My Photo

Subscribe to Blog

Enter your Email


Preview | Powered by FeedBlitz

Add to My Yahoo!

Add to Google

Subscribe with Bloglines

Subscribe to my feed

Twitter Updates

    « Shift Happens - 2009 | Main | Napster is to iTunes as FTP Sites are to Digital Services »

    September 28, 2009

    What Does Starbucks and AEC Reprographics Markets Have in Common?

    When I first entered this industry I was curious when I would hear two companies in the same market claim that they didn't see the other as true competition and rarely ran into each other.  They would claim that the reason the other company wasn't competition was because of their superior service.  What I came to realize is that these companies didn't run into each other because they were servicing different market segments.  They often didn't realize they were servicing different segments because over time Mr. Market did the segmenting.  The segmentation was mostly down the lines of design market versus construction market.

    The economic downturn has caused business owners to look much more closely at their business and the market in general.  They are understanding what markets they are currently servicing and looking to expand into the other segments.  What is important to understand is that these different segments have very different requirements especially price requirements.  If your pricing and service differentiation are not carefully thought through it will erode your margins instead of growing your business.  In this environment nobody needs more margin erosion.  An article in CNN Money talks about Starbucks struggle between the competing value propositions of fidelity and convenience.  This is very similar to differences in the AEC community.  Design professionals want fidelity and construction professionals want convenience.  Your pricing and service differentiation should match these market requirements otherwise you will loose business by charging too much, or erode margins by charging too little and having to provide more services.

    TrackBack

    TrackBack URL for this entry:
    http://www.typepad.com/services/trackback/6a00d8341da8d153ef0120a5fcb52a970c

    Listed below are links to weblogs that reference What Does Starbucks and AEC Reprographics Markets Have in Common? :

    Comments

    The comments to this entry are closed.