Pirate Leadership

(Continued from previous page) tant to their buying decision.

Product or service - What percentage of a customer's buying decision is based on the quality of the product or service'l Are customers in your market most concerned with matters like high functionality, product features, and benefits?

Marketing and PromotionIncluding your corporate profile, sales, advertising, and promotions, what percentage of importance would customers assign to promotional efforts for the product? How much influence do marketing and advertising have on product sales? What value, for instance, do consumers in the market for personal computers place on wordof mouth advice? On TV and in magazine ads? On a company's larger reputation in the marketplace?

Image may receive a high percentage of customer perceived value for more heavily marketed items, such as soft drinks, but a low percentage for specialized machine parts.

Place - Location of your business doesn't always matter, but it might influence customer perception of value if, for instance, you produce heavy machinery that consumers would buy frequently and routinely would incur high shipping costs.

At the end of this first step of the process, you will come to a conclusion such as thisl. 60Vo of customers' decision to buy product X in your market is based on product quality; 20Vo of their choice is based on price, and only lOVo each on promotions and place.

After you have allocated an overall percentage to each Marketing Mix Factor. further break down each factor, assigning percentages of customer perceived value to the elements that comprise that factor. For example, you might break down price into levels, quantity discounts, terrns, etc.

Assign a rating on a scale of I to l0 (10 being the ideal) to each element within the Marketing Mix Factors to indicate how your customers would rate you on each of them. At this point, you may determine that your product is outstanding in terms of X and Y but that you are at a disadvantage in certain areas, like Z. If, however, you've determined that Z doesn't matter that much to consumers in your market, you can focus on beefing up your advantage in the X and Y areas.

The goal is to develop a strategy based on your competitive strengths. Repeat this process using your competitors' product or service. This will help you to develop a picture of how you and your competitors stack up in your customers' eyes.

Determine where your company is superior, equivalent and inferior. If you determine that your product is superior, for instance, that's the advantage on which you'll build to create your strategies.

2.Dra* up the treasure map

The planning team is now in a position to create a strategy that will build upon your competitive advantages while capitalizing on your competitors' weaknesses. The earliest pirate captains found that the key to leading was to involve their crews in all planning decisions: where to sail, how to divide treasures. and who their officers would be.

Likewise, as a leader you'll want to include as many of your key people as possible to plan and implement, in order to maximize the level of commitment to the mission.

If you determine a clear competi- tive advanta-ge rvithin your markct in rapid product developntent. firr cxample. your strategy should plan to grow that further.

Cut costs. Not comers. Etectro nic i nvoice detivery is just one of the hundreds of ways DMSi software can hetp your business maximize time and profit.

Similarly. if you have lost a cornpetitive advantage in customer scrviceif l our competition is superior to you in this regard and it's an important factor in customer value perception fclr the product your company produces-your plan should be to improve in that area.

3. Steat market share, ship by ship

You nccd not take your industry by storm and be the biggest and best. Like thc pirates. you don't want to fire all of your guns at once. hoping to obliterate compctition thiit's too bi-c for you to takc on. Avoid the big ships-the Navy vessels that can outfirc you-until you've dcvclopecl a fleet clf your own. Do this by finding niches ivithin thc overall rnarket lvhere you have cc'rlnpetitivc advantages. While you increase your sales, your competitor may or may not recognize your gains, or their losscs.

Repeat this incrcmental salcs approach in several portions of the rnarket, and you can generate a sub\tiintial lead before your ctlmpetitrrrs even know to react. Airlines likc Southr.vest did this: instead of opcnly pursuirrg the business of the le-lacy carriers, they developed a niche for economy f I iers and incrementally took arvay rnarket share befble their cornpctition even realized it.

Make those scurvy dogs walk thc plank

By firllorvin.u this thrcc-step strategy. you leave your competitor r,vith onll tn rr e hoie e :: t | ) crrgugc in an expenslve counterattack to rcgain market sharc. clr' (2) sr-rrrcndcr prlrtions of the rnarket to you. Whcn you have a sustainable compctitivc aclvantage and a flawlessly cxccutccl strategy. they ofien havc little choicc bLrt to surrender a portion of the rnarkct to you again and again. And eventually you'll send them straight to Davy Jones'locker!

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