1. *copyright 2007 Urbany and Davis, Revised and used with permission Smith Design, Ltd.: Applying 3-Circles Strategic Insight in 3 Circles* Prepared for Toro/EIGCA seminar October, 2011

2. ©copyright 2007 Urbany and Davis The Case of Hop-n-Scotch Bad things can happen when tactics take the place of marketing strategy!

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4. Smith Design, Ltd. Applying the 3-Circle Process An Illustration

5. The 3-Circle Elements Market - organizations with needs to satisfy, money to spend, and a willingness to spend it. –Market segments - sub-groups within a market that share important demand features but differ from others in the same market Firm - firm or a unit of the firm Competition - one or more organizations pursuing the segment being analyzed

6. ©copyright 2007 Urbany and Davis Smith’s Market Options What markets might Bradley Smith consider for the Context of the 3-circle analysis?

7. ©copyright 2007 Urbany and Davis Selecting a Market Group of Prospects with: –Needs to satisfy –Money to spend –Willingness to spend it Issues to Consider: –Strength of the need(s) –Size of the group (segments?) –Alternative solutions

8. Market Context Statement (step 1 to be revised later) “My goal is to figure out how (I/we/my company/division) can grow by creating more value for (customer/market segment) than (my competitors) do.” “My goal is to figure out how Smith Design, Ltd. can grow by creating more value for Multiple use course adapters than competitors for this market do.”

9. Customer Analysis (steps 2, 3, & 4) Customer Value Basics –Attributes/Benefits sought by the market and its segments, along with importance What does Bradley Smith know and what can he learn about this market? –Sources of information? –Are there market segments - Subgroups defined by important demand features?

10. Begin with the circle, the area of which represents requirements, needs or desired seller attributes of courses seeking multiple use adaptations. 1.Customers’ Desired Attributes

11. ©copyright 2007 Urbany and Davis Benefits Sought by Market What are some attributes or desired benefits you might expect of this (adapters) market?

12. Market’s Desired Attributes “Before” analysis (data from inside Smith Design) –Sources?

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14. Market’s Desired Attributes “After” analysis (data from actual or potential customers) –Sources?

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16. Benefits Sought by Market Heavy usage Permanence (durable) Design competitively priced Aesthetically pleasing Low maintenance Easily accessible Broadly appealing Urgency (immediacy) Etc.

17. ©copyright 2007 Urbany and Davis Importance and Reconciliation Estimate importance (low, moderate, high) for “Before” and “After” worksheets (column 2) Reconcile differences –Potential insights?

18. ©copyright 2007 Urbany and Davis Benefits Sought by Market Heavy usage - H Permanence (durable) - M Design competitively priced - H Aesthetically pleasing - L Low maintenance - M Site easily accessible - L Broadly appealing - L Urgency (immediacy) - M

19. For courses seeking multiple use adaptations… 1.Customers’ Desired Attributes Price Heavy usage Permanence Low maintenance Urgency assume these are the most desired attributes

20. 1.Customers’ Desired Attributes Heavy usage Urgency Permanence Competitive price Low maintenance …but even if they have the same needs, not all market members have the same need priorities Low price Low maintenance Heavy usage Permanence Urgency

21. 1.Customers’ Desired Attributes Heavy usage Urgency Permanence Competitive price Low maintenance Priorities define market segments Low price Low maintenance Heavy usage Permanence Urgency

22. ©copyright 2007 Urbany and Davis Attribute Importance Rating Segment 1 –Heavy usage –Urgency –Permanence –Competitive price –Low Maintenance Segment 2 –Price –Low maintenance –Heavy usage –Permanence –Urgency

23. 1.Customers’ Desired Attributes Heavy usage Urgency Permanence Competitive price Low maintenance “Private Developer” A segment is selected for analysis based on several criteria… Low price Low maintenance Heavy usage Permanence Urgency “Municipality” ? ?

24. Selecting a Segment for Analysis Readiness to Act Accessibility Size Compatibility Competition

25. 1.Segment’s Desired Attributes Heavy usage Urgency Permanence Competitive price Low maintenance Private Developers This segment best meets the conditions What might some “Deep Diving” reveal?

26. ©copyright 2007 Urbany and Davis Segment Context Statement (step 1 revised) “My goal is to figure out how Smith Design, Ltd. can grow by creating more value for Private developers of multiple use course adaptations than Green Space Providers, Ltd. and others do.”

27. ©copyright 2007 Urbany and Davis The Firm: Smith Design, Ltd. (step 5) Identify Smith Design Ltd. CRA’s for this segment –“Before” Analysis and Worksheet (column 3) Smith’s view –“After” Analysis and Worksheet (column 3) Market’s view How is Smith Design perceived by this market? –Does Smith have an accurate notion of what this market believes about his firm? –Can Smith identify the market’s perceptions of his firm?

28. Smith Design Attributes “Before” Analysis –Experience –Staff –EIGCA membership –Time –Relationships –Reputation “After” Analysis –Experience –Reputation –Time

29. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes Smith Design, Ltd. Smith’s reconciled capabilities, resources, and assets are represented by this circle

30. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes Smith Design, Ltd. Smith’s reconciled capabilities, resources, and assets Time Experience EIGCA member Relationships Staff

31. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes This overlap represents the value customers in this segment believe Smith can create for them Smith Design, Ltd.

32. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes … in other words … Smith Design, Ltd.

33. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes This overlapping area represents Smith’s positive value or “equities.” Equities Smith Design, Ltd.

34. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes Disequities and Potential Equities Smith needs to determine how much his firm’s equities overlap with this segment’s needs… Unmet needs Smith Design, Ltd.

35. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes Here we match the overlap of Smith’s CRAs with this segment’s needs? Smith Design, Ltd. Urgency&Time Permanence&EIGCA Private Developer segment Aesthetic&Experience

36. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes These areas are also meaningful Smith Design, Ltd. Private Developer segment

37. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes Customers feel they don’t need some of the value Smith creates (yet?) Disequities and Potential Equities Smith Design, Ltd.

38. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes Here Smith has his unmatched and matched CRAs Smith Design, Ltd. Urgency&TimeStaff Relationships Permanence&EIGCA Private Developer segment Aesthetic&Experience

39. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes Disequities and Potential Equities … and there are needs of the segment neither Smith nor his competitors recognized so they go unmet… Unmet needs Smith Design, Ltd Private Developer segment

40. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes Disequities and Potential Equities … an unmet (or unrecognized) need might be… Smith Design, Ltd Private Developer segment Environment friendly

41. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes Disequities and Potential Equities Next Smith must recognize… Unmet needs Smith Design, Ltd Equities Private Developer segment

42. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes Disequities and Potential Equities Some of this space is shared with competitors Unmet needs Smith Design, Ltd Equities Private Developer segment

43. ©copyright 2007 Urbany and Davis Competition (step 6) What other firms are pursuing this market segment? – Likely sources of information? “Before” Analysis Worksheet –Smith’s view of competitors (Green Space Providers, Ltd.) resources (column 4) “After” Analysis Worksheet –Segment’s view of competitors (Green Space Providers, Ltd.) resources (column 4)

44. Equities Disequities/ potential equity Unmet need 1. Customers’ desired attributes 2. Company equities/ disequities 3. Competitor equities/ disequities … there are competitors who also create value for customers… Smith Design, Ltd. Green Space Providers, Ltd. Private Developer segment Points of Parity Disequities/ potential equity

45. Equities Disequities/ potential equity Unmet need 1. Customers’ desired attributes 2. Company equities/ disequities 3. Competitor equities/ disequities What both Smith and his competitor offer… Smith Design, Ltd. Green Space Providers, Ltd. Private Developer segment Points of Parity Disequities/ potential equity

46. 1. Customers’ desired attributes 2. Company equities/ disequities 3. Competitor equities/ disequities Once Competitors are added…

47. 1. Customers’ desired attributes 2. Company equities/ disequities 3. Competitor equities/ disequities Every unique area in the model takes on meaning…

48. 1. Customers’ desired attributes 2. Company equities/ disequities 3. Competitor equities/ disequities B Points of Parity … Area B contains the table stakes… value Smith must provide to be in the game…

49. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes Absolutely must have… Smith Design, Ltd.Private Developer segment Aesthetic & Experience Green Space Providers, Ltd. 3. Competitor equities/ disequities

50. 1. Customers’ desired attributes 2. Company equities/ disequities 3. Competitor equities/ disequities B Points of Parity … Area A is Smith’s unique value to customers, the most important concept in his competitive strategy… A Smith’s points of Difference

51. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes Smith has these advantages over the competition… Smith Design, Ltd. Urgency & Time Permanence & EIGCA Private Developer segment Green Space Providers, Ltd. 3. Competitor equities/ disequities

52. 1. Customers’ desired attributes 2. Company equities/ disequities 3. Competitor equities/ disequities B Points of Parity Yet, the competitor has desirable points of difference as well… A Smith’s points of Difference C Their points of Difference

53. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes Smith must neutralize or duplicate this… Smith Design, Ltd.Private Developer segment Broad appeal Green Space Providers, Ltd. 3. Competitor equities/ disequities

54. 1. Customers’ desired attributes 2. Company equities/ disequities 3. Competitor equities/ disequities B Points of Parity Smith’s profitability depends upon the relative size and importance of his Area A compared to competitors’ Area C A Smith’s points of Difference C Their points of Difference

55. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes Are Smith’s advantages more attractive than the competitor’s? Smith Design, Ltd. Urgency & Time Permanence & EIGCA Private Developer segment Broad appeal Green Space Providers, Ltd. 3. Competitor equities/ disequities

56. 1. Customers’ desired attributes 2. Company equities/ disequities 3. Competitor equities/ disequities B Points of Parity Area D is value competitors create that currently is not seen as valuable by the segment! A Your points of Difference C Their points of Difference D Common disequity/ Potential equity

57. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes Possibly essential resources but often ignored by the market… Smith Design, Ltd. Staff Private Developer segment Green Space Providers, Ltd. 3. Competitor equities/ disequities

58. 1. Customers’ desired attributes 2. Company equities/ disequities 3. Competitor equities/ disequities B Points of Parity … and each competitor has its own unique area of Potential Value A Smith’s points of Difference C Their points of Difference D Common disequity/ Potential equity E Smith’s disequity/ Potential equity F Their disequity/ Potential equity

59. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes Opportunity exists here… Smith Design, Ltd. Relationships Private Developer segment Green Space Providers, Ltd. Size 3. Competitor equities/ disequities

60. 1. Customers’ desired attributes 2. Company equities/ disequities 3. Competitor equities/ disequities B Points of Parity Significantly for the future, every customer/segment has “white space” A Smith’s points of Difference C Their points of Difference D Common disequity/ Potential equity E Smith’s disequity/ Potential equity F Their disequity/ Potential equity G “White Space”

61. 1. Customers’ desired attributes 2. Smith’s equities/ disequities 3. Competitor equities/ disequities B Points of Parity … an area representing customers’ needs that haven’t yet been met… A Smith’s points of Difference C Their points of Difference D Common disequity/ Potential equity E Smith’s disequity/ Potential equity F Their disequity/ Potential equity G “White Space”

62. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes Can Smith do something about this unmet need? Smith Design, Ltd.Private Developer segment Environment friendly Green Space Providers, Ltd. 3. Competitor equities/ disequities

63. 1. Customers’ desired attributes 2. Smith’s equities/ disequities 3. Competitor equities/ disequities B Points of Parity This illustrates the model… it captures the market segment, the firm, and the competition. A Smith’s points of Difference C Their points of Difference D Common disequity/ Potential equity E Smith’s disequity/ Potential equity F Their disequity/ Potential equity G “White Space”

64. 2. Company Equities/ Disequities 1. Customers’ Desired Attributes So in the final analysis, the 3- circles might look something like this… Smith Design, Ltd. Urgency & Time Staff Relationships Permanence & EIGCA Private Developer segment Broad appeal Environment friendly Aesthetic & Experience Green Space Providers, Ltd. Size 3. Competitor equities/ disequities

65. ©copyright 2007 Urbany and Davis Alignment (step 8) Does Smith Design have a “Competitive Advantage” in this market? –Points of Difference –Sustainable CRA basis for points of difference

66. ©copyright 2007 Urbany and Davis Dynamics (step 9) What changes are predictable in the: –Market –Competition –Environment

67. ©copyright 2007 Urbany and Davis Finding Growth Opportunities (step 10) Is this a viable segment for Smith? –Can Smith meet its needs better than the competition? –Is it financially attractive?

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69. Positioning Statement Format For (target customer) Who (statement of need) Our (product/brand) Is a (product category) That (key benefit/reason to buy) Unlike (primary alternatives) We provide (differential advantage)

70. ©copyright 2007 Urbany and Davis Smith’s Positioning Statement For Private Developers adapting existing golf courses for multiple uses Who require rapid design responses that provides durable facilities, Our staff at Smith Design, Ltd. Are highly capable and experienced land planners that provide customized designs for multiple use facilities including aspects of golf. Unlike Green Space Providers, Ltd., We provide designs that incorporate golf with regionally appealing outdoor recreation and spectator venues that are environmentally friendly.

71. ©copyright 2007 Urbany and Davis Adding Tactics Now (and only now) Smith is ready to devise marketing tactics: –Assess the offering (learn new skills, acquire equipment, adapt staff?) –Plan sales contacts –Design messages (presentations, media) –Set a price