Johnson Snacks Case Study Case Study Sample

Using the framework in Figure 9-4, how would you categorize each of the three customer segments?

In order to categorize each segment systematically, information on each customer segment’s number of store location and total annual unit sales, as well as the cost and expenses per store must be taken into consideration. Below is a table that summarizes all of that information.
The ultimate indicator to be used would be the annual unit sales per store because it summarizes the profitability of a segment based on the number of store it operates and the annual unit sales per year. Basically, the higher the value of a segment in this category, the more profitable it is. In this case, the segment with the highest profitability would clearly be Johnson Snacks (400,000 annual unit sales with only 6 store locations). It really leaves out the other two segments in terms of profitability. Therefore, in Figure 9-4, it must be located on the upper right box (Commitment to Customer Success) because it is the segment that offers the highest revenue and profit on a per store basis.

How should Johnson Snacks respond to the letter from Discount 2 You?

Johnson Snacks’ possible responses to the letter from Discount 2 You can only be categorized into two: it can only be either positively (they will commit to fulfilling the new demands of Discount 2 You) or negatively (they will not honor the new demands of the customer). In case Johnson Snacks would pick the second option, its business ties with its single largest customer would most likely be canceled which sets up the stage for the next question on whether the company could afford to lose its single largest customer. The answer would most likely be no because Discount 2 You constitutes roughly 12% of the company’s total sales and losing that volume of sales would be devastating for the company’s finances. Therefore, Johnson Snacks must adhere to the updated demands and expectations of Discount 2 You.