Effective Marketing Strategies: Bridging Tradition and Innovation
School
Cass Business School Dubai**We aren't endorsed by this school
Course
LAW 110
Subject
Marketing
Date
Dec 11, 2024
Pages
22
Uploaded by MajorCrown10738
LESSON 1 - CONVENTIONAL AND NEW APPROACHES TO MARKETINGEvery company, even if it was super successful, can shut down (Nokia) cognitive biases, therefore itis important for brands to keep differentiating. Establishing a brand around this products allows thecompany to share values and create growth which overall can help with the performance of thecompany.However there are different strategies to consider that help you diversify yourself in the market andtherefore win over competition. You have to understand your market→ Coca cola(case study) has developed a new strategy to diversify their marketExploring and challenging- from explorer to challenger-Establishing Brand Edge - Make sure you are not imitating-Startup incubation - building stars, word of mouth-Obsessive market segmentation-Scale - bring it to other marketsAs we do this… we have to buildingcapabilities-Segmentation = consider behavior, values and lifestyles, get informations that matter, what is thecompetitive environment-Integrated Experiential brand Building = brand purpose and brand strategy, communication-Develop 21st Century = understand trends, also do the right advertising to do-Partner Value Creation = collaboration, builds strategic value-Agile Supply Chain = flexible distribution, packaging-Digital = digital marketing, analytics, ecommerceThis builds a community - the disciple of growth will allow us to growth quality leadership (quality withwhich we practice) with will allow better productivity*connecting our brands better with consumers -FIVE STRATEGIC PRIORITIES…WITH A NEW DISCIPLINE1.Consumer centric - align your portfolio to their needs2.Aiming for value rather than volume3.Building competitive advantage - expanding4.Leveraging Digital content, connection and commerce - start being in the field5.Shaping Culture to enable change - value of curiosity, learning and experimentation
BUILDING QUALITY LEADERSHIP REQUIRES 3 DIFFERENT DISCIPLINES(the discipline of building a portfolio)Disruptive explorer - nonexistent in the market ,important to try - figure it out, have experience, withmarket growth you can build a better position (entrepreneurial Audacity)Patient Challenger - ensure we have edge, innovation, consistent investment (Fighter)Purposeful Leader- follow consumers, follow trendsMARKETING TRENDS- new trends shaping marketing today●Fragmentation; more customized media propositions●Explosion of digital;●Data; analytics●Always On●Consumer power ; power from consumer, reviews●Personalization ; comes from segmentation*Brand values, not product attributes
The Decline and Dispersion of Marketing CompetenciesIn many firms, the Marketing function has been in decline. (towards disintegration)Today, less of a department, more of a series ofskills and competencies spread across theorganizationWhat’s missing is someone who reinforces and develops marketing skills across the company.Marketing affects- business and financial performance= business culture to satisfy customers, business strategy for targeting, tactical dimensions ofdemand including promotion and pricingHow marketing isspecificallypositioned in the company organizationally, and how the companymoregenerallyattempts to be market-driven and customer-oriented.Challenges for marketing managers●Inability to Measure Marketing Productivity-hard to measure (direct return on investment) …Distinction between marketing (LR) and sales (SR)●Long term versus Short term Emphasis-better to invest into long term to improve quality, satisfaction,brand equity●Innovation in product and strategy -product innovation for long term profitability by understanding customerwants, needs , attitudes, preferences… this is where marketing should lead●Building Brand Equity- strategic importance of branding to develop marketing strategies (customerloyalty) … building marketing competence as a source of competitive advantage.A Perspective on the Evolution of Marketing Management-Perspective of Marketing concept as management philosophy emphasizing customer orientation-The integration of quantitative methods and behavioral science into the marketing disciplineChanges in role of marketing=more flexible structures, diffusion of technology, globalization, competitive prices,outsourcingRelation between selling and marketing=marketing support for sales force management, including promotionalmaterials and sales tools, market research to plan and control field sales activity, and the development of strong brandto support the trade channels and related selling effort.→Customer orientation and value delivery must be at the core of the firm if the firm is to maximize long-term value forits owners.
Chapter 12 : Organizing to compete on the consumer value imperativesTwo factors that able to execute a strategy - organization and leaders*No organization can continue to make decisions from the outside in without the strong guidance ofoutside-in-minded leaders. (Leaders communicate the vision, consider the needs and provide resources)Allow companies to get full economic value..,1.Customer value leadership2.Value innovation3.The effective management of customers4.Brand assets●An outside in culture- provide superior value on customer own terms●An alignment with the market- structure, metrics and incentives●Capabilities for competing on customer value -organizational processes that allow to implementAN OUTSIDE IN ORGANIZATIONAL CULTUREThe organization must learn to think of itself not asproducing goods or services but as buying customers. *Understand the culture-Customer needs and benefits so firms can create and improve customer value over time-Direct contact with customers to understand potential innovations-Watch competitors-Long term investment strategies-Satisfied employees lead to satisfied customers - problem solving and responsible employeesAN ALIGNMENT WITH THE MARKETmetrics to ensure employees understand customer value, accomplisoutcomes and diagnose the problem, get incentives with good outcomes.-Get the right metrics that add customer value, be valid and give the company competitive advantage-Align incentives = If the firm wants to compete on customer value, then incentives for all employees haveto be structured to encourage achievementCAPABILITIES FOR COMPETING ON CUSTOMER VALUEcompanies must build capabilities for full profitpotentialFor capabilities to be permanent they need to be…-fundamental - valuable-coordinated across functions-reflected in formal and informal routines - in all procedures, increase efficiency-with supporting structure and incentive system - no confusion, same aim-tough for competitors to imitate
LESSON 2 - CONVENTIONAL AND NEW APPROACHES TO MARKETINGEVOLUTION OF MARKETING THINKINGA historical perspective to marketing strategyThe classical years(1910-1950)-Development of new concepting (product differentiation, advertising, pricing and distribution)-The strategic objective: budgeting and control resourcesThe managerial years(1951-1969)-Huge economic growth / environment considered uncontrollable-Introduce marketing mix management-Long range planningThe Adoptive years(1971-1982)-Achieving and sustaining competitive advantage-Understanding of the environment and adapting to changing environment-Locate resources-Market share as the main strategic objectiveThe proactive years (1983-Today)-critical thinking-entrepreneurship inside and outside the organization-creation of opportunities by being proactive and innovative-manage and shape their environmentFORCES SHAPING MARKETING ROLESThe decline and dispersion of marketing competence
LESSON 3 - DIAGNOSING COMPETITIVE ADVANTAGE AND THE MARKET DRIVENORGANIZATIONElements of competitive advantageIdentification of Key success factors (analyzeinternally)-Source of Advantage-Positional Advantage -differentiation-Performance Outcomes -satisfaction* If you have all of this it doesn’t mean you will me automatically successful (not deterministic)Sources of advantage*superior skills - distinctivecapabilities*superior resources -distribution, location,manufacturing, assemblylinesImproving this help reducecosts, be more efficient ( withinventories, market data)Positional Advantage; shifting strategical positioning*superior customer value - (improve product, delivery,service, market)*lower relative costs*differentiated position - seen assuperiority and uniquenessPerformance Outcome*satisfaction*loyalty*market share*profitabilityGive competitive advantageASSESSING ADVANTAGE - A FRAMEWORK FOR DIAGNOSING COMPETITIVE SUPERIORITY1.Firms seek an advantage2.Develop distinctive competencies, get lower costs and differentiate through superior customervalue3.Results… market share and profitabilityFRAMEWORKBest strategic factors→ quality of tactics,programs and system of implementationWhat are the activities that the organizationperforms?-Objectives-Policy choices (legislation)-Timing (first mover advantage - dominatethe market)-Options
Assessing Advantage(Methods of assessing advantage )SOURCES POSITION AND PERFORMANCE*2 ways to look at competitive advantage (competitors and customer placed)They complement each otherCOMPETITIVE CENTER - management comparison1.Assessing sources(distinctive competences) - strengths and weakness / comparison withtarget competitors / marketing skills2.Indicators of positional advantage- costs / value chain and activities comparison3.Key success factors- comparison of factors that separate competitors / market share4. Measure of performance -market share and profitabilityManagement comparisondue to absence of objective and comparable measures→ Biases ; selective perception and dominated by opinionsCUSTOMER FOCUS - analyze customer benefits and identify actions to improve performanceAre you superior or inferior?-Comparison of attributes firm vs competition-Satisfaction - quality of consumer relationship-Loyalty
How to assess competitive advantage?●Relationship between competitorfocused and customer centered….market research and appropriate balance●Source- Position - PerformanceFramework… measures being comparedand contrasted●Nature of Individual measures…recognize potential errors and biases andlook at trends●Overall Process= changes in our marketand among competitors / planning andstrategyDISTINCTIVE CAPABILITIES= is a tight integrated bundle of complementary skills and techniquesthat enables a team or group execute one or more critical processes much better than competitors-Does it matter to customers?-Superiority sustained over time? Superior?
THE CAPABILITIES OF MARKET DRIVEN ORGANIZATIONSMarket orientationrepresents superiority skills in understanding and satisfying customers*Positive correlation with superior performance-customers interests firsts-superior informations about customers and competitors-superior consumer value→Similarly… Total quality management (TQM) promises superior performance through an externalfocus on customer satisfaction and internal focus on operational excellenceThe capabilities approach to strategy1.Two perspective on CompetitivenessASSETS (resource accumulated) & CAPABILITIES (brings this assests together)2.Defyining and Identifying capabilities= capabilities are complex bundles of skills andaccumulated knowledge, exercised through organizational processes, that enable finns tocoordinate activities and make use of their assets. (embendeded within the organization)3.Distintive capabilities=gives highercontribution to costumer value… keysuccess factors-They are difficult to develop and imitate-Help adaptation to environmental change-Capabilities that support multiple lines of abusiness are core competencies -separate business units will then developeach distintive capabiltiies to gain superiorposition4.Capabilities and Performance; capabilities contribution to sustainable competitive advantageand superior performance and profitability (VRIS)
Capabilities in a Market Driven OrganizationCLASSIFYING CAPABILITIES Capabilities can be usefully sorted into three categories, depending onthe orientation and focus of the defining processes●At one end of the spectrum are those that are deployed from theinside outand activated bymarket requirements, competitive challenges, and external opportunities.●Focal point outside the organization. The purpose ofoutside-in capabilitiesis to connect theprocesses and enable the business to compete by anticipating market requirements ahead ofcompetitors and gaining relationships with customers.●Strategy development, new product/service development. price setting, purchasing, andcustomer order fulfillment are critical activities that must be informed by both external (outside-in)and internal (inside-out) analyses→ market driven have strong outside in processesBuilding superior marketing capabilitiesThe emerging capabilities approach to strategyoffers a valuable new perspective on how toachieve and sustain amarket orientationUnderstand which capabilities to improve dependson industry size, target costumers and trends.- Market Sensing capability; how well theorganization is equipped for marketing response- Customer linking capability ; skills, abilities andprocesses needed to achieve costumerrelationships
LESSON 4 - BUILDING THE MARKETDRIVEN ORGANIZATIONElements of Market Organization-Culture (values)-Configuration (restructuring)-Shared Knowledge based-CapabilitiesCultureMarket Driven Organization(Marketing culture)*improve marketing capabilities*align organizational structure*market oriented culture-Decisions start with the customer-Quality-customer loyalty is key for profitability-know about competition-Market researchSelf Centered Organizations-Sell to whoever will buy-consumer relationships only relate tomarketing department-Avoid mistakes-Customer data as a control mechanism-Protect the existing revenue streamMARKET DRIVEN ORGANIZATIONSMarketing Capabilities;market sensing steps (improving market sensing capabilties)= type of research technique that involves collecting qualitative data through a series of interviews,focus groups and in depth questionnaires designed to help management teams understand theexternal market in a more effective, efficient and emotive style.●Market sensing●Sense making and sharing - decision making●Taking actions●Feedback and learningMaintainmaintain direct contact with your customerKeepkeep an open mindTriangulatetriangulate with multiple methodsExperimentexperiment continuouslyCreatecreate a common picture of the customerShareshare customer insights and best practices
LESSON 5 - BUILDING THE MARKET DRIVEN ORGANIZATIONOrganizational configuration - how the organization structures itself to be closer to the customer, togain information.*Companies follow different approaches… small size tasks (Amazon)*Network - connect with customer (Uber and Spotify)Organization Design…●Customer oriented organization (Amazon) or Competitor focused organizationsYou can’t have a successful strategy if you don't have support →market orientation-Capabilities - market related capabilities (loyalty)-CultureCHANGING MINDSET (change culture)You need to do 5 things…-Personal Insight= Understand why you want to adopt this culture / what people think*You do this by doing Revitalization Workshop-Comprehensive Communication= Tell them why you changed, what motivates us to change?What is the contribution to society and community? Why is this change needed and affects theorganization?*You can achieve this by Communicating Change-Talent and skills developmentby providing frontline training-Reinforcing systems and processes= managers job, you need to align your incentives*You motivate this behavior with new employee contract (rewards)-Role Models = companies identify what managers have the power within the organization andmake them apply leadership actions
LESSON 6 - FRAMEWORKS FOR DEVELOPING MARKETING STRATEGYTHE OUTSIDE IN MARKETING STRATEGY FRAMEWORK●Identify the strength of the organization and explore the opportunities●Understand the capabilities required→ What customer value do we deliver with what capabilities?*How can we deliver new value to customers?*How can we best leverage our brand and customer as assets?*How should we defend ourselves from our competitor's attacks?*What new capabilities do we need?Why is the inside out approach to strategy so pervasive?-Positive reinforcement of the efficiency gain focus-Other stakeholders proximity to the management team-The resource based view of the firm theory?-Employees inherent drive for self preservation-Tendency to behave like the others. Normative pressuresHow do you know if a company follows an outside in or inside out? (difference)Outside inInside Out-Decision start in the market andopportunities for advantage-Profits are gained through superior valueproposition-Leveraging the brand and customer assets-We know more than our competitors-Customer knowledge is a valuable assets-Superior quality-Customer loyalty is the key to profitability-Sell to whoever that buys-Profits are gained through cost cutting andefficiency improvement (TQM)-Protect the cash flow stream-Expanding the customer base-Customer data as a control mechanism-Customers buy performance featuresExample - M&SM&S to become more customer oriented than ever-They started by changing the designs and the clothings (give a department of fashion) - newin store personal stylist-Spent lots of money on digitalization and open a new website-Created an entrepreneurial culture - new clothing campaign (must have campaign)-Not as traditional as they used to be-Analytics to understand the customers better
The elements of the outside in framework= 4 Drivers to this approach which are connected to each other1.Imperative 1= Be a customer value leader ; forvalue of the customers (additional benefits toprovide) it is about the product and the price2.Imperative 2= Innovate new value for the costumer; create and generate3.Imperative 3= Capitalize on the costumer as anasset ; comes from value (can be used strategically)4.Imperative 4= Capitalize on the brand as an assets-
THE COSTUMER EQUITY STRATEGY FRAMEWORKCustomer equity= A firm’s customer equity os the total of the discounted lifetime values of all of its customers→This framework allows you to set prioritiesDrivers of customer equityValue Equity: is the customer objective assessment of the utility of a brand, based on perception of what is givenup for what is receivedValue equity emphasizes the rational and objective offerings of a firm’s offerings.*How does the customer evaluate quality?*How attractive is the price?When equity value matters the most…-Differences between competing products-purchases with complex decision processes-B2B purchases-New to the market products or services-Firms want to revitalize products in the maturity stage of the product life cycleBrand Equity: is the customer's subjective and intangible assessment of the brand, above and beyond itsobjectively presumed value. This evaluation is shaped by the firm’s marketing strategy and tacticsand is influenced through customers' life experience and association with the brand.*What is evoked to the consumer?*Costumer association with emotion, lifestyle or experienceWhen brand equity matters the most…-low involvement purchases-associations with products-When is difficult to evaluate quality prior to consumption-Use is highly visible to othersRetention Equity: is the tendency of the customer to stick with the brand, above and beyond the customer'ssubjective and objective assessment of the brand. It focuses on the relationship between thecustomer and the firm based upon the actions taken from the firm and by the customer to establish,build and maintain the relationships.*Does the customer benefit from the relationship with the firm?*Does the firm benefit from the relationship with the customer?When retention equity matters most…-aspirational value in the loyalty programs-community associated - when customers action and efforts are required-can create learning relationships with customers and build switch costs
KEY STEPS IN DRIVING CUSTOMER EQUITYSTEP 1What's the most critical connection?What really drives customer equity?Which equity matters the most?BRAND? VALUE? RETENTION?STEP 2What are the key drivers of brand equity?Value equity? Retention?These drivers just actionable?STEP 3Benchmark against yourcompetitorsSTEP 4Invest in the areas where the payback to customers is highest.→ importance performance map (equity importance / equity performance)What is the most important driver?*Quality*Price*Convenience (proximity or time convenience or how easy to use)
LESSON 7 - CREATING VALUEValue leadership imperative or Value Equity-How to build value equity ot the customer value leadership imperativeCustomer valueValue is the trade off between the benefits that the customer perceive they are getting from an offeringand the perceived cost of obtaining these benefits - adjusted for the riskiness of the offer*Benefits can be tangible or intangible (more difficult)CUSTOMER VALUE = (1 - perceived risk) x (perceived benefits - perceived life cycle costs)→ hard to quantify / cannot be measuredValue vectors= categories to assess value1.Performance value (best functionality)2.Price value (best price for the offer)3.Rational Value (customer value)HOW DO CUSTOMERS CHOOSE?●customer focus on subset of offering (differentconsiderations)●customer wight the value vectors●customer assess offering performance: below, at orabove parityChanging value priorities in evolving markets-Customer gain experience (learn more about newproduct)-Price value players enter (price wars)Evolving Customer Value Position-Parity levels are rising-Relative importance of value vectors changesSUSTAINING RELATIONAL VALUE RELATIONSHIP-Segregate customer better-Rethink the processes for delivering relational value in order to cut costs while enhancing valuedcustomer services
LESSON 8 - VALUE INNOVATIONBecoming a Customer Value Leader - Value Customers-How to become a value leader-How to innovate valueElements of customer value strategy*What is our primary business objective?*What is our customer value proposition?Determining a distinctive value proposition-What will be our target customer segment?-What will the firm offer the target segment to meet its needs?-How well does the firm's offering compare to competitors offering on the key of value proposition?*What is our business model for delivering and monetizing customer value?Business Model → Elements1.What business activities are necessary to create the value that we promise to our customers?VALUE CREATION2.How do we make money while creating value for our customers?VALUE CAPTUREVALUE CREATION●which activities to perform●how these activities are sequenced●who perform themAchieving a customer value advantage-PerformanceValue Leadership= excellent quality /emotional impact-PriceValue Leadership= disciplined costmanagement / superior price capabilities-RelationshipValue Leadership= customerrelationship management (CRM) / comprehensive solutionmanagement
INNOVATE NEW VALUE FOR CUSTOMERS-Satisfy latent and unmet needs-Overcome barrier for consumption-Enter new segment, categories and geographics-Develop products or services that serve noncustomers in the industry - Traserve industry barriers-Innovate price-Redesign customer experience-Create solutions to save consumer time, money,reduce risks and make more money-Look at the competitive side by reducing, increasingand eliminating key aspects to current industrystandardsThe buyer utility map
LESSON 9 - RETENTION EQUITY STRATEGIES-Understanding market-relating capabilities (market orientation)-Designing a relating marketing strategyHow can a company generate and sustain customer loyalty?*Invest in Retention EquityHow do you build trust? Make customers care about customer service, teach protocol, give stafffeedbackBenefits of loyalty-invest in the relationships-endorse the firm-cross into more categories-purchase new products and services-Respond faster-Do not detect the competition-Lower price sensitivity
LESSON 10 - BRAND EQUITY STRATEGIES-Identify strategies to build brand equity-Understanding the brand value chainBrand equity= is the differential effect of brandknowledge on consumer response to the marketing ofthe brandHow can companies increase value?The customer mindset… what do they value and howcan the cosmpany do in order to address this issue…Brand value chain- a sequence of actions that lead to affecting the brand value of a company? Howdo you build brand equity*How do you do transactions? with the multipliers…-Program quality-Marketplace-Investor sentiment1.Marketing program investment - what customers think about the brand? set of characteristic -clear positioning2.Customer Mindset - be consistent3.Brand Performance - positive responses4.Shareholder value - affect on stakeholder
Brand equity Model-Brand Vitality - our difference on otherbrands and who are our competitors-Brand Structure - respect of the brand,how much people like the brand