Chapter 7

Marketing planning Phase Two: the situation review (Part 2)

This is the second part of the situation review, in which we introduce some important tools such as life-cycle analysis and portfolio management to help service companies to understand better the factors they have to deal with in their strategies.

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Sub-audit 2 Competitive position

In any market segment, there are likely to be one or two critical factors which are the key to success, when looked at from the customer’s viewpoint.

There is empirical evidence that 20% of any given population can account for 80% of a result (Pareto’s law). In the same way, just as 20% of customers can realize 80% of the sales revenue, or 20% of the possible causes can be responsible for 80% of the total rejects, then just 20% of the possible factors can account for 80% of customer satisfaction.

For example, in the fast-food restaurant business, although customers might seek a wide range of things, their overall satisfaction level can be attributed to just a few. These are called the critical success factors. Let us suppose that research showed these to be:

1. Served quickly (30%)

2. Always a seat (30%)

3. Clean surroundings (25%)

4. Reasonable choice (15%)

It would also be possible to establish by research the relative importance of these factors, as shown by the figures in the brackets above. This means that these customers ...

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