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Reach Beyond Existing Demand. Bryson Bell Ian Walraven Jordan Jones Philip Winfield Stephanie Light Tyler Buschman Dana Cook Austin Bastian. Reaching Beyond Existing Demand. Three tiers of noncustomers Focusing on the biggest catchment Maximizing Blue Oceans

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Reach Beyond Existing Demand

Bryson Bell

Ian Walraven

Jordan Jones

Philip Winfield

Stephanie Light

Tyler Buschman

Dana Cook

Austin Bastian

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Reaching Beyond Existing Demand

  • Three tiers of noncustomers

    • Focusing on the biggest catchment

  • Maximizing Blue Oceans

    • How to successfully reach beyond existing demand

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Three Tiers of Non-customers

  • First Tier

    • Closest to your company’s market

    • Customers that sit on the edge of you market and basically dip their toe in the water

    • Buyers that minimally purchase in your market, but are mentally not customers of your industry’s offerings

    • If offered an increase in value, these non- customers will stay around and more frequently purchase in your industry’s offerings

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Three Tiers of Non-customers

  • Second Tier

    • In between the first and third tier

    • Non-customers that know what your industry’s offering is and actively choose to not to make a purchase

    • Example: people that are members of a country club that actively choose to play tennis exclusively rather than golf. They are aware that they could easily play golf, but choose not to

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Three Tiers of Non-customers

  • Third Tier

    • Furthest away from your market

    • These non-customers have never thought of your industry’s offerings as an option

    • By better understanding the commonalities that non-customers share with existing customers, we can better understand how to pull these non-customers into the market

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First-Tier Noncustomers

  • “Soon-to-be” noncustomers, who minimally use the current market offerings to get by as they search for something better.

  • Sit on the edge of the market

  • Eager to jump ship

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First-Tier Noncustomers

  • Case Study: Pret A Manger

  • Look for the commonalities across their responses

  • The lesson: Noncustomers tend to offer far more insight into how to unlock and grow a blue ocean than do relatively content existing customers

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Second-Tier Noncustomers

  • Refusing noncustomers

  • People who either do not use or cannot afford to use the current market offerings

  • Refusing noncustomers have an ocean of untapped demand waiting to be released

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  • French outdoor advertising vendor

  • Pulled a mass second-tier non customers by creating the concept of “street furniture”

  • Increased exposure time to advertisements with stationary downtown locations

  • Signed contracts with municipalities to gain exclusive long-term rights for displaying ads

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  • Number one street furniture ad space provider world wide

  • Created a steady source of long-term revenue and profits with exclusive contracts and high operating margins

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Third-Tier Noncustomers

  • Farthest away from an industry’s existing customers

  • Their needs and the business opportunities associated with them have been assumed to belong to other markets

  • Example: tooth whitening

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Example: The U.S. Defense Aerospace Industry

  • Hard to replace the aging fleet of fighter aircraft because of high costs and a limited budget

  • The Navy, Marines, and Air Force had different qualifications they wanted for their ideal fighter planes

  • The Joint Strike Fighter (JSF) program looked at these differences and then searched for commonalities across the three branches

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Example: The U.S. Defense Aerospace Industry (cont’d)

  • They found the two highest costs to be avionics (software) and engines

  • Then, the JSF looked at the customized features that influenced the branches’ purchase decision

  • They combined the key factors and reduced or eliminated everything else to make one aircraft for all branches

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Example: The U.S. Defense Aerospace Industry (cont’d)

  • Results: A dramatic drop in costs and an increase in performance of all three branches

  • Achieved this by reaching beyond existing customers of the three branches and then aggregating demand previously divided among them

  • The first JSF-35 is set to be delivered in 2010

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Go for the Biggest Catchment

  • Focus on the tier that represents the biggest catchment at that time

    • Explore overlapping commonalities across all three tiers of noncustomers

    • Expand the range of hidden demand

  • Reach beyond existing demand to noncustomers while formulating future strategies

  • If no opportunities are found, then you can further develop strategies to existing customers. But beware!

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Under Armour

  • Looking at their noncustomers

    • Women’s apparel is less successful than men’s line

      • First tier- athletic women who have need for UA’s offerings

        • Only purchase out of necessity

      • Third tier- women weren't initially targeted in advertising, unexplored market.

      • Second tier- are still women who think UA is too pricey

        • This market is still untapped because UA has not changed their pricing strategy

    • All tiers of customers have commonalities in needing comfortable, beneficial athletic wear

    • UA commercial