BUSINESS FUNDAMENTALS

FOR ENTREPRENEURS

Prof. Devdip Purkayastha

Indian Institute of Technology Bombay

Desai Sethi School of Entrepreneurship
https://www.iitb.ac.in

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 MODULE 10
CUSTOMERS & SEGMENTS
 WEEK 5, MODULE 10
CUSTOMERS & SEGMENTS

PART 1
WEEKS 5 - 8

MARKET CUSTOMERS
09 10
RESEARCH & SEGMENTS

VALUES BASED MARKETING

11 12
MARKETING COMMUNICATION

SALES CHANNELS B2B & B2C

13 14
& DISTRIBUTION SALES
ACCOUNTING
CUSTOMER SERVICE SUPPLY CHAIN &
15 16
MANAGEMENT LOGISTICS
Module-10 Topics

Customer & Segments

Customer
Customer Customer
Value
Needs Segments
Proposition
Customer & Needs
A customer is a person or a company that buys
goods or services from another company to meet
their ‘unmet needs’. Customers have a wide range of
needs and they require a wide range of products and
services.

Companies acquire and retain customers by

developing relevant offerings which they market,
advertise, sell, distribute and service in a way that is
superior to competitors.

It is often said that "the customer is always right"

because customers are more likely to buy products or
services that best meet their needs. Without
customers, there will be no revenues or even a
company !
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New Product Failure

Only 0.14% of all FMCG launches, only 23 out of

16,914 to be precise, from 2012 as evaluated by
Nielsen are considered breakthrough innovations
in the research firm's re-port.
https://economictimes.indiatimes.com/why-99-9-of-fmcg-innovations-fail/articleshow/46918237.cms
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Startup Failure

Research by Harvard Business

School’s
Shikhar Ghosh*
shows up to 95% of startups
fail to meet their own projections !!

(*http://hbswk.hbs.edu/item/why-companies-failand-how-their-founders-can-bounce-back)

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Why Startups Fail?

9
Need Identification

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Customer Problem

Customer Problem is an “unmet need”

resulting in actual or potential
loss and dissatisfaction.

Thus, solving a customer problem and

meeting the unmet need is of
tangible value.

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Maslow’s Needs Hierarchy

12
Basic Needs

13
Social Needs

14
Esteem Needs

https://www.deccanchronicle.com/sunday-chronicle/high-life/280517/an-uber-jean-pool.html

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Self Improvement Needs

16
Self Actualization Needs

17
Highest Order Needs

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Company Needs

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Problem Definition

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Problem Definition Template
I AM: ___________________________________

MY NEED IS: ___________________________

WHICH WILL HELP

ME:__________________

MY BENEFIT IF I GET:__________________

MY LOSS IF I DON’T:____________________

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THREE MINUTE
REFLECTION

Think a Product that you use?

▪ What need does it meet?
▪ Who makes the product?
▪ Who are the competitors?
▪ Why do you not use the competitor
products?

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 WEEK 5, MODULE 10
CUSTOMERS & SEGMENTS

(Continued Part 2)
B2C Customers
B2C, or business-to-consumer, is a business
model where products or services move
directly from a business to a consumer.
A consumer is a person who purchases the
products, or services primarily to meet their
own personal, household or community
needs. For example:
• Men & women
• Students
• Workers
• Farmers
• Businessmen (for their personal use)

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 Poor
Class
Middle
De
mo
gr
ap
hy
Geo
gra
Rich

phy

Behavioral

ych og r aphy
Ps

t /
u c
o d ce
Pr r vi
Se
B2C Customer Segments

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B2B Customers
B2B is ‘business-to-business’, i.e. when a
business buys from another business.
Typically businesses or companies buy
offerings for work-related activities such as:
• Raw materials
• Components
• Packaging Material
• Machinery
• Logistics Services
• Financial Services
• IT Services
• HR Services

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 Small
In
du
st
ry

Geo
gra Medium
phy
Large

Tech
n ology

s y s te m
Ec o -

t /
u c
r od ice
P rv
Se
B2B Customer Segments

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B2B vs B2C Differences
B2B Customers
• Companies & Organizations
• More complex requirements
• Fewer in number
• Larger order size
• Complex decision making

B2C Customers
• Individuals, Families or Small Groups
• Less complex requirements
• Large in number
• Smaller order size
• Simpler decision making 28
 B2B
CUSTOMERS
AROUND US !

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Grocery
Store

30
Company

31
Bank

32
Hospital

33
Airline

34
Government

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 B2C
CUSTOMERS
AROUND US !

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Farmers

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Students

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Community

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THREE MINUTE
REFLECTION

Think of potential customers for various

industries?
▪ FMCG products
▪ Medicines
▪ Smart phones
▪ Smart phone apps
▪ Robots
▪ Aeroplanes
▪ Courier Service 40
Customer Value Proposition
A value proposition conveys in 2-3 simple,
memorable sentences what a brand, product
or service does + how it differs from
competitors, preferably with statistics and
facts. It should cover:

• What is the brand and what is it offering?

• What ‘job’ can the customer use the brand
to do i.e. what ‘needs’ can be fulfilled?
• What is the potential benefit of fulfilling
those needs and getting the job done?
• What are 1-2 most competitive products
and how is the brand different / superior?
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Superior Value Prop

BETTER

JOB TO
BE DONE,
NEED TO
BE MET

FASTER CHEAPER

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Superior Value Prop

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Value Prop Template
FOR CUSTOMERS:_____________________

WHO NEED TO: ________________________

OUR PRODUCT:________________________

HELPS BY:_____________________________

WHICH IS BETTER
THAN:_________________

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THREE MINUTE
REFLECTION

Think of a Brand or Product that you

use regularly
▪ What Customer Problem does it
solve for you?
▪ How does it solve?
▪ How is it better than competitors?
▪ Do you still have some unmet
needs with the product?
▪ Are you happy with the price?
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 End of Module

Indian Institute of Technology

Bombay
IIT Bombay, Powai, Mumbai 400 076, Maharashtra, India
Phone: +91 (22) 2572 2545 | Fax: +91 (22) 2572 3480
https://www.iitb.ac.in

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