Transcript Marketing Strategy Statement

Strategic Marketing for Technology
Products and Services
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What is Strategic Thinking?
"Individual strategic thinking involves the application of
experience-based judgement to determine future directions".
"Strategic thinking incorporates values, mission, vision and strategy
which tend to be intuitive--feeling based rather than analytical
elements."
George Morrisey. A Guide to Strategic Thinking.
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The What and the How
"The starting point for strategic thinking is a CEO's vision of today
and of the future. Strategic thinking is the type of thinking that
attempts to determine what the organization should look like.
In other words, the strategy."
"Operation planning, or strategic planning is the type of thinking
that helps us choose how to get there."
Michel Robert, Strategy II: Pure & Simple.
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Who owns strategy?
Executives provide Business Strategy
What is the What?
Marketing Strategy is an operational strategy or
functional strategy
How are we going to do the What?
Everyone is a stakeholder
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Why you need to own strategy?
Corporate Stakeholder
Personal Investment
•Market Leadership
•Competition
•Alignment
•Speed
You add to your own value or
brand equity when you know
how to think strategically.
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Technology Marketing vs. Consumer Marketing
Technology
Consumer
Market creation & leadership
Market share mentality
Focus on education
Speed
Emphasis on advertising
and promotion
Intuition
Focus on event marketing
Dealing with FUD
Stable markets
Discontinuous innovations
Continuous improvements
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Discontinuous vs. Continuous Innovations
Examples of Discontinuous Innovations
Communications
Software
Video conferencing
Object oriented databases
Digital Cellular phones
Java
Internet
Windows
High Tech marketing specializes in discontinuous innovations
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Why Discontinuous Innovations are
Hard to Market
• Fear, uncertainty and doubt (FUD)
• No established solutions
• No existing infrastructure for support
• High risk buying decision
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Qualitative Models & Tools for
Technology Marketing
• Environmental Audit
• SWOT
• Scan, Focus, Act
• The Quintessential Planning Model
• Chasm Model
• Strategy Statement
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Environmental Audit
History
Technology
Competition
Product
or
Service
Economic Trends
Social Trends
Market Dynamics
Present Position
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Exercise: E-Commerce
What are the business drivers or market dynamics affecting you
today?
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Exercise: World Wide Web
Write down the key business drivers influencing the "tornado"
growth of 1995 to present.
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SWOT Analysis
Strength
Weakness
Opportunities
Threats
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Scan, Focus, Act
Scan
Explore ideas far outside your usual range of expertise.
Expand time horizons, work with complex systems models,
learn rapid information -gathering techniques.
Focus
Formulate performance specs for the optimal solution to
your problem. Generate options for what the problem really
is, and how it will be solved. Range for no-risk to wacky.
Come at problem many different times at different angles.
Act
Strategy is turned into tactics, and tactics into actions
steps which include target dates of completion.
Source: Scan Focus Act Model
MGTaylor Corporation
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Chasm Model
Stages of the Technology Life Cycle
5. On Main Street
4. Inside the
Tornado
1. The Early
Market
3. The Bowling
Alley
6. End of Life
2. The Chasm
Source: © 1995 Geoffrey Moore. The Chasm Group
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Marketing Strategy Statement
•
•
•
•
•
•
•
•
•
Target Customer
Compelling reason to buy
Whole Product
Partner and allies
Whole Product Pricing
Whole Product Distribution
Competition
Positioning
Next Target
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Result: The Technology Adoption Life Cycle
Early Majority
Innovators Early
Adopters
Late Majority
Laggards
Different types of people make buying decisions at different points
in the product’s life.
The technology adoption life cycle illustrates market acceptance of discontinuous
innovations.
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Stages of the Technology Life Cycle
5. On Main Street
4. Inside the
Tornado
1. The Early
Market
3. The Bowling
Alley
6. End of Life
2. The Chasm
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Stage 1: Early Market
1. The Early Market
• A time of great excitement
• Market strategy is deal driven
• Selling to visionaries and early adopters
• Product is still immature
• High level of customization
• Every deal is a “special”
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Stage 2: The Chasm
Chasm
Early Market
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•
•
•
•
Mainstream Market
A time of great despair
Have as many visionaries as one can handle
Can't take on more custom projects
No credible reference accounts for pragmatists
Wait and see lull
•
•
•
•
•
Extended sales cycles
Revenue growth ceases--often recedes
No customer base to supply new revenues
Ugly and painful...
Blood letting
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Stage 3: The Bowling Alley
Niche segments adopting before standard infrastructure
deploys
• Driven by problems unique to their segment
• Lack infrastructure to support the new paradigm
• Must have complete whole products
• Use customer references to determine viability
Market based on displacing status quo with new technology
• Value-added distribution channel
• Healthy price margins
• Restricted competition due to whole product barriers
• Positioning based on product leadership and customer intimacy
Examples: pagers, GIS software, visualization, document management
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Stage 4: Inside the Tornado
Transformation from niche to mass market
• Pragmatists shifting to new infrastructure
• Massive sales opportunity from influx of new customers
• Sets boundaries of installed base for life of paradigm
Fundamental Strategy: Just Ship!
• Simplify and standardize whole product
• Enable high-volume, distribution channels
• Drive price points down to gain additional market share
• Compete fiercely
• Ignore customer--positioning based on product leadership and
operational excellence
Examples: Inkjet printers, client server financials, hubs and routers
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Stage 5: On Main Street
Mass market stabilizes--infrastructure is broadly deployed
• Backlog of new customers has been drawn down
• Bulk of future business to come from your installed base
• Commodity prices continue to decline
• Niche offerings earn premium margins
Marketing strategy based on profitability:
• Mass-customization tactics serve niche cost-effectively
• Whole product + 1 offerings
• Abandon market-share battles
• Positioning based on operational excellence and customer intimacy
Examples: personal computers, relational databases
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Stage 6: End of Life
6. End of Life
Product is passing out of the market, being displaced by a
new category.
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Discovering the Chasm
Chasm
Early Market
Mainstream Market
No longer can stay in Early Market.
Cannot take on any more "specials"
Must develop repeatable business
Mainstream market not yet ready to adopt.
Nothing "in production"
No pragmatist references
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Chasm Candidates
Exercise: What are some of your Chasm candidates?
1.
2.
3.
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Crossing the Chasm:
The Challenge
Problem
Currently address 80% of many solutions—100% of none
What we were doing wrong
Working on the most common enhancement requests
Never finishing any one customer's wish-list
Solution
Focus on a single beachhead & whole product requirements
Pick a list and finish it!
Examples: Silicon Graphics, Apple, Sybase, Etak
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Crossing the Chasm:
The Process
Market Segment
+
Positioning
Capture
+
Target Customer
&
Compelling Reason to Buy
+
Whole
Product
Market Development Model
+
=
Chasm
Crossing!
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Marketing Strategy Statement
• Nine essential elements which collectively describe how you
will market your product.
• Market strategies change radically through the Technology
Life Cycle.
• This template is valid for all phases of the Technology Life
Cycle.
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Marketing Strategy Statement
Use this brief to:
• Include in a marketing plan or business plan
• Drive research efforts
• Orient marketing communications strategy
• Guide sales strategy development
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Marketing Strategy Statement
1. Target Customer
2. Compelling reason to buy
3. Whole Product
4. Partner and allies
5. Whole Product Pricing
6. Whole Product Distribution
7. Competition
8. Positioning
9. Next Target
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Example: Silicon Graphics Database Servers
Target Customer:
VP of Marketing of Telecommunications company
Compelling Reason to Buy:
Recruit new customers & mantain existingcustomers
Whole Product:
Server, database s/w, data mining apps, extract tools
Partner and Allies:
DB Vendors, data mining suppliers, system integrators
Distribution:
Direct sales force and value added partners
Pricing:
Value based pricing, high margins
Competition:
Other HW vendors server lines, SMP, MPP,
Positioning:
Big data problems need big servers.Visualization is
the key to time to insight
Next Target:
Consumer package goods companies
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1. Identify Target Customer
• Industry:
• Profession:
• Geography:
• Job Title:
• Age:
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1. Target Customer Profile
Day-in-the-Life Scenario
Target End User: Profession, industry, geography key responsibility
Before:
Scene or situation
Desired outcome
Attempted approach
Interfering factors
Economic consequences
After:
(Same scene)
(Scene desired outcome)
New approach
Enabling factors
Economic rewards
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1. Target Customer Profile
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2. Compelling Reason to Buy
Definition:
Provides a solution which adequately addresses business
conditions
Importance of customer
• makes my life/work easier
• improves quality/productivity of my work
• decreases cost of my operations
Source of Demand.
You have a competitive advantage because what you provide
is unique.
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2. Compelling Reason to Buy
Gee Whiz Factor
Preference
ROI
Infrastructure
The primary motivating factor of why a customer buys.
This factor can be tangible and intangible.
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3. Whole Product Model
Consulting
Complementary
Services
Post-sales
service
& support
Pre-sales
services
Hardware
Your
Product
Legacy
interfaces
Software
Peripherals
Complementary
Products
Connectivity
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3. Whole Product Exercise
Your
Product
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4. Partners and Allies
Recruit, Institutionalize, Eliminate
"Design them in... and then design them out."
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5. Distribution
Direct Missionary
Selling
Value Added, High Volume, Low cost
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6. Pricing
In the Bowling Alley, pricing is value based
against the status quo.
In the Tornado, pricing is competitionbased against the market leader.
On Mainstreet, pricing is competitionbased against the low-cost clone.
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7. Competition
In the Bowling Alley, compete against the
Status Quo. (The old paradigm)
In the Tornado,compete against the
Market Leader.
On Mainstreet, compete against the lowcost clone.
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8. Positioning
Prospective Customers
Press
Analysts
Luminaries/Industry Analysts
Distribution Channels
Solution Partners
Customers
Field Sales
Infrastructure
Model
Your
Co.
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8. Positioning Statement Template
For:
[target customers]
Who:
[have the following problem]
Our product is a:
[new product category]
That provides:
[breakthrough capability]
Unlike:
[reference competitor]
Our product:
[key point of differentiation]
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Example: Norton AntiVirus/Symantec AntiVirus
• For anyone who owns, uses or manages personal computers for
work or pleasure
• Who is concerned about protecting their information from the
ever-growing virus threat
• Symantec provides virus protection software that
automatically updates as often as you wish
• Unlike McAfee VirusScan, Symantec is committed
to keeping customers' virus protection
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Example: Silicon Graphics
For movie producers and others who depend heavily on
post-production special effects, Silicon Graphics provides computer
workstations that integrate digital fantasies with actual film footage.
Unlike any other vendor or computer workstations, SGI has made
a no-compromise commitment to meeting film makers
post-production needs.
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Positioning Statement Exercise
For
Who
______________________________.
______________________________.
Unlike
______________________________.
______________________________.
______________________________,
Our product
______________________________.
Our product is a
That provides
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From Positioning Statement to Messages
Message Architecture
1. Message = [have the following problem] = customer centric
2. Message [new product category] = customer centric
3. Message [breakthrough or significant capability] = product centric
4. Message [key point of differentiation] = key message
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9. Next Target
(In Bowling Alley)
• Identify a segment you can dominate
• Win market share leadership in that segment
• Leverage leadership to win over adjacent segments
Point of Attack
Until the pragmatist majority moves to the new infrastructure,
this is the only way to develop markets around discontinuous
innovations.
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9. Next Target
In the Bowling Alley, next target is the
adjacent bowling pin.
In the Tornado, next target is more new
customers.
On Mainstreet, next target is more sales
for installed base.
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Priorities Change Over the Life Cycle
Chasm
Bowling Alley
Target Customer
|
|
|
Compelling Reason to Buy
|
|
|
Whole Product
|
|
|
Partners and Allies
|
|
|
Tornado
Distribution
|
Pricing
|
Competition
|
Positioning
Market Development
|
Main Street
|
|
|
|
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Summary
• Strategic thinking is process which is intuitive and developed
over time...(The more you do it...the better you become).
• Strategic thinking is critical in technology markets because of
discontinuous innovation, speed and competition.
• Qualitative models/tools to jumpstart your thinking process.
• Strategic thinking is critical to your success & value within your
organization.
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Best Practices from Silicon Valley:
Marketing Process, Planning & Strategy
Stanford Professional Workshops
Fall, 1999
1
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Strategy Statement Created Within a Business
Development Opportunity
Silicon Graphics
A team of five product marketing managers uses a strategy
statement to plan for a "lighthouse" customer visit. The nine
essential elements of the statement focus the team's thinking
around the target customer profile and whole product offering.
Sales Results: Award of a $5 Million account; lighthouse
customer results in leading AGD market segmentation model
down "beachead" opportunity; $$$
Long-term Marketing Benefit: Power tool for account planning
& market segmentation
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Market Education
Hewlett Parkard
"All roads lead to marketing" during the course of a career at HP.
It is understood that the engineering mind needs to learn key
marketing principles which extend beyond the product: value
proposition, market segments, Chasm, positioning, and more.
Action: Extensive in-house market education; multiple course
offerings throughout the year
Result: Common vocabulary during product launch and program
planning and execution
Benefit: Time- and cost-efficient launch planning and execution
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Business Strategy Summary
Hewlett Packard
Through this 10-step strategy building process, the
Outsourcing Business Unit of HP aligns its business strategy
to support the Corporate Business Strategy. Cross-functional
teams meet over a 4-6 week period to develop and build a
business strategy.
Result: All stakeholders are brought into Business Unit
Strategy.
Benefit: With an understanding of the business unit strategy,
functional strategy such as Marketing can proceed more
smoothly
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Corporate Marketing Summit, Integrated
Marketing Inititatives
Cisco Systems
The corporate marketing department hosts a two-day offsite
for all functional managers and business unit marketing
program managers. The objective of offsite is to enable
cross-business-unit opportunities and awareness. Each
business unit presents its initiatives, program strategy and
budget to the entire gathering.
Result: Integrated marketing programs across the company
Benefit: Leveraged budgets and schedules
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MarCom Planning & Budgeting
Cisco Systems
MarCom planning begins at the end of Q4, with a rigorous
individual process for each MarCom manager. Individual
objectives are clarified and structured through use of a
standardized process: each MarCom manager is supplied with a
plan template and pre-formatted spreadsheets in order to expedite
his or her work with business unit counterparts.
Result: Uniform reports for the Director of MarCom
Benefit: Less painful budgeting season
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Brand Planning & Management
Apple Computer and Cisco Systems
These market leaders have one thing in common:
Powerhouse brands. Within each company a proactive
brand strategy is played out.
Apple Computer's primary brand adovcate comes from the
top—Steve Jobs. Say no more...
Cisco's brand management team is small relative to the
number of companies it acquires each year. The brand
strategy is to promote and build "master" brand "Cisco," and
construct descriptive naming conventions for its products.
Result: Brand loyalty, which builds brand equity
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Co-Marketing Planning Offsite
Oracle/Silicon Graphics Alliance
The alliance develops a "Champ" Partner Plan to "maximize
return on investment for the customer, while maximizing the
mind/market share ROI for the partnership." Planning session
and process is conducted by the Sales Consultancy.
Contents of the plan include revenue forecast, goal and
summary of objectives, strategy and summary of actions,
summary of resources and critical sucess factors.
Results: Partner agreement and executable action plan
Benefits: Sales and account focused; deals and alliances
easily measured
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Working Strategy Session
Silicon Graphics Symantec
With a facilitator, cross-functional groups conduct in-depth
analysis using qualitative models. The conclusions are used
to identify the target customer, compelling reason to buy,
partners and allies, whole product pricing and distribution,
competition, position, and next target segment—the essential
strategic framework for effective marketing.
Results: Team-building occurs within strategy effort;
stakeholders "buy in"
Benefit: Better program execution
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Quarterly Program Review
Silicon Graphics
Quarterly "shoot out" in which all active projects and programs
are intensively cross examized for near-term sales results
(6-month focus). Needs assessment and lots of interation with
the field. Field tools are built in order to reap short-term sales
gains.
Results: Sales pull; no lingering projects
Benefit: Corporate marketing managers gain field awareness
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Critical Thinking & Precision Questioning
Intel and Microsoft
Having the right answers means asking the right questions.
And the right questions result from disciplined, analytical
thinking, problem-solving, decision-making, conceptual
analysis, and information gathering. Both Intel and Microsoft
hold a rigorous precision questioning process at the beginning
of most meetings in order to determine whose attendance is
essential and what critical information each attendee might
supply.
Result: The right answers through the right questions
Benefits: Executable results; shorter meetings with key
players only
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Research & Measurement
Cisco Systems and Hewlett Packard
Doing your homework means conducting quantitative
research and market sizing before a product launch: quantify
what you got out of a previous program; measure the success
or failure of a MarCom program—direct mail, web site, ad
campaign, seminar.
Result: Funding intelligence for future programs and products
Benefit: Improved time- and cost-efficiency for future
programs
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Day-in-the-Life: Customer Scenario Building
(1)
Identify target customer:
profession, industry, geography
key responsibility
(2)
Xerox Parc (think tank for paperless
electronic products—a unique mix of
scientists, engineers, writers and
anthropologists)
Build "before" scenario or situation:
attempted approach for desired outcome, interfering
factors, economic consequences
(3)
Build "after" scenario (desired outcome of "before" situation):
new approach, enabling factors, economic rewards
Result: Creative brainstorming produced 15 customer scenarios
Benefit: Better product fit and acceptance
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Planning Model: Imperatives, Initatives & Priorites
Kellogg's and Anderson & Lemke
Vision:
Super Imperatives:
Major Initiatives:
Products:
Markets:
Priorities:
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Business Unit Strategy & Product Planning
Sun MicroSystems
Two committees of Sun's Consumer Systems Division meet
biweekly: Business and Product Comm. & Operations. Each
quarter they present and update strategy, taking into
consideration goals, product roadmaps, competition, and
marketplace.
Tools: product proposal, product approval, target FCS,
product features
Results: Infrastructure in place with self-correcting
mechanisms; mgt keeps people on track, owners know what
is expected
Benefit: Everybody's happy!
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A Guide to your Strategy Statement
Focus Changes
through Lifecycle
1. Target Customer
Vertical Market
Economic Buyer
Mass Market
Technical Buyer
Mass Customization
End User
2. Compelling
Reason to Buy
ROI
Infrastructure
Preference
3. Whole Product
Complete
Standard
Commodity +1
4. Partner & Allies
Recruit
Institutionalize
Eliminate
5. Distribution
Value added
High
-volume
Low-cost
6. Pricing
Value
-based
vs. status quo
Competition based
vs. market leader
Competition
- based
vs. low -cost clone
7. Competition
Status Quo
Market Leader
Low-cost clone
8. Positioning
Product leadership
&
customer intimacy
Operational
excellence or
Customer intimacy
9. Next Target
Adjacent bowling
pin
Product leadership
&
Operational
excellence
More new
customers
More sales from
installed base
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Exercise One: Life Cycle Placement
For each of the following technologies, determine where in the Technology
Adoption Life Cycle it is. Use the attached worksheet as a guide.
Product
Anti Virus Software
E commerce (generic)
The Internet (for college professors)
Client/Server Business financial applications
Video conferencing & desktop collaborative tools
DVD
Personal Digital Assistants (e.g. Pilot, U.S . Robotics)
Relational databases
Mainframe computers
WebTV
The Intranet
Electronic Books
Life Cycle Placement (1- 6)
_______
_______
_______
_______
_______
_______
_______
_______
_______
_______
_______
_______
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Bibliography
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1996)
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1991)
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(updated 10.98)
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