Service Added Based Differentiation.

Essay by fheidariUniversity, Master'sA+, January 2004

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Service Added Based Differentiation

Simulation II

"In well-developed markets, there is a mature set of players with comparable levels of strengths in terms of product development--hence all product offerings tend towards parity. Consumer tastes are also well defined. Therefore, product offerings need to go beyond satisfying basic needs.

In order to appeal to the higher order needs of the consumer, marketers may consider bundling service offerings with their products."

In mature markets, there is an established set of companies; there are very few differences among them. When the market growth rate is slow moving, the marketing gets tough. Also, as an industry reaches maturity, the core product inevitably becomes a commodity, offering few opportunities for differentiation.

This case study is about Camyo 3.5 TL a luxury roadster, a segment that has a host of players. The target is to reach annual sales of 150000 units at the end of three years with maintaining profitability between 5% and 8%.

Scenario I

We defiantly have an aggressive target. The strategy chose was two service products, carwash and collision insurance. Customers have seen free weekly car wash and free collision insurance as a very good pair of differentiators. Since both these initiatives were service oriented, their perceived value was very high with customers.

Selling Price Sales Units Profitability Market Share $56995.00 100800 units 5.36% 6.9%

Scenario II

We are still facing an aggressive target but navigating become affordable due to prompting price reduction by almost 50% in last six months. The chose strategy was Detailing and Collision Insurance. Customers have seen free detailing and free collision insurance as a very good pair of differentiators.

Selling Price Sales Units Profitability Market Share $57995.00 125627 units 6.91% 7.97%

Scenario III

The market continues its slow growth. The customer service seems to be all about...