Market Differentiation regarding Spooz and Kaitrade:
It has been over 15 years since my last marketing class while obtaining my B.S.B.A. After all these years, I only remember only two things:
First, the incredibly hot girl I met in my marketing class who was sadly obsessed with her body being disproportioned at 38,22,34. She talked about wanting cosmetic surgery all the time to correct her freak of nature hot body. I tried really hard, day and night to make her feel better. Had I not been so distracted, and perpetually wore out, I would have probably received a higher grade in that marketing class.
The second thing I remember was my marketing professor, who would teeter at the edge of the stage wearing thick gold chains and sunglasses, while screaming at the top of his lungs about market differentiation, and market segmentation, while defending his actions he took while at Coca Cola. He was the genius that convinced the CEO of Coke to introduce, “New Coke” and then “Classic Coke” when “New Coke” turned into a marketing failure. My class always secretly surmised that he couldn’t find another real job in the private sector after this colossal marketing blunder. The reality of course, is that the present Coca-Cola formula has changed over time from the original, but the label remains relatively the same in the US.
The two lessons learned in this marketing failure: 1. If you are intending on changing your product, do so subtly in such a way as to prevent consumer backlash. As a result of the Coca-Cola failure, the food industry will very quietly and very subtly change the secret ingredient mix, slowly over time to meet ever changing consumer preferences. 2. Market segmentation is extremely important, as with the example with Coca-Cola, as the brand and product are marketed differently in each geographical region around the world and the secret ingredient mix is altered to each region to meet cultural demands.
Example: Car manufacturer selling vehicle “X.”
Vehicle X is available in three styles:
1. Stripped down version. No power windows, locks etc.
2. Some upgrades, Power windows, locks, upgraded stereo etc.
3. Luxury version, which includes all of the #2 product version, plus leather, more horsepower, satellite, gps, dvd, etc.
The reality is that creating more versions of the same product cost money from the standpoint of R&D, and associated production and marketing costs. If a business plan incorrectly misses a perceived marketing and/or economic trend, the consequences can be disastrous, as seen with present fiasco in Detroit. However, back when the economy was performing well, no shareholders were complaining about Foose customizing vehicles after market and losing out on these revenues. The reason is that the more a product is customized, the more expense and risk is incurred.
At this point Spooz has one product with no other versions available. One size does not fit all. Due to limited revenues, low cash, and a lock up in the short term lending market (remember the credit crunch?) Spooz found itself in a difficult position trying to meet the customer’s demand of a customized product for a very important order.
You can either view this development as the glass being half empty or half full. My viewpoint is that the glass is more than half full. This shows an early maturity in the product life cycle. The benefits of a Spooz/Kaitrade relationship are mutually exclusive, just as the Ford Mustang and Foose are mutually exclusive. Each benefit the other through their independent and cohesive business objectives. THE most important aspect for shareholders of Spooz with respect to the Spooz/Kaitrade and Spooz/Bloomberg relationships is the branding issue. While revenues are extremely important in meeting the break event point, plus profit, THE most important issue may actually be a matter of the “Z” TM, and the Spooz name being prominently displayed in conjunction with the various business partner relationships media, which establishes the Spooz brand and product, which will then enable Spooz to do what we longs always anticipated it would do, which is increased market share and increased revenues, through market differentiation and segmentation. Go Spooz!
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AI
