5.1.3 Portfolio strategy

The matrix in figure 14 effectively captures the combined view of the customer attractiveness and the competitive position. The size of the circles represents the number of loops. The four quadrants divide the potential key account portfolio into target customers, top customers, basic customers and questions marks.

account <a href=">portfolio (Source: On the basis of Zupancic Dirk / Belz Christian / Bussmann Wolfgang F., Source: Kappa packaging, page 177)" class="wp-image-9101 size-full" height="317" src="https://sgbs.ch/wp-content/uploads/Figure-14-Potential-key-account-portfolio.png" width="512"> Figure 14: Potential key account portfolio (Source: On the basis of Zupancic Dirk / Belz Christian / Bussmann Wolfgang F., Source: Kappa packaging, page 177)

The strategy of MTPRO is to focus entirely on the target customer group. The reason is we have the biggest upside potential, respectively incremental sales opportunities with these target customers. Therefore targeting these customers provides the biggest leverage for incremental profit for the PRO division within a market organisation.

While introducing the KAM concept another advantage of this strategy is the much smaller conflict potential with the territorial sales force when a target customer instead of a top customer is allocated to the Key Account Manager. The reason is that only relatively small current sales from target customers is shifted to the Key Account Manager compared to the scenario of relatively high sales shift from top customers.

While establishing the potential key account portfolio the ideal but realistic scenario is to have 15 customers captured in the target customer’s quadrant. There is a possibility that the portfolio shows less than 15 target customers. If this scenario is reality the recommendation is to reassess the question mark group and to fill the gap to the 15 selected key accounts with the most attractive ones from that group.