BUS4098 Week 3
Sandy4tx
Week3Notes5.pdf
Number of Models and Styling Budgets
Choosing the number of models you want to offer and making marketing decisions on aspects such as the �rm's styling budget are some of the
considerations involved in creating strategies. These choices are related to two basic questions:
What do you understand about the market?
How do you want to approach the market?
Before answering the questions, let's �rst understand why you need to ask these questions. To do that, look at the underlying logic of differentiation
strategies. Differentiation strategies assume that customers do not make choices based on one product trait but on a bundle of traits. They weigh
each trait in the bundle according to their preferences. Therefore, across the strategic space, customers have a range of combinations of trait
preferences.
Similar to strategic groups, which we saw on the supply side of the market, we also tend to see clusters of customers around popular demand trait
bundles. Not surprisingly, these demand-side clusters are at the same points along the strategic space as the supply-side strategic groups. As an industry, you tend to see clusters of �rms going after clusters of customers.As the number of traits or the range of preference weights that the
customers give to these traits increases, the number of different ways in which a �rm can create a product and satisfy a market also increases.
As a general rule, as customers become less price-sensitive, the number of traits that come into play increases. Therefore, at the low end of markets,
customers buy primarily on price, and there is little value of wide-ranging differentiation. But in the high end of the market, more differentiation is
needed to cater to the speci�c needs of particular customer groups.
Additional Materials
Number of Models and Styling Budgets
(media/week3/SUO_BUS4098%20Supplemental%20PDF%20for%20W3%20L3%20Number%20of%20Models%20and%20Styling%20Budgets.pdf?
_&d2lSessionVal=4ziczn9qEskPZ3ZWUncGyhO8u&ou=91506)
Delivery Options (media/week3/SUO_BUS4098%20Supplemental%20PDF%20for%20W3%20L3%20Delivery%20Options.pdf? _&d2lSessionVal=4ziczn9qEskPZ3ZWUncGyhO8u&ou=91506)
Three-Year Plan (media/week3/SUO_BUS4098%20Supplemental%20PDF%20for%20W3%20L3%20Three-Year%20Plan.pdf?
_&d2lSessionVal=4ziczn9qEskPZ3ZWUncGyhO8u&ou=91506)
