Transcript Strategic Marketing Management

Figures and Graphs
© 2012 Alexander Chernev
The Role of Frameworks in Marketing Management
Framework
Typical
problem
Typical
solution
Abstraction
Specific
problem
Application
Specific
solution
Trial & error
The 3-V Principle of Managing Value
Company
value
Customer
value
OVP
Collaborator
value
Optimal value
proposition
The G-STIC Framework for Action Planning
Goal
Strategy
Tactics
Implementation
Control
Identifying Target Markets: The 5-C Framework
Customers
Competitors
Customers
Competitors
Customers
Competitors
Context
Context
Context
Identifying Target Customers & Developing a Value Proposition
Company
value
Customers
Customer
value
OV
P
Value
Collaborator
value
Competitors
Context
Customers
Competitors
Context
Value
Company
value
Customer
value
OVP
Collaborator
value
Designing the Tactics
Product
Service
Incentives
Communication
OVP
Brand
Price
Product
Service
Brand
Incentives
OVP
Price
Communication
Distribution
Distribution
Product
Service
Brand
Incentives
OVP
Price
Communication
Distribution
Developing an Action Plan: The Big Picture
Goal
Focus
Benchmarks
Strategy
Target
market
Value
proposition
Tactics
Product
Incentives
Goal
Value
proposition
Tactics
Incentives
Service
Brand
Communication
Price
Distribution
Implementation
Organizational
infrastructure
Business
processes
Implementation
schedule
Control
Performance
evaluation
Price
Distribution
Business
processes
Implementation
schedule
Control
Performance
evaluation
Strategy
Product
Brand
Communication
Implementation
Organizational
infrastructure
Focus Benchmarks
Target
market
Service
Environmental
analysis
Environmental
analysis
Segmentation, Mass Marketing, & One-to-One Marketing
Offering
Customer
Customer
Customer
Customer
Customer
Customer
Mass marketing
1
2
3
4
5
6
Offering A
Offering B
Customer
Customer
Customer
Customer
Customer
Customer
1
2
3
4
5
6
Segment-based marketing
Offering A
Offering B
Offering C
Offering D
Offering E
Offering F
Customer
Customer
Customer
Customer
Customer
Customer
1
2
3
4
5
6
One-to-one marketing
Market Segmentation Strategies
Non-segmented
market
Segmentation I
Segmentation II
Segmentation III
Strategic Targeting: Selecting Value-Based Segments
Segment A
Segment B
Segment C
Tactical Targeting: Linking Value and Profile Segments
Demographics
Behavior
© 2006 Alexander Chernev
Geography
Psychographics
Tactical Targeting Scenarios
“Sniper” targeting
(perfect fit)
“Shotgun” targeting
(broad)
Oversegmentation
(narrow)
Value-based segment (unobservable)
Profile-based-segment (observable)
© 2006 Alexander Chernev
Shot-in-the-dark
(misaligned)
Multi-Segment & Single-Segment Product Line Strategies
Target segment C1
Target segment C2
Target segment C2
Segmentation
Targeting
Offering 1
Action plan C1
Offering 3
Action plan C3
Offering 2
Action plan C2
The Three Dimensions of Customer Value
Functional
value
Customer
value
Monetary
value
Psychological
value
© 2006 Alexander Chernev
Competitive Advantage: A Source of Customer Value
Irrelevant
attributes
Irrelevant
attributes
Strengths
Competitive
advantage
Weaknesses
Shared
attributes
Offering A
Strengths
Weaknesses
Competitive
parity
Shared
attributes
Offering B
The Concept of Economic Value Analysis
Functional
value
Customer
value
Monetary
value
Psychological
value
Monetizing
functional value
Monetizing
psychological value
Economic Value as a Function of the Differences in Total Costs
Difference in
total cost
Cost of
ownership
Cost of
ownership
Difference in
price
Price
Price
Offering X
Offering Y
Attribute-Value Map
Customer
value
Company’s offering
k
j
Competitive offering A
Competitive offering B
l
j Competitive advantage
k Competitive parity
l Competitive disadvantage
Attribute 1 Attribute 2 Attribute 3 Attribute 4 Attribute 5
Positioning Map
Attribute 1
• Offering A
• Offering B
• Offering C
Attribute 2
• Offering D
• Offering E
The Three Dimensions of Company Value
Monetary
value
Customer
value
Functional
value
Psychological
value
Creating Company Value: Profit-Growth Analysis
Volume
Revenues
Price
Net income
COGS
Costs
Marketing
Other
New
Customers
Current
customers
New to the
category
Competitors’
customers
Strategies for Managing Sales Growth
Customers new to
the category
Sales volume
Competitors’
customers
Current customers
Managing
adoption
Managing
usage
The SWOT Framework
Favorable
factors
Unfavorable
factors
Internal
factors
Strengths
Weaknesses
External
factors
Opportunities
Threats
Company
analysis
Market
analysis
Product-Market Growth Matrix
Current customers New customers
Current
products
Market
penetration
Market
development
New
products
Product
development
Diversification
Conflicts in Vertical Collaboration
Manufacturer
Distributor
Manufacturer
Distributor B
Distributor A
Customer
Customer
Vertical channel conflict
Horizontal channel conflict
Conflicts in Horizontal Collaboration
Company
Collaborator
Customer
Steal-Share Strategy
Current users
Market-Growth Strategy
Current users
New users
Market-Growth Strategy for a Superior Offering
Current users
New users
Market-Innovation Strategy
Current users
New users
Current market
New market
Defensive Marketing Strategies
Custome
r costs
Move
upscale
Do
nothin
g
Move
downscale
Launch
economy
offering
Launch
premium
offering
Increas
e
benefits
Reduce
costs
Customer
benefits
The Five Forces of Competition
New entrants
3
Suppliers
1
Competitors
5
4
Substitutes
2
Buyers
1 – Bargaining power of suppliers
2 – Bargaining power of buyers
3 – Threat of new entrants
4 – Threat of substitutes
5 – Rivalry among extant competitors
Product/Service Management as a Value-Creation Process
Company
value
Product
Service
Customer
value
OV
P
Collaborator
value
Context
Product
Service
Company
value
Customer
value
OVP
Collaborator
value
Context
Managing Products by Streamlining the Marketing Mix
Price
Brand
Service
Incentives
Product
Communication
Distribution
Price
Brand
Service
Product
Distribution
Incentives
Communication
Branding as a Value-Creation Process
Company
value
Customer
value
OV
P
Brand
Collaborator
value
Context
Company
value
Brand
Customer
value
OVP
Collaborator
value
Context
Managing Brands by Streamlining the Marketing Mix
Incentives
Service
Product
Distribution
Brand
Communication
Price
Service
Product
Incentives
Brand
Price
Distribution
Communication
Pricing as a Value-Creation Process
Company
value
Customer
value
OV
P
Price
Collaborator
value
Context
Company
value
Price
Customer
value
OVP
Collaborator
value
Context
Managing Price by Streamlining the Marketing Mix
Incentives
Brand
Product
Distribution
Price
Service
Communication
Incentives
Brand
Product
Price
Service
Distribution
Communication
Managing Incentives as a Value-Creation Process
Company
value
Customer
value
OV
P
Incentives
Collaborator
value
Context
Company
value
Incentives
Customer
value
OVP
Collaborator
value
Context
Managing Incentives by Streamlining the Marketing Mix
Brand
Service
Product
Distribution
Incentives
Communication
Price
Brand
Service
Product
Incentives
Price
Distribution
Communication
Pull and Push Promotion Strategies
Push strategy
Pull strategy
Manufacturer
Manufacturer
Demand
Incentives
Communications
Retailer
Demand
Incentives
Communications
Customer
Demand
Retailer
Demand
Customer
Incentives
Communications
Communications as a Value-Creation Process
Company
value
Communication
Customer
value
OV
P
Collaborator
value
Context
Communication
Company
value
Customer
value
OVP
Collaborator
value
Context
Managing Communications by Streamlining the Marketing Mix
Brand
Service
Communication
Product
Distribution
Incentives
Price
Brand
Service
Product
Communication
Price
Distribution
Incentives
Planning a Communication Campaign
Goal
Message
Media
Creative solution
Implementation
Control
Distribution as a Value-Creation Process
Company
value
Customer
value
OV
P
Distribution
Collaborator
value
Context
Company
value
Distribution
Customer
value
OVP
Collaborator
value
Context
Managing Distribution by Streamlining the Marketing Mix
Brand
Service
Product
Incentives
Distribution
Communication
Price
Brand
Service
Product
Distribution
Price
Incentives
Communication
Distribution Channel Structure
Company
Wholesaler
Customer
Direct channel
Retailer
Retailer
Customer
Customer
Indirect channels
Hybrid channel
Managing Sales Growth
New
customers
Managing
adoption
Current
customers
Managing
usage
Managing
Sales Growth
The Adoption Funnel
Awareness
Understanding
Attractiveness
Affordability
Availability
Purchase intent
Purchase
Identifying Adoption Gaps
j
All target
customers
k
Aware of
the
offering’s
existence
l
m
Understand Perceive the
the offering’s offering to be
benefits
attractive
n
Can
afford the
offering
Have
access to
the offering
o
p
Intend to
purchase
the offering
Purchased
the offering
Identifying Actionable Goals
Offering
attractiveness
Usage frequency
Consumption
quantity
Usage quantity
Replacement
frequency
Offering availability
Identifying Consumption Gaps
Satisfaction
Usage
frequency
Usage
quantity
Replacement
frequency
Availability
The Typical S-Shaped Pattern of New Product Adoption
Total
adoptions
Number of
adoptions
Speed of diffusion
Inflection
point
Market
potential
Time
Time
Managing the Product Life Cycle
Sales
Introduction
Market size
Growth
Maturity
Decline
Time
Small
Moderate
Large
Moderate/Small
Market growth
Low
High
Low
Negative
Competition
Low
Moderate
High
Moderate/Low
Extending Product Life Cycle through Innovation
Sales
revenues
Third generation
Second generation
First generation
Time
Rogers’ Model of Adoption of Innovation
Number of
adoptions
2.5%
Innovators
13.5%
Early
adopters
(x-2SD)
34%
Late
majority
34%
Early
majority
(x-SD)
(x)
16%
Laggards
(x+SD)
Time
Moore’s Technology Adoption Model
Number of
adoptions
The chasm
Enthusiasts
Visionaries
Early market
Pragmatists
Conservatives
Skeptics
Mainstream market
Time
Vertical Extensions
Price
Upscale
offering
Downscale
offering
Benefits
Horizontal Extensions
Price
Offering A
Offering B
Benefits
Managing Product-Line Cannibalization
Existing
offering
s
Existing
offerings
Existing
offerings
Loss of share due
to cannibalization
New
offering
Competitive
offerings
Single-offering
scenario
Competitive
offerings
Dual-offering scenario
with cannibalization
New
offering
Competitive
offerings
Dual-offering scenario
with cannibalization
The Fighting-Brand Strategy
Price
Quality
Incumbent
brand
Low-price
competitors
Fighting brand
Time
The Sandwich Strategy
Price
Quality
Incumbent
brand
Premium brand
Low-price
competitors
Fighting brand
Time
The Good-Better-Best Strategy
Price
Quality
Incumbent
brand
Best
Better
Low-price
competitors
Good
Time
The Typical S-Shaped Pattern of New Product Adoption
Cumulative
number of
adoptions
Speed of diffusion
Inflection
point
Market
potential
Time
The Typical Bell-Shaped Pattern of New Product Adoption
Number of
adoptions
Time
Extra Figures and Graphs
© 2012 Alexander Chernev
Strategic and Tactical Targeting

Strategic targeting involves deciding which segments
to serve and which to ignore
Segmentation

Targeting
Tactical targeting involves identifying the profile of
the already selected target customers
Segmentation
Targeting
(strategic)
Targeting
(tactical)
Identification
(communication)
(distribution)
Developing a Value Proposition and Positioning
Benefits
Segmentation
Group customers
into need-based
segments
Targeting
Value proposition
Select target segments Create a relevant
and identify means to value proposition
reach these segments
Costs
Primary
benefit
Positioning
Identify the primary
benefit of the offering