Download Colin Egan: Beyond the Crisis, Back to Marketing Basics

Beyond the Crisis, Back to Basics
DMS – Association for Marketing of Slovenia
Ljubljana, 22nd October 2010
IEDC - Bled School of Management
Professor Colin Egan
Professor of Marketing and General Management Program Director
IEDC – Bled School of Management
Slovenia
The Marketing Landscape
• Not Only...
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Procter & Gillette / Nestle / Danone / Coca-Cola / . . .
IBM / GE / Microsoft / Siemens / Erickson / Hitachi / Samsung / . . .
McDonalds / Starbucks / Gap / Sogo / FCUK / . . .
E-Bay / YouTube / Amazon / Gooooooooooooooogle / InYourFace / . . .
• But Also...
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Service / Organisational / Consumer Sectors
Big Firms / Medium Size Firms / Little Firms / Very Little Firms / Not-for-Profit etc.
Supply Chain / Information Systems / Manufacturing / Human Resource Management
etc.
Finance!
• Plus!
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Governments
Health Services
Charities
Not-for-Profit Organizations
Praxis
”philosophers have only
interpreted the world in
various ways; the point is to
change it ”
Marketing Management:
Theory & Practice
• Royal Philips International
– Philips Marketing Academy
• IBM
– IBM Marketing University
• BP & Castrol
– BP Sales & Marketing Academy
• YKK
– Marketing Excellence Programme
• Chartered Institute of Marketing
Strategic Marketing:
A Themed Approach
Delivered
Customer
Value
Innovation
Strategic
Clarity
Total
Brand
Management
Beyond the Crisis, Back to Basics
Strategic Clarity
Contrasting Business
‘Philosophies’
Production
Orientation
Product
Orientation
Selling
Orientation
Marketing
Orientation
Low-Cost
Capacity
Quality-Creation
Capacity
Standard
Capacity
Research
Market Needs
& Conditions
Make Low-Price
Products
Make Best
Quality
Products
Use Heavy
marcomms
& Selling
Plan Solutions
& Strategies
Assume
Customers
Will Buy
Assume
Customers
Will Buy
Assume
Customers
Will Buy
Supply
Solutions
& Strategies
Strategic Clarity
Effectiveness & Efficiency
Efficient
Inefficient
Ineffective
Effective
Die Slowly
Market
Ruler
Die
Quickly
Survive
If
Fixed
Effectiveness:
‘Doing the right things’. Long-term, strategic, customer-focused, competitively differentiated
Efficiency:
‘Doing the right things’. Short/medium term, operational excellence
The Central Principles of
Strategic Marketing Management
Customer
Value
Beyond the Crisis, Back to Basics
Customer Value
Customer Value:
Multiple Dimensions
Customer
Value
Driving Customer Satisfaction:
Delivering Value
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Economic (EVC)
Psychological (PVC)
Customisation
Product functions
Product durability
Product reliability
Delivery reliability
Delivery time
Pre-sale service
Post-sale service
Price
Financial terms
Etc.
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Relationship image
Previous relationship
Trust
Helpfulness
Contactability
Help in crises
Order responsiveness
Advice & information
Complaints processing
Harmonious dealings
Etc.
And More Value…
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Customisation
Forward linkages
Lending equipment
Lending staff
Joint R&D
Dual selling
Help in crises
Free trials
After-sales service
Pre-sales advice
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Free installation
Returns service
Electronic linkages
Keep in touch service
JIT delivery
Any order size ok
Consultancy
Countertrade
Satisfaction studies
Etc.
Market Segmentation & Positioning
Select Target
Segments
Segment
the Market
Group customers
with similar needs
& preferences and
separate them
from others with
different needs &
preferences
Select the most
attractive segments
given key success
factors, segment
profit potential, risk
assessment &
company capability
analysis
where
Decide
Marketing Mix
Standardisation
Establish
Segment
Positioning
(Brand)
Decide how many
segments to
target and with
how much
marketing mix
standardisation
Ensure that
customers in each
segment perceive
that we can
satisfy their
needs &
preferences
better than rival
offerings
how
The Customer Relationship
Management Process
•Customers
•Competitors
•Capabilities
REVIEW
Customer Sat
Loyalty
Trust
•Substantial
•Profitable
•Growing
•Loyal
Customers’
• Strategy
• SWOT
• Value Chain
Select Generic
Strategy
Select Potential
Customer Targets
Analyse
Customers
In Depth
Consolidate to
Partnership
Develop the
Relationship
Customise the
Offerings
•Ongoing
Satisfaction
•Value Innovation
•Trust Drivers
•Team Linking
•Commitment
•Cooperation
•Buy Criteria
•Value Driving
•Customer Share
Driving
Beyond the Crisis, Back to Basics
Innovation
Long Term Profit Drivers
Profit = Revenues - Costs
Relative
Market Share
Price
+
Productivity
(JVs/SAs/Outsourcing
Price/Portfolio Mgt etc.)
Innovation
(Growth Strategies)
Organization
Innovation Strategies for
Long Term Profitable Growth
Copy Rivals
Beat Rivals
(First & Fast)
Respond to
Changing Needs
& Preferences
Long-Term
Growth
Market
Complementary
Products
Spread
Risk
Build a
Balanced
Portfolio
Leverage Core
Capabilities
Exploit Strategic
Windows
Stakeholder
Image
Enhancement
Off-set
Disruptive
Technologies
The Innovation Process
Environmental Scanning
Generating Ideas for Profitable Growth
First Phase Ideas Screening
Concept Formulation and Evaluation
Advanced Screening and Business Case Development
Budget Allocation and Project Development
Market Evaluation and Project Review
Market Commercialisation
Market Evaluation, Project Review and Control Actions
Beyond the Crisis, Back to Basics
Total
Brand Management™
Brand Equity: The Boomerang Principle
Brand Equity
+
Customer Loyalty
=
Customer Profitability
Brand Personality, Essence & Positioning
Improves
Brand
Memorability
Gives a
Reason to
Believe
Guides &
Enhances Brand
Strategy
Brand
Essence
The Bottom Line
Provides a Value Proposition,
Credibility & a Foundation for
Long Term Stakeholder
Relationships
Provides Meaning
& Focus to the
Organization
Total Brand Management™:
Positioning for Competitive Success
1. Brand Foundations: The Value Proposition
2. Route to Mind: Integrated Marketing
Communications & Brand Reputation
3. Route to Market: The Channel Management
Process & Brand Delivery
4. Route to ‘Stakeholder’ Value: Price
5. Route to Success: Effective Implementation
Building the Value Proposition
Knowledge
Advantage
Information
Processes
Features
& Performance
Brand
Power!
Human Resource
Competencies
Personnel Rules
& Procedures
Inputs
Quality
Service
Support
Intensity
(Advertising /
Sales Force)
Superior
Technology
Content
Technology
Support
The Benefits of Brands for Suppliers
Enable
Segmentation
& Positioning
Underpin Strategic
Defence
(Buy Time)
Drive Offensive
Marketing
(Stretch/Extend)
Create & Maintain
Intangible Image
Sustainable
Strategic
Advantage
Intellectual
Property
Give an Identity
to Products
Transcend
Technologies
Build Loyalty,
Share &
Profitability
The Benefits of Brands for Consumers
Recognition
& Familiarity
Buying
Effectiveness
Identification
Assurance
Buying
Efficiency
Easier Choice
Risk
Avoidance
The Benefits of Brands for
Channel Partners
Raises
Stockturn
& Margins
Enhances
their Stores
Buying
Effectiveness
Strategy &
Profits
Reinforces
their
Positioning
Buying
Efficiency
Builds Store
Traffic
Strategic Brand Analysis
Customer Analysis
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Competitor Analysis
Trends
Motivations
Segments
Unmet needs
- Brand image/position
- Strengths/vulnerabilities
External &
Internal Analysis
Self-Analysis
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Existing brand image
Brand heritage
Strengths/weaknesses
The brand’s ‘essence’
& personality
What’s in a Name?
The Brand Management Process
Brand Process
Inputs
Value
Creators
R&D
Services
Engineering
Etc.
Customer
Focus
Intangible
Marketing
Asset Management
Reputation
Distribution
Service
People
Know-how
Patents
Partnerships
Feedback
Outputs
Objective
Realised
Value
(+ve image)
Loyalty
Creation
Beyond the Crisis, Back to Basics
Conclusions
Leading
A
Marketing Organization
Verifying a Marketing Strategy
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Validity: Reliability of information and assumptions
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Distinctive: Differentiated from competition, industry
breakout
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Suitability: Given corporate strategy, objectives, etc.
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Feasibility: Given resources/competences
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Acceptability: Given company culture, ethics and values
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Consistency: Are the marketing elements balanced?
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Vulnerability: Given risks and contingency plans
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Flexibility: Can we adapt fast enough?
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Rewardability: Payoff versus risk
Assessing Marketing Strategy
Investments
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Discounted Net Present Value (NPV)
Required Internal Rate of Return (IRR)
Payback Period
Etc.
• Risk Assessment
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Opportunity Cost Analysis
Market Dynamics (Zero-Sum?)
Diminishing Returns Analysis
Assessing the Cost of Failure
Consider the Risk of NOT Making the Investment
Barriers to Implementing
the Marketing Philosophy
• Bounded (Constrained) Rationality
• Bounded Discretion
• Bounded Sensitivity
• Organizational Design (Structure & Culture)
• Inter-Functional Conflict
• Inter-Divisional Competition
• Science of Muddling Through!
And Finally: The Evidence
Explaining Superior Marketing Performance
Internal
marketing
A
long term
perspective
Understanding
buyer
behaviour
Marketing
Excellence
Balanced
portfolio
Innovation
Environmental
sensitivity
Asset-based
marketing
philosophy
Striving
for
competitive
advantage
Total Brand Management™
Customer-Based Assets & Liabilities
Tied-in
Clients
Product
Surety
Superior
Image
Customer
Based
Assets
Market
Leadership
Quality
Fit
Superior
Products
Superior
Price / Value
Superior
Service
Total Brand Management™
Channel-Based Assets & Liabilities
Tied-in
End-Users
Partnership /
Relationship
Widest
Coverage
Distribution
Based
Assets
Focused
Coverage
Superior
Intermediaries
Hybrid
Channels
Vertical
Integration
Forward
Linkages
(eg, EDI)
Total Brand Management™
Company-Based Assets & Liabilities
Planning
& Systems
Deep
Pockets
Marketing
Culture
Internal
Based
Assets
Managerial
Know-How
Employee
Know-How
Advanced
Technology
Driven
Costs
Flexible
Operations
The Role of Culture in Organizational
Success (McKinsey 7s framework)
Strategy
Skills
(Competencies)
Staff
Shared
Values
Style
(Leadership)
Systems
Structure
Shared Values: The Vector Metaphor
Desired Direction
1
Resultant Force
Shared Values: The Vector Metaphor
Desired Direction
1
Resultant Force
Desired Direction
2
Resultant Force
all materials © professor colin egan, 2010
www.colinegan.eu