This reading discusses the concept of a ‘‘zone of possible agreement (ZOPA)”, which is a useful framework for organizing the discussion of the University Tees case. The ceiling of the ZOPA is established by the customer’s willingness to pay. The floor of the ZOPA is the seller’s cost. The ZOPA is the range of prices between the ceiling and the floor. The ZOPA can also be used to frame broader discussions of various pricing strategies. For example, penetration pricing may involve purposely setting a price below the price floor to establish brand recognition.
Shapiro, Kasturi-Rangan, Moriarty, and Ross (1987). Manage customers for profits (not just sales). Harvard Business Review (September–October), 101–108.
This article emphasizes that customer desirability is a function of profitability rather than sales volume. It introduces the concept of cost-to-serve and suggests that customers usually fall into one of four categories. For example, the carriage trade category refers to customers who cost a lot to serve, but who pay top dollar for products and services. The aggressive customer category refers to customers who demand high quality and the best service, while also insisting on low prices. Once customers have been properly categorized, managers can channel their attention to the most profitable segments of the market.
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8. notes
Questions:
1. How would you describe University Tees’ strategy? What risks does University Tees face that may threaten the attainment of its strategic objectives? 本文来自辣'文,论-文·网原文请找腾讯324,9114
University Tees relies on a combination of operational excellence (which is a function of speed, convenience, and cost) and customer intimacy to secure customer orders (Treacy & Wiersema, 1993). More specifically, University Tees has four sources of competitive advantage. First, the company’s average order turnaround time is 7–10 days versus 10–14 days for its competitors. Second, University Tees has an artist and sales representatives who meet with customers at convenient times and locations. Furthermore, the company relies on UPS to deliver orders directly to the customers’ doors. College Custom Apparel (CCA) requires customers to come to its store location during traditional business hours to place orders, complete custom artwork, and to pick up finished t-shirts. Third, University Tees believes that manufacturing quality is not a differentiator in the custom t-shirt business; therefore, the company lowers its overhead costs by outsourcing production. Finally, University Tees creates customer intimacy by having an artist meet personally with each customer to create customized designs tailored to each customer’s preferences. This approach differs from internet companies that rely on clip-art for creating customized t-shirts.
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