Diversification

Diversification is a strategy for company growth through starting up or acquiring businesses outside the company's current products and markets (p.44 Kotler) This means that a company is developing new markets and new products.

I first found about McCafe in Japan and was amazed by its different style from traditional McDonald store. I found more information online at McCafe's website. http://www.mccafecoffee.com/

McDonald's starting of McCafe is an excellent example of diversification. By starting McCafe, McDonald's is offering new products that were not available in traditional McDonald's stores. McCafe specializes in serving cafes, which attracts customers that usually don't come to McDonald's to eat fastfood. McCafe is also not only a product development. McCafe has its own section of the store and clearly distinguishes itself from the traditional McDonald store. The store has modern, yet relaxing mood. This is important to attract new market segments, probably customers that go to cafe not to satisfy hunger, but possibly to take a sip of coffee and chat in a relaxing environment. Thus, McDonald's McCafe serves as an example performing diversification by developing both new products and new markets.

Shogo Okuda
Section G

Mission Statement, Market Segmentation

Last summer, a door-to-door salesman came to my door and offered me a great deal on a Comcast internet and phone bundle. Yes, the deal was for only six months, but he assured me that, when the six months ended, I could sign up for another promotional rate, and I'd still save lots of money over Verizon. Tonight, I got my new Comcast bill in my e-mail, and my 6-month promotional rate is over. My new rate is more than twice the promotional rate.

I used the chat feature to contact Comcast customer service, and I asked Marvin, the chat analyst, what he could offer me. He offered me about what I had been paying for Verizon. I asked him for something better. He gave me something $5 better. I asked him, "What is Comcast's Mission Statement?"

There was a long pause. After a few minutes, the chat feature indicated that the analyst was typing. He indicated that this was a new question for him. So I explained to him what a mission statement is, and that every company has one, and it should guide the decisions of all of the departments.

Apparently, there is a major disconnect at Comcast. They had a wonderful promotion to attract price sensitive customers, but now that they've got me, they really can't please me. They don't understand my aspirations. This is not Marvin's problem, and Marvin cannot do anything about it. The problem stems from much higher up. Marvin did not know what Comcast's mission statement is, he cannot fulfill it.

This is a good example because it directly addresses what we have been discussing in class. Comcast needs to communicate its mission statement to all of its employees and contractors. Their objectives and goals should be consistent with that mission, and their portfolio of product offerings should help them meet those objectives.

If the corporate level does a good job with those items, the marketing team can effectively fulfill its function. Without clear direction at the corporate level, the marketing team does not know what customers it should seek. Comcast needs to segment the market and choose its segment before it begins a promotion cycle. If Comcast wants to target price sensitive customers, we are a huge market, but management within Comcast must plan on how Comcast will keep us happy after our promotional period ends. If Comcast does not want to target price sensitive customers, then it should not run promotions to attract us. This has led to a bad outcome.

In the end, I told Marvin that I'm just not part of Comcast's segment.

Becky Stevens
Section G