MKT 100 Chapter Notes -Quality Function Deployment

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24 Apr 2012
Module 5 -1
Customer Focus and Positioning
Customer focus is about how you focus your efforts to attract, serve and retain
customers, and which customers you focus on with such efforts.
Focusing on profitable customers, superior analysis of their needs and
fitting your offering to their needs and benefits sought are key
elements of competitive thinking and positioning
Market segmentation is dividing the market into groups of customers by their profitability
and preferences, then determining what drives each groups profitability and
preferences. Positioning is designing the features/ functions of your offering to satisfy a
customer segment that you have selected to target. In practice, such positioning is
called quality function deployment (QFD). You are deploying your quality to improve the
functions that are most useful to your target segment, for a product or service.
Customer profitability drivers First Step
1. customer purchases of high margin products and services
2. the sheer quantity of purchases made per year (size of the customer)
3. low selling costs to the customer, low delivery costs and low after-sales service costs
4. # very satisfied customer brings to the company through referrals, recommendations
and casual and explicit endorsements of your products and services.
2nd Step- Positioning
The firm deploys or invests its resources in what it believes to be the key drivers of
customer profitability so as to develop profitable competences and competitive
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Benefit Feature Segmentation
Consumers use product benefits and features as instruments or tools to achieve a new
desired state, be it physical, emotional, intellectual or spiritual. -Our behaviour is
motivated by a desire (sometimes called a need or a want) to move from our current
perceived situation to a new physical/intellectual/emotional/spiritual state.
The utility or quality of a product or service is the sum of all the benefits it
delivers in moving us along the paths to our physical, emotional, intellectual and
spiritual goals.
Market segments are based on the structure of such variance and as
the structure of this variance changes, so market segments change, morphing around
new product features, services and channels of distribution
Sec 3 Positioning
In terms of marketing decision-making, quality is in the eye of the target benefit
segment. Buyers will choose a product based on quality when they perceive a products
quality to be higher than a competitors quality in product benefits provided and on
quality dimensions important to them
a customer focus means a product positioning and design focus on product
quality/benefits desired by the target segment.
. QFD is the deployment of quality, technology and the resources of the firm to ensure a
product or service is competitively positioned to target and deliver the desired customer
function, benefits and satisfaction
If the connections/correlations between a segments most important benefits and the
products features are not there, then the product is poorly positioned to serve the
needs of the customer segment.
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