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Problems with traditional strategic marketing planning process Products, brands and innovation Price and value Distribution channels and value chains.

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Presentation on theme: "Problems with traditional strategic marketing planning process Products, brands and innovation Price and value Distribution channels and value chains."— Presentation transcript:

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3 Problems with traditional strategic marketing planning process Products, brands and innovation Price and value Distribution channels and value chains Marketing communications The new marketing challenge Marketing is strategy

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5 1 Mission 2 Corporate Objectives 7 Marketing objectives and strategies 3 Marketing Audit 4 Market overview 5 SWOT analysis 6 Assumptions 8 Estimate expected results and identify alternative plans and mixes 9 Budget 10 First year detailed implementation programme Phase One Goal Setting Phase Two Situation Review Phase Three Strategy Formulation Phase Four Resource allocation and Monitoring Measurement and review

6 4 MAIN STAGES - A. ANALYSIS – data driven/market-place/company position within it/relative to competition B. OBJECTIVES – link to corporate strategy/ use SMART technique C. STRATEGY – consistent with corporate strategy/general direction which will deliver the objectives D. TACTICS – the detailed action plans underpinning the strategy

7 Requires one year to complete all stages Needs hard data from detailed and in-depth analysis of market before company can make decisions Undertaken by marketers/strategists without involvement of other people in organisation

8 Requires one year to complete all stages Nope not necessarily Needs hard data from detailed and in-depth analysis of market before company can make decisions Should be ongoing Undertaken by marketers/strategists without involvement of other people in organisation insane

9 Based on ideas of Planning School Machine assumption produce each of the component parts as specified, assemble them according to the blueprint, and the end product (strategy) will result! Often reduced to a numbers game of performance control that had little to do with strategy Source: Mintzberg et al (1998) Strategy safari, Hemel Hempstead, Prentice hall

10 1. Predetermination Organisation must be able to predict the course of its environment, to control it, or simply to assume its stability Impossible to predict discontinuities (e.g. technological breakthroughs or price increases) Requires stability during strategy making Source: Mintzberg et al (1998) Strategy safari, Hemel Hempstead, Prentice hall

11 2. Detachment It is through administrative systems that planning and policy are made possible, because the systems capture knowledge about the task… true management by exception, and true policy directions are now possible, because management is no longer wholly immersed in the details of the task itself. Effective strategists.. immerse themselves in daily detail while being able to abstract the strategic messages Source: Mintzberg et al (1998) Strategy safari, Hemel Hempstead, Prentice hall

12 3. Failure of formalisation Failure of: forecasting to predict discontinuities institutionalisation to provide innovation Hard data to substitute for soft Fixed schedules to respond to dynamic factors Source: Mintzberg et al (1998) Strategy safari, Hemel Hempstead, Prentice hall

13 Companies dont have time to wait for plan to be developed Rejected marketing and strategy (strategy departments closed in 1980s) Customers not accept being dictated to by companies and changed relationship – Customer is King

14 Old marketing is about marketing programmes structured/planned around traditional model operations/tactical New marketing is concerned with the underlying process of going to market and strategic choices

15 Confronting revolution in markets Identifying renewal opportunities Developing new ways of doing business/new business models or reinvention

16 Is it real? Are markets revolutionised (since when?) The need for renewal –is it new? Is reinvention/revolution necessary or irresponsible? Or is this a message for incompetent 2 nd raters? How did your firm get where it is? What are its problems and opportunities?

17 Disruptive pressures on existing business models Value-creating opportunities for new business models REVOLUTION Radical market and customer change/trends RENEWAL Coping/ adaptation mechanisms REINVENTION Designing new ways of doing business

18 the fate of marketing hinges on elevating the role of marketing executives from promotions- focused tacticians to customer- focused leaders of transformational initiatives that are strategic, cross-functional and bottom-line oriented Nirmalya Kumar, 2004

19 the fate of marketing hinges on elevating the role of marketing executives from promotions- focused tacticians to customer- focused leaders of (transformational) initiatives that are strategic, cross-functional and bottom- line oriented Nirmalya Kumar, 2004

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21 Brand marketing Relationship marketing Value-driven strategy The search for customer value

22 Branding Relationship marketing Value

23 Branding is central to conventional marketing thinking – brand the product/service, company, person, country, etc. Brands bring important benefits to customers (reduced search time) and companies (brand equity or value)

24 Branding can transform markets Cool brands often win BUT – brands do not make you unbeatable Coca-Cola Levi-Strauss Marlboro

25 Most valuable brand in world 1999 had 50% market share of world soft drinks market Problem – world fell out of love with carbonated soft drinks Tried to keep up with fragmenting soft drinks market Introduced bottled water, flavoured water, juice-based drinks, flavoured iced tea and coffee drinks and energy drinks Use local brands Products not always branded with Coca-cola name Lost market share to Pepsi

26 UK customers assume bottled water from natural sources ie springs Coca- Cola purified water from tap water in London Origin came to light when a complaint was made to the British Food Standards Agency over Coke's use of the word "pure" in its Dasani marketing - implies that tap water is 'impure'. Like Nestle, McDonald's and Cadbury Schweppes, Coke makes a gratifying target for journalists, in that all those companies trade heavily on their brand. Source: Guardian March 4, 2004

27 Issues that go wrong with branding blind branding private brand competition brands which are liabilities counterfeit brands wrong brand trajectory, e.g., Stella Artois wife beater

28 Strategic brand management is the priority not creativity Does the brand create customer value and how?

29 Customer relationship provides the basis for market segmentation Contrast the relationship the customer wants (long-term vs short-term) with the closeness wanted in the supplier relationship (close vs distant)

30 Value has become the central focus of strategy (because there is no choice) The key issue is now value innovation (in the customers terms) But value does not have a single meaning e.g., operational excellence vs. customer intimacy vs. product leadership (Treacy and Wiersema, 1995)

31 Operational Excellence Providing customers with reliable products or services at competitive prices and delivered with minimal difficulty or inconvenience Customer intimacy Segmenting and targeting markets precisely and then tailoring offerings to match exactly the demands of those niches Companies combine detailed customer knowledge with operational flexibility – can respond quickly to almost any need and creates customer loyalty Product Leadership Offering leading-edge products and services that enhance the customers use or application of the product Make rivals goods obsolete Source: Treacy, M. and Wiersema, F., 1993, Customer Intimacy and Other Value Disciplines Harvard Business Review January- February

32 Operational excellenceProduct leadershipCustomer intimacy Strategic value pathway (value proposition) Best total cost Best product Best total solution Golden rule Variety kills efficiency Cannibalising your success with breakthroughs Solve the clients broader problem Core processes End-to-end product delivery Invention Commercialization Market exploitation Client acquisition & development Solution development Improvement levers Process redesign Continuous improvement Product technology R&D cycle time Problem experience Service customization Major improvement challenges Shift to new asset base Jump to new technology Total change in solution paradigm Choice of strategic value pathway Source: Barnes et al (2009) Creating and Delivering your Value Proposition, Kogan Page p 46

33 The danger of making assumptions we know what our customers want bung in some customer service just make it cheaper or, perhaps, take customer value seriously?

34 Value as rational cost/benefit analysis Value migration value migrates from one attribute feature to another different people buy different value Customer value is complex, multi-dimensional, unstable and idiosyncratic, but it is what matters


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