacles
- Things that prevent customers form getting started or slow them down when completing a job
- Risks
- Things that could go wrong and have important negative consequences
What are the segmentation strategies?
- Mass Market
- Doesn’t distinguish between segments and focuses on one large group with similar needs
- Niche market
- Tailored to a specific specialised segment
- Segmented
- Distinguish between segments based on their slightly different needs and problems
- Diversified
- Distinguish between segments based on their very different needs and problems
- Multi-Sided Platform
- Delivering multiple asymmetric sets of value
- Or what one customer does with your value proposition then provides value to a seperate customer
Where is value created?
- Trend away from value-in-exchange view towards notion of value being produced not by the supplier, but by the customer when using offerings and interacting with the suppliers
- i.e. Value is not what goes into the offering, it is what the customer gets out of them
What is true of the traditional view of market?
- The market is seperate from the value creation process
- In the traditional conception, ‘market’ refers to either aggregations of consumers or the locus for exchange, and its function is the exchange and extraction of said value
- This concept of value chain epitomises a unilateral role of firms as the creators of value
- Consumers exist outside of organisations, who must be able to target and manage them
What is the evolving view of market?
- The increasing availability of information networks has led consumers becoming more informed and understanding of their ability to extract value at the locus of exchange
- Co-creation
What is (vs isn’t) co-creation?
- Joint creation of value (not products)
- Allowing the consumer to co-construct a solution based on their context
- Joint problem definition and solving
- Creating an environment where there is active dialogue
- Experiencing the business as consumers do in real time
- Understanding that different users can experience offerings in different ways
What isn’t co-creation?
- ‘Consumer focus’
- Delviering good consumer service
- Mass customisation or variety of offerings
- Transfer of activities from the firm to the consumer
- Customer as co-designer or product manager
- Meticulous market research
- Demand-side innovation
