Customer Service and Marketing at MM Essay Example

needs and only 10% to small customers to allow space for distributors to implement their own marketing and sales efforts. As a result, the volume from small customers decreased while that from large customers increased, aligning with MM's marketing positioning. Consequently, MM further increased the proportion of sales resources for large customers to 98% and invested more in sales support for them. The largest proportion of sales support hours, 41%, was allocated to Segment A, MM's primary target segment. Segment D, the secondary target segment, received 40% of sales support hours. Additionally, 10% of sales support hours were dedicated to Segment B to improve their satisfaction level and prevent negative word of mouth in the market.

Segment C received the least attention, with only 10% focus, as they were more price-sensitive than responsive to sales support. The quality of sales representative interaction with Segment A was exceptionally high due to the significant amount of time dedicated to them. The interaction with Segments B and C was good, and the interaction with Segment D was fair. By the end of the simulation, we were able to achieve a "very satisfied" rating for Segments A and C, while Segment D was deemed "satisfied." Segment D's satisfaction level was not higher due to the higher price compared to their expectations.

Segment B remained "dissatisfied" because our product offered a lower thermal resistance. Given M's market share and revenue challenges, our team established short- and long-term business goals for MM. The short-term goal is to acquire a high market share in primary market segments, while the long-term goals are to consistently maintain high profit margins and market share. To

achieve these objectives within a limited budget, M's marketing strategy must focus on providing value. Leveraging M's existing strengths, we recognized an opportunity to delight customers with a superior power-to-size ratio.

We identified Segments A and C as our primary and secondary target segments because their needs aligned with our product positioning and could make a significant difference.

Aggressive investment in M's R&D was necessary to reverse declining market share and boost customer satisfaction, in order to build a strong and positive brand name for our power-efficient motors and manage internal costs. This allowed us to price our motors to create value for customers while extracting value for our business. Enhanced investment in our sales representatives and marketing communications was identified as critical in communicating MM motors' value to customers, and formed the key differentiators in managing M's dual sales force and distributor channels. The relationship between MM and its customers was close, involving a constant dialogue between many participants. The quality of these relationships and the benefits gained by both sides were critically important to MM. However, customer interviews suggested that large customers were becoming dissatisfied with the quality of M's sales team. For the split between customer retention and acquisition, it was learned that putting a higher focus on customer retention resulted in much higher overall sales. Experience from earlier runs showed that a high investment in new customer acquisition did not lead to a proportionate increase in new customer sales.There may be channel conflict with distributors aiming to attract new customers. As a result, our strategy focused on retaining customers to protect our market share and generate new sales through referrals. Our well-trained

sales force successfully acquired new customers despite limited time dedicated to acquisition. Thanks to our high retention rate, we were able to rapidly expand our market share in Segment A. Market research played a crucial role in determining pricing. Initially, we believed that maintaining constant prices would help us gain market share, but we learned that adjusting prices based on customer price expectations for Segments A, B, and C was more effective in maximizing revenue. Exhibit F demonstrates that willingness to pay generally increased over time in these segments, so we gradually raised prices to extract value for MM and aggressively increased power-to-size ratios to create value for our target segments. This approach enabled us to increase our market share. To target the price-sensitive Segment Ad, we offered them the maximum allowable discount as part of our sales strategy to capture market share in this segment.We maintained a constant discount rate for our distributors, allowing them to better plan their distributor margin based on their business needs. Throughout the simulation, our pricing increased by a total of 2% across all segments. To prevent price shocks and promote market stability, we intentionally increased prices gradually. While setting flexible prices may provide a short-term solution for achieving management targets, it can send mixed signals to the market and should be avoided whenever possible. We noticed that our competitors responded to our price increases in a similar manner and consistently kept their rates lower than ours. This made us realize that competing on prices would have a negative impact on our profits. How can we effectively balance short-term and long-term investments?

To establish a strong brand name and gain

a competitive advantage over our rivals, we heavily invested in improving our product's power-to-size ratio. Market research played a crucial role in monitoring the performance of our product compared to competitors and customer expectations. This enabled us to adjust our research investment accordingly.Our success in the market research showed that our strategic positioning on power-to-size ratio has paid off. After 4 quarters of simulation, our competitors shifted their focus to producing high thermal resistance products while decreasing their emphasis on power-to-size ratio. Despite limiting investments in thermal resistance to improve company finances, we were able to effectively manage the thermal resistance performance to meet customer expectations. This ensured that sales and customer satisfaction of our product remained unaffected. Additionally, we gradually increased investment in manufacturing efficiency to control the cost of goods sold in the long run. Our pricing decisions take channel conflict into consideration. To minimize this conflict, we aim to avoid channel conflict by offering competitive margins and acquiring new customers. However, we acknowledge that distributors may sell motors at a lower price than ours for large customers. To resolve this conflict, we differentiate our M's sales channel through quality sales support and customized assistance. This makes it less likely for large customers to buy from distributors simply because of a cheaper price.