customer-Product Profitability Analysis

Introduction

The
following table, based on Figure 4.2 Customer-Product Profitability
Analysis in your textbook, shows an example of a Customer-Product
Profitability Analysis filled in for a small sewing alterations company
that specializes in formal wear.

There are six different types of
customers for this company. This small business should focus on the
“high profit” customers, but sometimes may want to keep in touch with
the “mixed-bag” customers since word-of-mouth is the best advertisement
for this small company with little repeat business. Within a few years,
teens can become brides who are looking for wedding gown fittings.

Customer

SERVICE	C1 High-Profit	C2 Mixed-Bag	C3 Losing Customer
S1 Wedding gown design	Big Spenders (designer gown)	Heirlooms	Bargain Basement Buyers	Highly Profitable Product
S2 High school formal wear		Potentials		Profitable Product
S3 Clothing Repairs		Fashion Plates		Losing Product
S4 Women’s suit design	Executives			Mixed Bag Product

Alternate Version

Instructions

• Re-create the table above and use it to segment the customer base at your company.
• Make any assumptions or simplifications you need to create the table.
• You should make up a name for each segment.
• After you have segmented the customers in your company, put together a value proposition for each of these customers.
• Then explain what can be done to change each value proposition in order to build customer loyalty.
• Due by the end of Day 7.

Remember

There are two components to this assignment:

• A table showing customer segments at your company.
• A
  written explanation of the value proposition for each segment and then
  what can be done to change the value proposition in order to build
  customer loyalty.
• Your written explanation should not be more than two pages single spaced (four pages double-spaced).