Transcript 5 piercy fourth ed

Market sensing and learning strategy:
Competitive strength through knowing
more
Lecture 5
A route-map for marketled strategic change
Part I
Customer value
imperatives
Part II
Developing a value-based
marketing strategy
The strategic pathway
Market sensing
and learning
strategy
The Customer
is always
right-handed
New
marketing
meets
old marketing
Value-based
marketing
strategy
Strategic
thinking and
thinking
strategically
Strategic
market choices
and targets
Customer value
strategy and
positioning
Strategic
relationships
and networks
Part III
Processes for managing
strategic transformation
Change strategy
Strategic
gaps
Organization
and processes
for change
Implementation
process and
internal
marketing
The strategic pathway
• Developing a value-based marketing strategy
– Market sensing and learning strategy
– Strategic market choices and targets
– Customer value strategy and positioning
– Strategic relationships and networks
The strategic pathway
Strategic thinking and
thinking strategically
Market
sensing
and
learning
strategy
Strategic
market
choices
and
targets
Customer
value
Strategic
strategy
relationships
and
and
positioning
networks
Strategic
transformation
and strategy
implementation
Agenda
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Understanding customers and markets
Black swans and white swans
From market research to market sensing
New cross-over tools for management understanding
Marketing intelligence
Interpretation
Lessons in learning
Enhancing sensing capabilities
Understanding customers and
markets
• Companies have little understanding of why their customers behave
the way they do
• Executives looks at averages and ignore market granularity
• Agile, fast-moving businesses show high knowledge-intensity
• The goal is to raise a company’s “Market IQ”
• Crunch question = what do you know that every rival does not also
know?
Black swans and white swans
• The black swan analogy underlines the limitations to our
learning and the fragility of our knowledge
• Black swan events are the “unknown unknowns”
• Market sensing demands open-minded inquiry and
experimentation not probabilistic estimates and sampling
From market research to market sensing
• What is the difference between market sensing and
marketing research?
– marketing research involves techniques of data
collection and processing
– market sensing is a process of management
understanding
Marketing research
versus market sensing
Sources of marketing knowledge
Internal records Management
information
CRM data
systems
Databases
Surveys
Observation
Market tests
Processes of management
understanding
Interpretation
Marketing
research
Market sensing
capabilities
Ethnography
Internet
Futurology
Cross-over
tools
Scanning
Trends
Clues
Marketing
intelligence
Market
understanding
From market research to market sensing
• Limitations of conventional market research
– unreasonable expectations
– the limits of questions
– the “right” results
– we don’t believe it
– excuses
From market research to market sensing
• The elephant in the market
• Strategic and non-strategic marketing information
Strategic and nonstrategic marketing
information
Importance of information
High
Low
High
Priorities
Short-term
dilemmas
Strategic
Time
wasters
Urgency of
information
Low
New cross-over tools for
management understanding
• Ethnography
– hidden in plain sight
– neuromarketing
• Internet sensing
– the wisdom of crowds
– blogs
– virtual reality
– social networks
New cross-over tools for
management understanding
• Futurology
– careful examination of what is going on around us
– scenario building – how things may unfold
– visioning – working out what is likely to happen and
what we want to happen
Marketing intelligence
• Trends and clues
– trendspotting
– new identity groups
– the quest for cool
– looking for clues
– deep mining
• But play nicely and don’t be naughty
• Managing customer knowledge
Interpretation
• Link between information, sensing and management
understanding relies on processes of interpretation
• Integration of multiple information sources central to
evidence-based management
• Goal is sustaining learning to create competitive
advantage
Lessons in learning
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Storytelling
Watching customers
Meeting customers
Customer days
Building customer scenarios
Listening not evaluating
Studying complainers
Enhancing sensing capabilities
• A structure for market sensing
A framework for market
sensing
Probability of the event occurring
High
Medium
Low
7
6
Effect of the
event on the
company*
Field of
dreams
Utopia
5
Things to
watch
4
3
2
Danger
Future
risks
1
* 1=Disaster, 2=Very bad, 3=Bad, 4=Neutral, 5=Good, 6=Very good, 7=Ideal
Enhancing sensing capabilities
• Managing the market sensing process
– choosing the environment
– sub-dividing the environment to focus attention
– identifying the impact of external changes
– interpreting the model for strategy building
– Linking market sensing to plans
– providing information as a stimulus to thinking
– consider who should be consulted and involved
Enhancing sensing capabilities
• A note of caution
– market sensing and new learning may be disruptive
inside an organization