The 3-Circle Model in Marketing

 

 Hi readers! 

Today I will tell you about an interesting topic from Marketing Management class. The topic I am talking about is the 3-circle model to carry out the analysis of the complete market and where our company stands. Prof. Neeraj Pandey is our professor for the Marketing Management subject at NITIE. Without wasting any more time, let's see what exactly is this 3-circle model and how its analysis can be useful in deciding the company’s strategy.

The 3-Circle model provides a method of explicitly identifying the current state of customer value in a market and a variety of sources for improving a firm’s competitive position and profit potential.

There are three circles

1.      Customer Circle

Having identified the target customer segment for the analysis, we can depict the customer circle as reflecting the value they seek

2.      Company Circle

A circle that represents the customer’s perception of how well our company is delivering on the value that the customer is seeking

3.      Competitor Circle

The circle representing what our competitor thinks of how well it is able to deliver the value to the customer.

Rest things are very easy to comprehend through diagrams given below:

Area A: Our competitive points of difference. Build and defend.

Area B: Points of parity. This is the common value that customers may come to expect from all competitors. These attributes and benefits should generally be monitored and maintained at competitive levels.

Area C: Their (the competitor’s) points of difference. If there are absolutely critical dimensions that can be matched in cost-effective ways, there is a high priority on matching the competitor’s advantages. The exception is when the competitor’s strategy is built upon a fundamentally different positioning strategy.

Area D: This is nonvalue or disequity common to both competitors in the analysis. The goal here is to fix disequities if this action can contribute to your competitive advantage, reduce or eliminate attributes and benefits that customers find have little value, or potentially unearth value that has not been clearly developed or articulated to customers.

Area E: Similar to Area D, except that this nonvalue or disequity is specific to our company, so there may be some very high priority fixes here. In addition, the study of Area E might even emphasize the search for potential equities and unique capabilities the organization has that might be clarified and leveraged.

Area F: This is the competitor’s nonvalue or disequity. If chosen, the strategy of overcoming competitors’ deficiencies involves making better products and services than the competition and distributing them more effectively. In addition, a communications strategy can point out the problems with the competitor’s offering.

Area G: The white space represents areas of unmet need that neither competitor has touched. It is important to seek growth potential in unmet needs but in a structured and disciplined manner. Identify the deeper reasons underlying customer complaints and problems, and search for potential differentiating sources of new value for which we have a capability advantage.

The key benefits of the framework are the following:

·         Understanding the customer’s perspective with a focus on competitive assessment and the deeper values underlying customer decision making

·         Straightforward illustration of principles of competitive strategy and actionable implications for how to improve competitive position

·         An explicit focus on building competitive advantage through both capability development and communications strategy

That’s all for the 3-Circle Model

Stay tuned for more updates!!