Presentation on theme: "ENT 422, Lecture 7 The Critical Role of Marketing The Marketing Tool Kit."— Presentation transcript:
ENT 422, Lecture 7 The Critical Role of Marketing The Marketing Tool Kit
We live in a world of unprecedented technological innovation But we also know: - 80+% of New Ventures Fail - Intrapreneurship within corporations has mixed results So technology innovation is critical but insufficient.
Timmons suggests that critical enablers for technology include: Adding significant customer value Solving a significant problem at a premium price The result: robust margins for stakeholders and reinvest in technology Management experience is critical
David Hewlett & Bill Packard founded a dynasty. They combined superior engineering with world class principles & practices, “The HP Way” -Focus -Empowered Employees - MBO - Added value… “don’t attack a fortified hill” - Participating decisions
Company Core Competence Customer Scenario Competitive Vulnerability 4Ps + $ Customer Deliverables Corporate Advantage Implementation Plan
The Company - Marketing Tool Kit Is the company’s strategic plan customer focused on customer loyalty/retention (vs EPS, margin, cycle time, other internal measures…)? Does the company have a balance between its competitive focus and the critical need for alliances? Does the company focus on functional activities or on integrated processes that utilize a supply/chain approach to the efficient delivery of products/services to the customer?
The Company - Marketing Tool Kit Does the company constantly update and renew its customer knowledge and experience base as a critical planning tool? Are relationships with customers, suppliers, employees cherished? Dr. Demming: “Does the firm demonstrate constancy of purpose? Is the company focused on its’ core competencies, their renewal, and use to dominate markets (niches)?
The Company - Marketing Tool Kit Is the Company on the cutting edge of using internet technology to assess customer needs and adapt to new channels? Is the company a leader in ethical behavior? Does it set a high standard for its employees, vendors and does it respond to customer issues?
The Customer - Marketing Tool Kit Is delighting the customer the top priority of the organization? Does the organization have a comprehensive Marketing Information System (MIS) to integrate critical marketing data and track changes? Does the company have a closed loop customer satisfaction process to monitor customer delight, make it easy for customers to complain and assure that individual customer complaints are promptly resolved and the root causes of the complaints addressed?
The Customer - Marketing Tool Kit Are all customers viewed as important to the company, or just large customers? Are customers invited into the process of determining their needs? What is the ratio of resources committed to understanding the needs of customers versus the resources spent on product/service development? Does the company have a good understanding of the threats and opportunities posed by the internet?
The Competition - Marketing Tool Kit The best competitive strategy maybe to focus on your customer’s true needs and eliminate competition (Ohmae). Strategic alliances can be a powerful competitive strategy….. “my friend is the enemy of my enemy”. Continuously assess vulnerabilities…. yours and your competitors. The most effective competitive strategies can be the result of “out of the box” thinking. Attack your competitor when you have a major competitive advantage and their ability to respond is impaired.
The Competition - Marketing Tool Kit Product / service differentiation and cost leadership can be critical elements of a balanced competitive strategy. Millions of years of evolution have prepared us to fight our competition, but alliances may become more critical in the new millennium. Porter’s classic assessment tools/process focus on - The five forces of competition - The three generic strategies - The framework for competitive analysis
Product Strategy - Marketing Tool Kit Corporate Strategy drives the development of product/service strategies. Examples: General Electric… goal: dominate global markets. H&R Block…..goal: friendly, convenient, affordable service for small businesses and individuals. Market research is a critical tool for evaluating and ranking alternative concepts including the differentiation between basic, discriminating and energizing attributes. Products/Services are intertwined with pricing, promotion, place and customer service. The customer integrates all of this information to assess the value derived from the entire package.
Product Strategy - Marketing Tool Kit Homogenous market segments are the basic building blocks for product development. Must understand the customer requirements at the segment level, e.g. Colgate Palmolive Case…. Product service and customer support are critical elements of the product package. “A product or service is a thing. A brand is a promise to a customer based on consumer trust in the brand.”….. David Oleson, Sr. VP, Starbucks
Pricing - Marketing Tool Kit Price = f (3C’s) Price discrimination exists and can be driven by marketing strategies The “right price” established a clear value for the customer while meeting the objectives of the company Right price a reflection of the marketing mix Pricing decisions should be based on future incremental cost / revenue…. sunk costs are just that….sunk
Marketing Communications (“Promotion”) - Marketing Tool Kit Marketing Communications is more than advertising It is a mix Clearly define the target audience / market segment What is the market message….The Unique Selling Proposition The message must be believable
Distribution Channels - Marketing Tool Kit Marketing Distribution Channels are systems/processes, which efficiently makes goods and services available to customers in a way that meets their requirements and provides a sustainable competitive advantage. Bucklin: a competitive advantage accrues to those channel members that reduce the consumers’ search, waiting time, storage and other costs. Channels are dynamic and change in response to economic conditions, customer buying patterns, and macro-environmental factors.
Distribution Channels - Marketing Tool Kit Channel management is the implementation of strategies to achieve high-performance channel relationships. Channel conflict results from unclear objectives and undifferentiated products/services and resultant competition between channel members. Direct selling is the channel of preference where the customers require information / on-going customer support.
Managing Service Businesses - Marketing Tool Kit Insufficient time is spent in determining customer requirements In service businesses the “marketer” and the “deliverer” of the service can be the same person This person, the employee, is critical to achieving customer delight Resolving issues/complaints is critical to good customer relations.
Managing Service Businesses - Marketing Tool Kit Managing expectations can assist in meeting or exceeding a customers requirements Service industries are a major growth factor in our (new) economy Employee satisfaction a critical component of customer service…behind many dissatisfied customers are dissatisfied employees.
Smartdesk Incorporated Assist profoundly handicapped to live a fuller life Critical business questions: - How large is the market? - How will customers pay for the product? - What is the channel of distribution?
Prevent ACL, Inc. Innovative training system to reduce ACL Critical business questions: - What is the cost today to treat ACL vs the proposed system? - How do we create market awareness? - Push - Pull - Do we form our own sales organization or partner with a sports medicine company?
Possible Future Modules Estimating market demand. Customer perceived value…The key to pricing. Building Awareness…promotion. Distribution Channels for competitive advantage.