Fending Low Price Competition through Big Picture Segmentation: Futura Industries
In 2003, Futura Industries, an aluminum extrusion company based near Ogden, Utah, was facing rising commodity prices and fierce low-cost competition from Chinese producers. The company used the Big Picture to re-segment its customer base. This implied moving away from a traditional multi-variate approach (identifying multiple market segments with diverse needs and then trying to serve all of them simultaneously through differentiated service offerings) toward a focused benefit approach.
The company adopted a retention stimulate demand strategy positioned on reliability, keeping its promises to customers, and responsiveness. The company’s new positioning is supported by a no-hassle, delivered in 48 hours or it’s free, order fulfillment guarantee for catalogue items. Since implementing its new positioning, the company has enjoyed double-digit revenue and net profit growth. It has successfully fended off low-cost competitors and is able to command a price premium in a market many considered commoditized.