I think it's the common mistake or misunderstanding for companies towards their customers' value when making marketing strategies or providing services, which in turn become the point of contention for the customers' value proposition.
There is a low end clothing chain store in HK, whose objective is to provide "the best service" to customers. When I was working as part-time staff there, the shop manager always ask us (salesperson) to follow the customers one by one from the time the customers stepped in the shop, but most of time, customers bought nothing and left. From the company's point of view, "personal service" to each customer to be served by specific salesperson is a very good value proposition and could be the point of difference to customers. However, from the customers' point of view, I think many of them would like to shop around by themselves and ask for help if they need. One successful example I think is Uniqlo in Japan, which is also a low end clothing chain store with almost self-help service, but still, it attracts a lot of customers, including tourists, in different regions.
I think this is an example of point of contention, which is one of the main ideas of value proposition.
1 comment:
Hi Alison,
In my opinion, the business model and sale model of this fashion company does not match each other. This company aims to serve low end customers with the purpose to reduce cost, using cost as the driving factor for competitive advantage. However, their sales model is supposed to serve high-end customer by using one by one sales person for each customer. This sales approach incurs significant personel cost instead of reducing it.
In banking industry, banks often segment customers in different categories, from low end (walk in), medium and premier segments. Banks serve each segment differently. Walk-in or mass-customers have to queue in line and wait for service while midium customer can just do transaction in seperate booth. Premium customers can be serve at home or any place they desire. Sale person can serve hundreds of walk-in customers. But the same person can serve only around 20 medium customers. In premier segment, one sale person is assigned to serve one or two customers only.
What I want to say is the business model will decide how business is organized. Each model has its own competitive edge as long as it serve the target segment.
Just some thoughts.
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