What implications would the segmentation of gold star’s customer have on their customer focused
practices?
The implications of the segmentation of gold star’s customers have on their customer focused practices
are the following:
1. Every customer is different. For example, someone who wants to franchise is different from a
restaurant customer who wants to dine in. For their customers who dine in, they provide the
“Greater Cincinnati’s best tasting chili”. They made sure that the exact specification of the recipe
tastes the same at any of their 90 locations. They also provide services that caters the customers
to their satisfaction like timeliness and accuracy of the orders.
For their franchisee as its separate direct customer, they focus on how to improve the operations
within a store. Giving franchisee corporate assistance help them perform successfully. The sameday product replacement also leads to a stronger relationship with the franchisee since they
recognize how significant their commitment to the Gold Star brand is.
2. It also helps them identify who among the direct and indirect customers bring money, customers,
and who has effects on every loss or profit.
Indirect customers have an influence on profitability but do not create profits. By separating these
customers, the corporation can concentrate on lowering the expenses connected with each of
them. In addition, some indirect customers are sourcing, while others are different from them
such as legal.
It is fundamental to differentiate regulatory agencies, shareholders, and to some extent
brokers/consultants from the other indirect customers because they are not supply chain based
and are the responsibility of top management. Product suppliers, service suppliers, and copackers
must also be distinguished because the companies involved with each category are highly unlikely
to be involved in the others simply because they specialize.
There are certain consumers who give a greater percentage of profit than others.
Brokers/consultants are less likely than product suppliers to contribute to profitability, implying
that more people should work with product suppliers rather than brokers/consultants. Gold Star
may focus more on areas that are more vital to profitability by categorizing these clients.
One disadvantage of having a large number of customer groups is that corporate's capacity is
stretched thinner than if everyone worked on all customers at once. It is obvious that each
customer will be better understood if the company has a group of employees work on the specific
subset of customers, however if the group is overwhelmed by the amount of work on a subset of
customers, it is difficult to get help from other employees because everyone is specialized for
their own set of customers.