Core Competencies and Competitive Advantage

Our Core Competencies

            At R&R Sensors (this is the name I have given my Capsim Core company), the top three core competencies are: providing a high-end sensor that appeals directly to the high tech customers, exceptional teamwork, and outstanding ethical values. Our first competency is essentially product redesign as we are moving away from a sensor that appeals to both low tech and high tech customers and putting our focus into high tech customers. This will enable R&R Sensors to focus more on this one area, do thorough research on what makes a high tech customer happy and then deliver by giving them a product with the performance, size, and reliability they are after. By taking the time to understand our target market, we can deliver a product that will be stellar and unique, and one of the best ways to understand the core competencies we have is to know the value of uniqueness within our own products. By using the idea of core competencies to better understand the talents a company has, we can develop a unique approach to focusing on areas that matter the most to our customers, this is where the second and third competencies come in (Mind Tools, 2018). After making the tough decision to continue with the marketing campaign for creating a better production process that eliminates the use of wasteful materials, but in doing so changing the campaign so the public was aware the waste was not reduced as of yet, our team came together and worked hard to research this problem. R&R Sensors did not leave this solely up to Marketing, instead the company worked as one big team to start the process to make this change happen. When an organization comes together as a unified team, this becomes a core competency, not all businesses can pull this off, and when the team works well together, operations management, production, and the products have better results, which then are transferred to the customers in a positive way. Third, our company prides itself on our outstanding ethical values, our morals and values are the reason we chose to not cover up the lack of waste reduction, even if it led to slightly lower profits than we would have liked. Our customers, all of our stakeholders, deserve our very best and we believe in the day and age where ethics are so hard come by, we do this best! To determine whether or not the unique things a company thinks are core competencies truly are or not, three tests need to be passed with a “yes”:

1. Is our business giving the customers something they really want and going about it in a way that strongly influences them to purchase from us, something relevant?

2. Is the core competence hard to duplicate, hard for other companies to copy?

3. Does our product or service open up market opportunities or is it stuck with a very small market?

If the answer is yes to all the questions above, we can feel confident that we have developed true core competencies (Mind Tools, 2018). We are developing a redesigned sensor that the high tech customers want, teamwork that works in a way that benefits the customers, and ethics that attracts customers to us. We want our sensors to be made in such a way that, yes, they are hard to duplicate and we believe our teams and ethics are also the same way, we work together so well that it will be hard to find a team or company like the one we have created. Finally, our sensors are not limited to a few small market places, they are sensors that belong in many electronic devices from cell phones to cars to elevators and our high tech customers can come from any location. Our team members and ethical views will pave the way to get there.

Competitive Advantages

            Our core competencies give us part of our competitive advantage because they go hand-in-hand. In order for a strength to become an advantage, an opportunity has to be filled by the product or service Sometimes, advantages are more commanding than other ones (Page, 2014). Our first advantage comes from the sensors we are redesigning, these will be updated in a way to be more appealing to the performance, size, and reliability that the high tech customers are after and we want to do this better than the competition. Creating a sensor that stands out having better performance, smaller size, and is more reliable all within the price range will appeal to all our high tech customers and give us the advantage over competitors who are focusing more on low tech, both sets of customers, or are trying to focus on high tech, but fail to deliver at the right specifications.

Positioning Strategy

            A positioning strategy is developed as a way to put a company’s products or services ahead of the others in the industry, it’s the reason it is different, such as why the major fast food chains can all serve burgers, but those burgers are all different in their own way and marketed so. Once the strategy is created it needs to be tested, making sure it’s as good as the company thinks it is and the only ones who can accurately let us know are the targeted customers we are marketing the sensors to (Entrepreneur, 2018). As discussed previously, our goal is to create a sensor for the high tech market, in order to position ourselves in a way to be unique among our competitors, we will have to prove it is the best by showing the research our Research and Development Department has done and also include parts of the production process, not enough to give away our product secrets, but enough to show that this sensor really is the best in the industry. And because actions speak louder than words, also showing that we are a unified, ethical team here at R&R Sensors will be made part of the positioning strategy as well. It seems that many companies anymore “talk the talk”, but do not “walk the walk” when it comes to morals, values, and ethics in the workplace and so many have let their customers down by cutting corners or lying about the products they are selling (both Volkswagen and Blue Buffalo come to mind). We will be different, we will stand out from the crowd of competitors and be that ethical company that can be trusted and we will do this by being open, honest, and also owning up to our mistakes and finding ways to correct them. In our situation, a lot of what we are doing product-wise is coming from the Research and Development Department doing exactly what the name implies, researching the best ways to create and update the sensor we have by using the newest technology available; then, developing the sensor into the newly designed product we will sell. This is what the department is good at, these are the key qualities these employees have, which will contribute to R&R Sensor’s success, these qualities are that department’s core competencies. The teamwork attitude and promise to be ethical stems from the organization’s attitudes and behaviors that set us apart, but also position us in a way to be in an advantageous place among competitors. These competencies should always be built upon and revised when needed, they are not always going to be the same, as the business changes and grows, so will our core competencies (Krompf, 2007).

Creating Value

            When our positioning strategy is to create something better than what’s already on the market, this automatically creates value for all our stakeholders – which includes shareholders, communities, and society as stakeholders is described as those affected by the actions we do here as a company whether directly or indirectly (Huemann et all, 2016). The improved sensor will appeal to our customer, supplier, employee, and shareholder-based stakeholders. Our customers will be excited to try out the new high tech sensor with all the improvements that have been made, suppliers will benefit as we will have to order higher quality supplies for production, employees will have the opportunity to recreate something into a newer product and embrace their creativity, and shareholders will be excited that this improved sensor will deliver higher profits. Being an organizational team as well as ethical will benefit all those involved, especially the community surrounding the business. Having a trustworthy company means those purchasing from us will have a reliable product where their money will be well-spent instead of wasted and our internal stakeholders will know they can rely on those in charge to tell them the truth while allowing the freedom to work creatively as a team, their work will be valued and each worker respected. Starting with our employees and spreading to society as a whole means our core competencies, competitive advantage, and positioning strategy will all work together to come full circle to benefit everyone we possibly can.

References:

Entrepreneur. (2018). Positioning. Retrieved from: https://www.entrepreneur.com/encyclopedia/positioning

Heumann, Martina; Eskerod, Pernille; and Ringhofer, Claudia. (2016). Rethink! Project Stakeholder Management. 

Krompf, Warren M. (2007). Identify Core Competencies for Job Success: Organization Development, Vol. 24. 

Mind Tools. (2018). Core Competencies Analysis. Retrieved from:https://www.mindtools.com/pages/article/newTMC_94.htm

Page, Kogan. (2014). Uncommon Leadership: How to Build Competitive Advantage by Thinking Differently. 

Antecedents of Target Marketing

Antecedents of Target Marketing

1.  In the first part of the video, Jen Mullin, the vice president of Marketing for Numi Organic Tea, clearly describes their typical customer. Using the information on segmentation you learned from reading Chapter 8 in Lamb, et al. (2014), discuss who the customer is and how the Numi marketing team figured that out?

ANSWER:  Market segmentation is when a market gets divided up into segments that are meaningful, identifiable and similar.  (Lamb, Hair & McDaniel, 2014).  Market segmentation helps companies to be able to focus their resources better and make it easier to define marketing objectives (Lamb, Hair & McDaniel, 2014). 

The market segments have to meet four criteria to be successful:  substantiality, identifiability and measurability, accessibility and responsiveness (Lamb, Hair & McDaniel, 2014).  Substantiality means that the market segment created must be big enough for it to make sense to create a special marketing mix for that particular segment (Lamb, Hair & McDaniel, 2014).  Identifiability and measurability means that  it is easy to identify certain characteristics of the segment and easy to collect and use data describing the segment and different demographic aspects about it (Lamb, Hair & McDaniel, 2014).  Accessibility means that the segment that is created should be made up of people who are easy to make contact with (Lamb, Hair & McDaniel, 2014).  Lastly, responsiveness means that separate marketing mixes should not be created if each segment would respond to one marketing mix the same (Lamb, Hair & McDaniel, 2014). 

Mullin describes the target customer as college-aged females and young mothers who are interested in the organic aspect of the tea.  Numi figured out that their customer was college-aged females and young mothers by demonstrating sampling to survey their customer base in a way.  Once people tasted the tea they were more apt to give their true opinions and allowed Numi to get honest feedback and collect data on who their target customer is.  This allowed them to break down the market into segments where they could better focus their resources and gain clear objectives. 

ANSWER:  Numi’s principle marketing plan is to target the college-aged females and young mothers who value the organic aspect of the tea.  To target this segment, they involve themselves in a lot of community events that give back, like breast cancer fundraisers and things of that sort, that the young mothers and college-aged females are likely to attend.  Numi also incorporates taste testing into their market strategy to get their customers to truly try their product, having confidence that once they do, they will really like it. 

Numi likes to partner with restaurants as well that sell food that is along the lines of their organic tea.  They think that if someone asks for a cup of tea there and they have a large variety and really like it, they will inquire about the brand and also look into where they can buy more.

Numi is a very high quality tea so their prices are higher than the average tea.  They are an organic product which makes it more expensive to begin with and also have a variety of flavors that suit most people’s tastes.  They are becoming the world’s largest brand for organic tea, so they will not be reducing their prices. 

Numi was surprised by how many larger retailers wanted to partner with them and carry their product as well.  They thought because their product was more expensive than what people are used to paying for tea, that they would not be accepted at larger retailers like Costco and such, but they found that there is a huge demand for their product and people really like seeing it on the shelves. 

a.  Geographic segmentation

b.  Demographic segmentation

c.  Ethnic segmentation

d. Psychographic segmentation     

ANSWER:  Describing the typical customer as female, college-educated tea lover is using psychographic segmentation.  Psychographic segmentation is when the market is segmented by using the whole picture rather than just one aspect or characteristic.  Psychographic segmentation incorporates personality, motives, lifestyle and geodemographics into the segmentation (Lamb, Hair & McDaniel, 2014).  The personality is the “eco-mom” personality of a female who is concerned about the environment and like to use organic products.  The motive is also the fact that the female is motivated to do better for the economy as well as for herself and use eco-friendly products.  The lifestyle is a college-educated woman who is knowledgeable of the product as well as other aspects of the company such as charitable community involvement. 

a. Geographic segmentation

b. Demographic segmentation

c. Benefit segmentation

d. Usage-rate segmentation

ANSWER:  Benefit segmentation is segmenting the market using the benefit the consumer expects to get out of the product (Lamb, Hair & McDaniel, 2014).  Numi segmented their customer base into the group of people who are looking for the benefit of an organic product which is that the product is good for the environment and good for the consumer’s health.  Consumers of Numi also want tea that is of better quality than most teas out there so they are willing to pay a higher price for it.  Numi consumers also want the tea that they buy to be fair-trade meaning that it is reasonably priced and the benefits are of equal value to the consumer. 

a. Family life cycle

b. 80/20 principle

c. Undifferentiated targeting strategy

d. Concentrated targeting strategy

ANSWER:   Family life cycle segmentation is a series of family stages that incorporate a combination of age, the presence or absence of children and the marital status of individuals (Lamb, Hair & McDaniel, 2014).  It is really important or Numi to pay particular attention to the family life cycle segmentation because as things change in people’s lives, their tastes and outlook on products may change as well.  For instance, if someone was buying the tea as a college student from their college café and then they graduate, get married, and have children, they might not have money to buy premium quality tea anymore and may have to settle for regular commodity tea. 

a. Age

b. Income

c. Ethnicity

d. Gender

ANSWER:  The CEO of Numi was very shocked to find out that the customers Numi was targeting at the high-end spas and fine restaurants were also shopping at Costco.  They realized that the consumer who would be going to high-end spas and fine restaurants shopped at Costco to save on packaging costs to buy groceries in bulk rather than paying for packaging to buy less of the product.  There was no real income difference in the customer because they were the same customer, just visiting very different places.  This makes it easy for Numi to not have to create another plan for another segment of customers. 

a.  Perceptual mapping

b.  One-to-one marketing

c.  Product differentiation

d.  Market segmentation

ANSWER:  Product differentiation is what a company uses to differentiate their product from the product of their competitors (Lamb, Hair & McDaniel, 2014).  Product differentiation can either be a real difference in two products or a perceived difference in two products (Lamb, Hair & McDaniel, 2014).  Numi’s product differentiation is a real difference in their product when comparing it with other commodity teas.  Their tea is organic and of premium quality because they use whole leaves.  Their raw ingredients are really expensive so their price is higher than their competitors, but not when you compare it to the quality of tea the consumer gets. 

a. Undifferentiated targeting

b. Concentrated targeting

c. Multisegment targeting

d. Niche targeting

ANSWER:   Numi found out that they had more than one target market.  Numi’s target market are eco-moms, college students and family travelers.   They target consumers who are at high-end spas as well as fine dining restaurants.  Their customers who are all there are also shopping at places like Costco, which gives them the benefit of mass selling their product without much effort to.  Multisegment targeting is when a company develops different marketing mixes for different segments (Lamb, Hair & McDaniel, 2014).  I think it would be irrelevant for Numi to incorporate multisegment targeting because, although they have more than one segment, there would not be a different reaction to marketing to any of the segments because they overlap and all go to the same places. 

a. True

b. False

ANSWER:   Optimizers are companies who carefully choose products because they solicit bids and study all proposals and consider a large number of companies before making their decision (Lamb, Hair & McDaniel, 2014).  Mullin knows that companies who seek Numi tea to go into gift baskets are optimizers because most of the time the gift baskets are consistent of all high quality products that are also organic and have the same quality that Numi tea does.  The promotional giveaways help Numi to market their product while it is beside other high quality and well-respected brands and products.

a. True

b. False

ANSWER:   Perceptual mapping is a way to graph the location, brands or groups of products that customers are thinking about (Lamb, Hair & McDaniel, 2014).  The channel conflict that exists for Numi is that they are marketing their tea at high-end spas and fine dining restaurants.  They are also selling their product at places like Costco and Target.  When the spas and restaurants find out that Numi’s tea is at “lower-end” stores like Costco and Target, there can sometimes be a conflict because they want high-end products that make their customers feel special.  Creating a perceptual map can help Numi to visually see where their product is being sold and what other products may be at the same location or may be bought by the same consumers.

References

Lamb, C. W., Hair, J. F., & McDaniel, C. (2012). MKTG5. Mason, OH: South-Western, Cengage.

Numi Organic Tea Video

NUMI ORGANIC TEA VIDEO

1.  In the first part of the video, Jen Mullin, the Vice President of Marketing for Numi Organic Tea, clearly describes their typical customer. Using the information on segmentation you learned from reading Chapter 8 in Lamb, et al. (2014), discuss who the customer is and how the Numi marketing team figured that out?

ANSWER:

           

In the first part of the video on Numi Organic Tea, Jen Mullin, the Vice President of Marketing for Numi Organic Tea, described the typical consumer for their products as female, usually college educated.  They love tea and usually consume two to three boxes of tea a month.  They usually drink green tea and consume organic products.  Since they are targeting college to middle age women they are using age and gender segmentation to make up their target market.  They are also using income segmentation because there product is more expensive than others because of the resources they are using it affects who is willing to spend the extra money for the organic tea.  From the start they knew they wanted to target women so they started by donating samples to events and places where they knew women would be or frequently visit.  She stated that they would donate their products to events like breast cancer awareness events.  They were using a concentrated targeting market, which is described as a strategy to select one segment of a market for targeting marketing efforts. (Lamb. 2014).   Which is exactly what they were doing when they targeted events for females. 

2. What is Numi's principle marketing plan? In what way does Numi's marketing team use what they know about their target demographic to implement their marketing plan? 

ANSWER:

Numi’s principle marketing plan is to get their name and products out there to as many consumers as possible through donating and sending out samples to their targeted market areas.  They believe that by getting there product out there to as many people as possible and having people try their product, people will like their product and become returning customers. Target demographic is defined as segmenting markets by age, gender, income, ethnic background, and family life cycle. Through donating samples out to various events and retailers they have developed a demographic to target.  They figured out that there consumers are college to middle age, educated, middle class women.  Knowing that this is there customer base they continue to send samples and donate their products to places where they are.  For example they stated that they target events such as breast cancer awareness and colleges.  This allows them the best chance at growing their customer base and getting new customers.

Defend Your Answer Challenge: Highlight your multiple choice answer in yellow. Write a 100 (or more) word discussion in defense of your answer to the multiple choice and true/false questions using research from your textbook to help substantiate your understanding of segmentation, target marketing, and positioning. Apply APA style referencing in your writing.  

3) Jen Mullin, the vice president of Marketing for Numi Organic Tea, describes their typical customer as a female, college-educated tea lover, possibly an “eco-mom.” What type of market segmentation has she used to identify this customer group?

a. Geographic segmentation

b. Demographic segmentation

c. Ethnic segmentation

d. Psychographic segmentation     

ANSWER:

            The market segmentation that she uses to identify this customer group is Demographic segmentation.  Demographic segmentation is defined as segmenting markets by age, gender, income, ethnic background, and family life cycle. (Lamb, 2014)  All of the terms she uses to describe her typical customer would fall into one of the following categories, age, gender, income, ethnic background and family life cycle.

4) Another way Numi Organic Tea identifies potential customers is through what they want from the product; they are looking for organic, fair-trade, premium quality tea, according to the video. What type of market segmentation is used to identify customers in this way?

a. Geographic segmentation

b. Demographic segmentation

c. Benefit segmentation

d. Usage-rate segmentation

ANSWER:

            Numi Organic Tea also identifies there potential customer by what they want to get out of the tea.  Since these customers are looking for their potential benefits out of the tea the type of market segmentation they are using is Benefit segmentation.  Benefit segmentation is defined as the process of grouping customers into market segments according to the benefits they seek from the product. (Lamb, 2013)

5) Because Numi Organic Tea has identified more than one target market, for example, “eco-moms,” college students, and family travelers, they should be particularly aware of the ____________________, which helps explain how consumption patterns differ at different stages determined by a combination of age, marital status, and the presence or absence of children.

a. Family life cycle

b. 80/20 principle

c. Undifferentiated targeting strategy

d. Concentrated targeting strategy

ANSWER:

            Family life cycle segmentation is a series of stages determined by a combination of age, marital status, and the presence or absence of children. (Lamb, 2013)  This type of segmentation helps when your consumers range in type because not everybody is at the same place in there life’s at the same time.  For example some college age students are married and some are not. 

6) The demographic variable that Numi Tea marketers were examining when they recognized that people who had discovered their product at a high-end spa or fine restaurant often shopped for groceries at Costco was _________________________.

a. Age

b. Income

c. Ethnicity

d. Gender

ANSWER:

            When Numi Tea marketers were examining the people who discovered their products at various places like Costco and high-end spas, they were examining the income demographic variable.  Normally people who shop the sales at Costco are not in the same income class as those who are using high-end spas.  They were trying to figure out exactly what income class would be best to target.

      

7) Numi Tea uses premium ingredients to create a premium tea at an affordable price, according to Jen Mullin. This is a form of ______________________ that the company uses to distinguish their products from those of competitors.

a.  Perceptual mapping

b.  One-to-one marketing

c.  Product differentiation

d.  Market segmentation

ANSWER:

            Product differentiation is a positioning strategy that some firms use to distinguish their products from those of competitors. (Lamb, 2013)  By using premium ingredients and an affordable price they are distinguishing their product from other consumers who make similar products.  Whether by using better ingredients as those who sell tea at a certain price, or offering there product at a cheaper price than those who use the same ingredient’s.  Either way it has helped distinguish them from others.

      

8) Which of the following is the least likely targeting strategy that Numi Tea would select to market their products?

a. Undifferentiated targeting

b. Concentrated targeting

c. Multisegment targeting

d. Niche targeting

ANSWER:

            Undifferentiated targeting is a marketing approach that views the market a one big market with no individual segments and thus uses a single marketing mix. (Lamb, 2013)  This would be the least likely targeting strategy that they would use because they know exactly what group they are targeting.  If they were to use this strategy they would be wasting money and time on consumers who they have already decided that don’t use their product.

9) When Jen Mullin explains that her company seeks to include their product in gift bags and other promotional giveaways by companies and other organizations, she is recognizing the need to change customers’ perceptions through sampling.

a. True

b. False

ANSWER:

            By placing their products in gift bags and other promotional giveaways its helping get their name out there to new potential customers.  By allowing people to sample their products it will help people to change how they view organic foods and teas.  Most people don’t want to waste their money on new products in fear that they won’t like it.  People are usually willing to try stuff when it’s free and if they were to like it, it would intern change how they view the product.

10) To graphically map the “channel conflict” between marketing Numi Tea to premium spas, hotels, and restaurants and selling the same brand at mass market stores such as Target, the company could employ perceptual mapping.

a. True

b. False

ANSWER:

            Using perceptual mapping means displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customer’s minds. (Lamb, 2013)  This would allow them to figure out how different classes of people view their products and what they are willing to spend on their products.

References

Lamb, C. W., Hair, J. F., & McDaniel, C. (2012). MKTG5. Mason, OH: South-Western, Cengage.