Transcript Innovation

L10 Customer Management
EC10: Innovation & Commercialisation
What it takes to build a successful Venture Team
Marcus Thompson
[email protected]
Outline
 Targeting
 Communications
 Branding
 Performance
Management
L1: Team Building
1. Targeting
EC10 Innovation &
Commercialisation
Assessing Emerging Opportunities
Information
Market Characteristics
Product Characteristics
Buyer Characteristics
Process is interactive – each
cycle refines the opportunity
Analysis
Synthesis
Critical relationships
Key Success Factors
Refine Critical
relationships
Wickham, Strategic Marketing, Pitman, p158, 1998
New Opportunity
Revenue
Marketing is about
having different
revenue streams.
(FBDS is about adding revenue streams!)
1. Advertising Media
Shows – public/buyers
Periodicals – local national & international
Television & Radio – Heartland FM
Leaflets
Posters & Signs
Point of Sale Material – car stickers
Direct Mail – letters & inserts
Electronic media – PDF & HTM format
– E-zines
Web Pages & transaction site
Measuring Advertising
The Reach
– The number of the target audience who are expected
to receive the message.
Frequency
– The number of times the audience will be exposed to
the message.
Recency
– When and how often contact is made.
Impact
– Compatibility between the medium and the message.
Continuity
Source: International Marketing, p 315, Paliwoda, CIM 1993
– Length of time of the campaign and its timing
2. Public Relations
“The deliberate, planned and sustained effort to establish
and maintain understanding between an organisation
and its publics”
Concerned more with image than the company identity.
Publics include; employees, consumers, suppliers,
financial backers, opinion formers, local community and
customers.
Activities include press releases, feature articles,
photographs broadcast interviews.
Used in sponsorship, audio-visual presentations,
exhibitions, conferences, special events, direct
marketing, corporate events.
PR success is based on good copy and can only be
done by a skilled professional i.e. journalist.
3. Sales Promotions
A range of tactical marketing techniques
designed and placed within a strategic
framework to add value to a product or service
in order to achieve specific sales and marketing
objectives. (American Marketing Association,1998)
Sales promotions involves incentives &
objectives to encourage consumers or trade
customers to purchase a brand sooner, in larger
quantities or more frequently. (Spethmann 2001)
Can be viewed as an acceleration tool.(Neslin
1984)
3. Sales Promotions
Point of Sales (POS), Advertising and Displays
Specialty Advertising & Give-aways
Special Offers & Selective Discounting
Competitions
Source: International Marketing, Paliwoda,
p314, CIM 1993
Co-operative advertising
Specials for Trade Shows, Exhibitions & Demos
Directories & Yellow Pages
Internet - Web, Electronic Marketing & Newsgroups
Trade Incentives - Buyer discounts,
Sales Promotions Examples
Premiums – discounting through coupons, free items
(BOGOF), Give-aways (pens, calendars etc.)
Incentives – higher priced products through contests,
rebates and loyalty bonuses
Product samples – free trial or taster
Promotional Tie-ins – arrangements between producers
or between producer and retailer.
Visual Displays – stimulate in-store purchases
Loyalty Reward Schemes
Sales Promotions Strategies
Communication
– While advertising builds the value proposition eg a product has
changed or improved, sales promotions puts the product into the
purchasers view so they can judge the advertising claim ie grab
attention
Incentive
– Giving a buyer the incentive to behave in a certain way, by
agreement, which leads to a reward. Often aimed at switching
brands or fortifying loyalty against new entrant,
Invitation
– Make the consumer consider the product and buy it in a short
space of time. Based on urgency
Channel of Distribution
The channel determines the amount of control
you have over promotions
Channel is the path that a product takes from
producer to final user.
– Direct when you, the producer, sells to the customer.
– Indirect when it involves more than one intermediary
e.g. co-operative farm shop.
– The producer supplies an intermediary who is
responsible for the sales transactions that move the
product. (they own the customer)
– Classified by whether they have title to goods
Retailers, Agents, Distributors, Producer Organisations
Channel Evaluation
Direct Selling
– For - highest margin, control over selling proposition to customer,
opportunity to cross-sell.
– Against – Expensive to capture customers. Difficult to retain.
High promotions cost. Securing payment.
Intermediaries
– For – Concentrate on core business of producing. No
transaction costs. Limited risk of bad debt (sic). No investment in
location or infrastructure.
– Against – Producer is distant from customer & trends. Producer
has no control over seasonal buying patterns. Subject to price
sensitive negotiations.
Channel Options
Neither is better and every producer should
have a mix of channels available to crate a
competitive and sustainable business model.
This will allow best profit today to be set against
the ability to control the growth of the business.
The are two distinct sales channels
– Business to Business (b2b)
– Business to Consumer (b2c)
There are two value propositions
– High value, low volume
– High volume, low value
2. Communications
 Communicating
is one of the most
important tools in recovering from
mistakes. When you tell someone, be
it a designer, a customer, or the CEO
of the company, "Look, we've got a
problem. Here's how we're going to
fix it," you diffuse the fear of the
unknown and focus on the solution.'
 Michael Dell
Communications
 How
to sell more profitably, to
the right people by using the
best means (channel) to
persuade them.

Communications assumes you already
know who you want to sell to, how you
can do it profitably and why customers
should buy from you rather than someone
else.
The Promotions Challenge for New
Technology Businesses
“I don’t know who you are.
I don’t know where you are.
I don’t know what you sell.
I don’t know what’s special about what you do.
I don’t know how good your reputation is.
Remind me - what was it you wanted to
sell me?”
Effective Communications
“The transmission of a chosen message
through any form of media to an
identifiable target audience.”
Source: Paliwood,1993
International Marketing, CIM,
p317
Sender
Noise
Message
Channel
Feedback
Receiver
Promotions


Any form of communications that is
used to inform, persuade or remind
people of a product and its
characteristics.
Promotions Mix includes:
1.
2.
3.
4.
Advertising
Public Relations
Personal Selling
Sales Promotions
Organisational Responsibility for
Marketing
In a manufacturing company people in the lab and supply partners
who make the product may not the
same people who sell the product to the
customer, or who convince the
customer to buy.
 But in a service company, the same
people who deliver the service, are the
same people selling the service

– ie. web designers, research technicians,
Internal Marketing
 “selling”
your employees and
strategic partners on the purpose of
what you are doing
 convincing stakeholders to try their
best and make them enthusiastic
about serving the customer
Managing Evidence
the process of using some tangible cues
and hints to help the customer understand
the benefits of what you are selling
 the physical environment in which the
service is sold

– If you want people to think your technology is
a world beater make sure it looks expensive
and is presented carefully

Pricing - charging a high price always
makes people think they are getting a
good deal
3. Branding
What is a Brand?
A brand is a name, term, sign, symbol, design or
combination, which is used to identify the goods or
services of one seller and differentiate them from
those of the competition. (Dibbs 2001)
Its aim is to encourage differentiation from the
competition to encourage customer loyalty.
This can include:
Appealing to different market segments
Capturing those consumers who like to switch brands
Gaining more exposure in the media
Offer internal focus and clarity within a business (embedded shared
values.)
Brand Loyalty
Loyalty “is a strongly motivated and long standing
decision to purchase a particular product or service
(Dibb et al, 2001, p271).
A brand can attract & retain customers by
promoting value, image, prestige and lifestyle
values.
It has six meanings:
Attributes
Benefits
Values
Personality
Cultural Fit
User
Three Levels of Awareness
Recognition.
Aware that a brand exists and views it is an
alternative to purchase if the preferred brand is
unavailable
Preference.
Prefers one brand to another. If chosen brand is
unavailable then consumer chooses a substitute brand.
Insistence.
The customer will only ever purchase the one kind of
brand and is willing to spend time and effort to acquire
that particular brand. (Miller 1998)
The Customer is King?
Customer Loyalty
High
Low
High
Customer
Satisfaction
Low
Satisfied
Stayers
Happy
Wonderers
Ideal but danger
of complacency
Seem happy but
not always loyal
Hostages
Dealers
Loyal but tied for
location, emotional or
psychological reasons
Not satisfied and
move brands for best
deals. To be avoided.
Piercy, 2002, p29
Market – Led
Strategic Change
Satisfaction Verses Loyalty
 Satisfaction is an Attitude
– How a customer feels about a company,
product or service
 Loyalty is a behaviour
– Do they come back and buy more.
 Most firms measure satisfaction (at point of
sales e.g., a new car.
Loyalty as Value
 Committed Loyalist
– Place high value and wiling to pay a premium.
 Feature Loyalist
– Place high value on particular features – may be Satisfied Stayers
or Hostages.
 Convenience loyalist
– Stick with it – Hostages e.g. bank?
 Channel Loyalist
– Places value on Channel e.g. likes Pepsi but eats at MacDonald's
so drinks coke.
 Lack of Choice
– No choice. e.g., employer buys computer.
 Price Loyalist
– Wants the best price for the performance (dealers)
Why Brands Work
 A strong brand commands higher price and higher
margins.
 A strong brand focuses consumers on specific points of
differentiation ranging from unique features to emotional,
image-orientated benefits. (Davis 2002)
BUT
 Brand equity requires continuous development,
investment, skillful advertising and excellent customer
service.
 It must be protected as part of the Intellectual Property of
the business.
 Independent businesses (can) sell provenance far better
than multi-nationals.
 Given a choice everyone wants to buy local fresh
produce.
Benefits of Brand Equity
 Reduced marketing costs because of high
customer awareness & loyalty.
 More leverage when negotiating with
suppliers, advertisers and punters.
 Charge higher prices than other areas.
 Opportunities for brand extensions.
 Defense against competition from other
areas.
Brand Issues







Ability to cope with local nuances
Making it unique
Brand naming
Brand ownership
Brand usage
Faithful reproduction
Adapted from Mazur & Hogg, The Marketing
Consistency
Challenge,, CIM, p123
Brand Audit
What is our product – its physical components
How do Consumers perceive it? Who are the competitors?
Who is the brand, its personality and the
message we use to express it?
Source: Modified
from LANNNON, The
Marketing Challenge,
CIM p146
Positioning Strategy
Attract new
customers
Reinforce for
existing
customers
Overcome prejudices/
to lapsed customers
Execution modified by local & cultural nuances
1. Where are
we now?
5. How we ensure
that we arrive?
2. Where do we
want to be?
3. How are we going
to get there?
4. Which is the
best way?
Adapated from Strategeic Marketing Mnagement, Wilson, Gilligan, Pearson, CIM Series p 4
What Next?
4. Performance Management
How to Kill Creativity
•
When leadership becomes dominance
When questioning becomes accusation
When assertiveness becomes aggression
When myopia becomes focus
When opportunities become problems
When arrogance becomes confidence
When structures become strictures
When inclusion becomes exclusion
When rules become constraints
When support becomes ownership
When capabilities become impediments
When habits become free-thinking
When experience becomes intolerance
When collaboration becomes fragmentation
When identity becomes an excuse