Improving the Effectiveness of Product Managers through the Use of Competitive Intelligence TPMA January 27 th , 2009 David Gibson Senior Vice President Kaiser Associates, Inc. Toronto, Ontario
Evening Overview Introduce Several Aspects of CI Recommend Keys to Success Purpose Offer Suggestions on Maximizing CI’s Impact Agenda Introduction Exercise Examples What is CI? It’s Still Too Product Expensive Management Applications of CI Questions are welcome at any time 2
Introduction What is Competitive Intelligence? 3
Introduction Competitive Intelligence Timely and fact based data and analysis on Competitive Intelligence which management may rely in decision- making and strategy development Data and Analysis Decision Making 1 Timely Strategy Development 2 Fact Based 4
Competitive Analysis & Strategy Development are the Introduction same thing External Frame of Reference Internal Frame of Reference Competitive Analysis is the Process Strategy Development is the Process of Determining How Competitors of Figuring Out How to Beat the Will Try to Beat Us Competitors Two Different Ways of Saying the Same Thing 5
Introduction Types of External Analysis Market / Industry Customer Analysis Analysis 1 2 The process of determining the profit The process of analyzing customer needs potential of an industry / market A process for rigorously measuring The process of determining a competitor’s performance against “best -in- class” corporate and business unit strategies performance and using the analysis to meet and surpass the best-in-class 3 4 Competitive Competitive Analysis Benchmarking 6
Exercise Examples Conclusion Introduction What is CI? It’s Still Too Product Final Expensive Management Thoughts Applications of CI 7
Exercise “It’s still too Expensive”: Situation Situation Upscale appliance maker Miele Canada is …assuming more control of the sale of its products at retailers - and dropping the controversial practice of allowing customers to haggle on pricing. Starting today [Sept. 22, 2008], Miele is taking on the added cost of processing all of its customer purchases at retailers carrying its goods. It is storing inventory, rather than having retailers do it, delivering merchandise to customers, sending its own repair people to customers' homes and answering customers' questions from an in-house call centre. In return, Miele thinks it can keep closer tabs on its customers, respond more quickly to their needs - and get to pitch more stoves and refrigerators to them. The company's goal is to double its estimated $100-million of annual sales in Canada over the next five years. The move reflects a growing frustration among suppliers as retailers gain more clout in deciding which products to trumpet prominently in their stores. Robert Caplan, general manager of Caplan’s Appliances in Toronto, has been testing the new Miele system over the past couple of months. He said only one customer so far - out of "a couple of hundred" - walked out because he couldn't negotiate the price on a Miele appliance…His margins are only between 6 to 12 per cent, and he often has to keep inventory for up to a year before it is sold. Miele, on the other hand, is investing heavily in its new program. Competing producers hire outside contractors to do servicing. Germany-based Miele, which has operated in Canada for two decades, is best known for its quiet dishwashers and vacuum cleaners. But over the past five years, it has added a full line of appliances to its mix here, expanding its styles to larger models rather than just the smaller European ones. Miele has also developed lines of more affordable products so it carries both luxury and less-pricey models. 8 Source : “Miele takes new tack in sales, servicing” by Marina Strauss, Globe & Mail – September, 22 nd , 2008
Exercise “It’s still too Expensive”: Situation Situation Now, Miele is ready to put a bigger push on its sales. Miele's research found that its customers are surfing the Web for information and are often more knowledgeable than retailers' sales people. By the end of the year, Miele plans to start teaming up with existing retailers to open separate Miele stores. It is offering five- and 10-year warranties, while rivals often offer just one- or two-year warranties, Mr. Heck said. To spread the word, this week the appliance maker will launch a $2-million ad blitz - about five times larger than any single previous campaign - to signal the changes. It recently hired Lowe Roche, its first ad agency in nine years. It previously did its ads in-house. In this new model, retailers become authorized Miele Chartered Agents and leave the manufacturer to handle every aspect of the customer experience from the moment the appliance is purchased, all the way through the product’s long lifespan. “Being able to responsibly communicate and interact with customers directly is a brand’s greatest asset which we will now be able to do to solidify the Miele brand in Canada for both us and our Miele Chartered Agents,” explains Kelly Lam, Director of Marketing, Miele (Canada) Limited. To ensure a consistent brand experience, Miele-branded boutiques will be showcased across all retail agents in Canada. In addition to product education, retailers will now inform consumers of the new MCA model and process sales orders through the manufacturer’s Web -based system. From there, Miele will contact the customer within 24 hours to confirm the purchase, answer any questions, and arrange for delivery and installation. 9 Source : “Miele takes new tack in sales, servicing” by Marina Strauss, Globe & Mail – September, 22 nd , 2008
Exercise “It’s still too Expensive”: Situation Situation “We’re the only company in Canada with our own service department,” added Heck. Every appliance is delivered using Miele branded trucks and installed by a fully-Miele dedicated service team. In addition, the manufacturer has introduced a national Toronto-based contact centre equipped with bilingual agents who are available to answer and address any customer inquiries 7 days a week, from 9:00 a.m. to 12:00 a.m. Retail agents will also no longer burden the headaches associated with inventory and product supply since Miele has opened three new warehouses (Vancouver, Calgary and Montreal) and hired a team to support this new system. Long time Miele retail partner, Caplan’s Appliances is a great supporter of the new business model. As general manager Robert Caplan puts it: “This is an innovative program to match the innovation of Miele appliances.” For Caplan, the MCA system will allow his sales team to direct all their energy and resources on what they do best – educating customers on the benefits and features of Miele appliances. “The consumer will appreciate the consistency of their Miele purchase, as the manufacturer puts the same quality into their product as they do their delivery, installation and service.” “This provides the customer with consistency from store to store,” added Caplan. “In essence, this new system is truly going to continue to position Miele as an industry trailblazer and solidify its place in the market.” To promote the MCA launch in Canada, Miele is offering the biggest promotional campaign in the appliance industry, with the world’s first 10 year manufacturer’s warranty on Miele washing machines and 5 year manufacturer’s warranty on all Miele kitchen appliances including dish washers until December 31, 2008. 10 1 Source : “Miele Canada Sets New Course in Retail Appliance Industry” – company press release – www.miele.ca – September, 22 nd , 2008
Exercise “It’s still too Expensive”: Creating a Plan Activity Our assignment is to help Fred Mertz, President, Whirlpool Canada, develop a strategic plan for dealing with Miele Canada. Our plan should have the following elements: Development of Miele’s New Market Approach 1 Scope Miele’s Go -to-Market Activities 2 Miele’s Corporate Organization 3 Managing Miele’s Operations - Fulfillment 4 1 Primary Data Sources 2 Secondary Timetable Resources Required 11
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