Transcript Document

ENT 422, Lecture 7
The Critical Role of
Marketing
The Marketing Tool Kit
We live in a world of unprecedented
technological innovation
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But we also know:
- 80+% of New Ventures Fail
- Intrapreneurship within corporations has
mixed results
So technology innovation is critical but
insufficient.
Timmons suggests that critical enablers
for technology include:
Adding significant customer value
 Solving a significant problem at a premium price
 The result: robust margins for stakeholders and
reinvest in technology
 Management experience is critical
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David Hewlett & Bill Packard founded a
dynasty.
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They combined superior engineering with world
class principles & practices, “The HP Way”
-Focus
-Empowered Employees
- MBO
- Added value… “don’t attack a fortified hill”
- Participating decisions
Company Core Competence
4Ps + $
Customer Deliverables
Corporate Advantage
Implementation Plan
Customer Scenario
Competitive Vulnerability
The Company - Marketing Tool Kit
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Is the company’s strategic plan customer focused on
customer loyalty/retention (vs EPS, margin, cycle time,
other internal measures…)?
Does the company have a balance between its
competitive focus and the critical need for alliances?
Does the company focus on functional activities or on
integrated processes that utilize a supply/chain
approach to the efficient delivery of products/services
to the customer?
The Company - Marketing Tool Kit
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Does the company constantly update and renew its
customer knowledge and experience base as a critical
planning tool?
Are relationships with customers, suppliers, employees
cherished?
Dr. Demming: “Does the firm demonstrate constancy
of purpose?
Is the company focused on its’ core competencies, their
renewal, and use to dominate markets (niches)?
The Company - Marketing Tool Kit
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Is the Company on the cutting edge of using internet
technology to assess customer needs and adapt to new
channels?
Is the company a leader in ethical behavior? Does it set
a high standard for its employees, vendors and does it
respond to customer issues?
The Customer - Marketing Tool Kit
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Is delighting the customer the top priority of the
organization?
Does the organization have a comprehensive Marketing
Information System (MIS) to integrate critical
marketing data and track changes?
Does the company have a closed loop customer
satisfaction process to monitor customer delight, make
it easy for customers to complain and assure that
individual customer complaints are promptly resolved
and the root causes of the complaints addressed?
The Customer - Marketing Tool Kit
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Are all customers viewed as important to the company,
or just large customers?
Are customers invited into the process of determining
their needs?
What is the ratio of resources committed to
understanding the needs of customers versus the
resources spent on product/service development?
Does the company have a good understanding of the
threats and opportunities posed by the internet?
The Competition - Marketing Tool Kit
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The best competitive strategy maybe to focus on your
customer’s true needs and eliminate competition
(Ohmae).
Strategic alliances can be a powerful competitive
strategy….. “my friend is the enemy of my enemy”.
Continuously assess vulnerabilities…. yours and your
competitors.
The most effective competitive strategies can be the
result of “out of the box” thinking.
Attack your competitor when you have a major
competitive advantage and their ability to respond is
impaired.
The Competition - Marketing Tool Kit
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Product / service differentiation and cost leadership
can be critical elements of a balanced competitive
strategy.
Millions of years of evolution have prepared us to fight
our competition, but alliances may become more
critical in the new millennium.
Porter’s classic assessment tools/process focus on
- The five forces of competition
- The three generic strategies
- The framework for competitive analysis
Product Strategy - Marketing Tool Kit
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Corporate Strategy drives the development of
product/service strategies. Examples: General Electric…
goal: dominate global markets. H&R
Block…..goal: friendly, convenient, affordable service for
small businesses and individuals.
Market research is a critical tool for evaluating and ranking
alternative concepts including the differentiation between
basic, discriminating and energizing attributes.
Products/Services are intertwined with pricing, promotion,
place and customer service. The customer integrates all of
this information to assess the value derived from the entire
package.
Product Strategy - Marketing Tool Kit
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Homogenous market segments are the basic building
blocks for product development. Must understand the
customer requirements at the segment level, e.g.
Colgate Palmolive Case….
Product service and customer support are critical
elements of the product package.
“A product or service is a thing. A brand is a promise
to a customer based on consumer trust in the
brand.”….. David Oleson, Sr. VP, Starbucks
Pricing - Marketing Tool Kit
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Price = f (3C’s)
Price discrimination exists and can be driven by
marketing strategies
The “right price” established a clear value for the
customer while meeting the objectives of the company
Right price a reflection of the marketing mix
Pricing decisions should be based on future incremental
cost / revenue…. sunk costs are just that….sunk
Marketing Communications
(“Promotion”) - Marketing Tool Kit
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Marketing Communications is more than
advertising It is a mix
Clearly define the target audience / market segment
What is the market message….The Unique Selling
Proposition
The message must be believable
Distribution Channels Marketing Tool Kit
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Marketing Distribution Channels are
systems/processes, which efficiently makes goods and
services available to customers in a way that meets their
requirements and provides a sustainable competitive
advantage.
Bucklin: a competitive advantage accrues to those
channel members that reduce the consumers’ search,
waiting time, storage and other costs.
Channels are dynamic and change in response to
economic conditions, customer buying patterns, and
macro-environmental factors.
Distribution Channels Marketing Tool Kit
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Channel management is the implementation of
strategies to achieve high-performance channel
relationships.
Channel conflict results from unclear objectives and
undifferentiated products/services and resultant
competition between channel members.
Direct selling is the channel of preference where the
customers require information / on-going customer
support.
Managing Service Businesses Marketing Tool Kit
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Insufficient time is spent in determining customer
requirements
In service businesses the “marketer” and the
“deliverer” of the service can be the same person
This person, the employee, is critical to achieving
customer delight
Resolving issues/complaints is critical to good
customer relations.
Managing Service Businesses Marketing Tool Kit
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Managing expectations can assist in meeting or
exceeding a customers requirements
Service industries are a major growth factor in our
(new) economy
Employee satisfaction a critical component of
customer service…behind many dissatisfied customers
are dissatisfied employees.
Smartdesk Incorporated
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Assist profoundly handicapped to live a fuller life
Critical business questions:
- How large is the market?
- How will customers pay for the product?
- What is the channel of distribution?
Prevent ACL, Inc.
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Innovative training system to reduce ACL
Critical business questions:
- What is the cost today to treat ACL vs the
proposed system?
- How do we create market awareness?
- Push
- Pull
- Do we form our own sales organization or
partner with a sports medicine company?
Possible Future Modules
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Estimating market demand.
Customer perceived value…The key to pricing.
Building Awareness…promotion.
Distribution Channels for competitive advantage.