customer mix: strategic marketing & communication
TRANSCRIPT
The New Marketing Mix:The New Marketing Mix:From Products to From Products to
Customer RelationshipsCustomer Relationships
Carlos F. CamargoCarlos F. Camargo
Where We Are Transition
Where We Need
To Be
Every Organization Faces Every Organization Faces Transition Transition
Much of the Problem Is Much of the Problem Is Where We’ve BeenWhere We’ve Been
194019401930193019201920 19501950 19601960
Marketplace Marketplace TransitionsTransitions
Product Development
Nationalization
Distribution
Depression
War Years
Re-Construction
Baby-Boom
Development of Marketing
198019801970197019601960 19901990 20002000
Marketplace Marketplace TransitionsTransitions
Re-emergence ofcompetition
Globalization
Rise of Quality
Price Competition
Cost-CuttingRe-engineering
Logistics/Digitalization
Transition of Information Technology
21st CenturyMarketplace
ProductProduct
CustomerCustomer
DistributionDistribution
Three Types of Organizations Three Types of Organizations EvolvedEvolved
Historical
Current
21st Century
Because of Where We’ve Because of Where We’ve Been, Marketing and Been, Marketing and Communications AreCommunications AreUnnatural Acts for Many Unnatural Acts for Many Organizations! Organizations!
Most Product-Focused Firms Most Product-Focused Firms Are Managed with the 4Ps Are Managed with the 4Ps Product - “best in class”Product - “best in class” Price - constant adjustments Price - constant adjustments Place (Distribution) - field Place (Distribution) - field
sales/channelssales/channels Promotion - deals, discounts and Super Promotion - deals, discounts and Super
Bowls Bowls
In a 4Ps-Managed Firm, In a 4Ps-Managed Firm, You Don’t Need Brands or You Don’t Need Brands or Marketing or Marketing or Communications Communications
All You Need Is a Superior All You Need Is a Superior Product, Lowest Price, Best Product, Lowest Price, Best Distribution, Most Exciting Distribution, Most Exciting Promotion, Or, Some Promotion, Or, Some Combination of Those Combination of Those Elements! Elements!
Product DrivenProduct Driven
RawRaw MaterialsMaterials
TechnologyTechnologyFacilitiesFacilities
MoneyMoney
DistributionDistribution LocationLocation
DistributionDistribution AggregationAggregation
Needs/Needs/WantsWants
PurchasingPurchasingPowerPowerConsumerConsumer
MediaMedia
ChannelChannel
MarketerMarketer
Information
Or, If You’re a Distribution-Or, If You’re a Distribution-Driven Firm, All You Need Is Driven Firm, All You Need Is Location, Location, Location Location, Location, Location And, Channels, Channels, And, Channels, Channels, Channels!Channels!
Distribution-DrivenDistribution-Driven
DistributionDistributionConcentrationConcentration
LocationsLocationsTechnologyTechnology
ConsumerConsumer
MediaMedia
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ChannelChannel(Logistics)(Logistics)Information
Those Were Before the Those Were Before the Transition of Information Transition of Information TechnologyTechnology
That Created a Totally New, That Created a Totally New, Interactive Marketplace Interactive Marketplace
198019801970197019601960 19901990 20002000
Marketplace Marketplace In TransitionIn Transition
Re-emergence ofcompetition
Globalization
Rise of Quality
Price Competition
Cost-CuttingRe-engineering
Logistics/Digitalization
Transition of Information Technology
21st CenturyMarketplace
Customer-DrivenCustomer-Driven
Needs/WantsNeeds/WantsChoiceChoice
Purchasing Purchasing PowerPower
TechnologyTechnologyCustomerCustomer
ChannelChannel
Mktr.Mktr. Mktr.Mktr. Mktr.Mktr.
ChannelChannel
Information
MediaMedia MediaMedia MediaMedia
CustomerCustomer
MediaMedia
ChannelChannel
MarketerMarketer
Information
ProductProductMarketersMarketers
CustomerCustomer
Information
ChannelChannel
Mktr.Mktr. Mktr.Mktr. Mktr.Mktr.
DistributionDistribution MarketersMarketers
MediaMedia
CustomerCustomer
ChannelChannel
Mktr.Mktr.
Information
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ChannelChannel
MediaMedia MediaMedia
CustomerCustomer MarketersMarketers
MediaMedia
CustomerCustomer
MediaMedia
ChannelChannel
MarketerMarketer
Information
ProductProductMarketersMarketers
CustomerCustomer
Information
ChannelChannel
Mktr.Mktr. Mktr.Mktr. Mktr.Mktr.
DistributionDistribution MarketersMarketers
MediaMedia
CustomerCustomer
ChannelChannel
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Information
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ChannelChannel
MediaMedia MediaMedia
CustomerCustomer MarketersMarketers
MediaMedia
Information Technology Information Technology Transition Shifts Transition Shifts Marketplace Power Marketplace Power
CustomerCustomer
MediaMedia
ChannelChannel
MarketerMarketer
Information
ProductProductMarketersMarketers
CustomerCustomer
Information
ChannelChannel
Mktr.Mktr. Mktr.Mktr. Mktr.Mktr.
DistributionDistribution MarketersMarketers
MediaMedia
CustomerCustomer
ChannelChannel
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Information
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ChannelChannel
MediaMedia MediaMedia
CustomerCustomer MarketersMarketers
MediaMedia
The New MarketplaceThe New Marketplace
Customer knowledge and choiceCustomer knowledge and choice Time and distance no longer relevantTime and distance no longer relevant Perfect global information on prices Perfect global information on prices
and alternativesand alternatives Speed of response demanded Speed of response demanded
Customer-DrivenCustomer-Driven
Needs/WantsNeeds/WantsChoiceChoice
Purchasing Purchasing PowerPower
TechnologyTechnologyCustomerCustomer
ChannelChannel
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ChannelChannel
Information
MediaMedia MediaMedia MediaMedia
A New Role for Marketing A New Role for Marketing and Communication and and Communication and Brands Brands
Basis:Basis: Best Practices in IMC - 1997Best Practices in IMC - 1997 Brand Communication ROI - 1997Brand Communication ROI - 1997 Best Practices in Branding - 1998Best Practices in Branding - 1998 Holistic Use of Data - 2000Holistic Use of Data - 2000
Best Practices in IMCBest Practices in IMC Major Finding - Four stagesMajor Finding - Four stages
The 4 Levels of Integrated The 4 Levels of Integrated Marketing CommunicationsMarketing Communications
Tactical CoordinationLevel 1:
Level 2:
Redefining Scope of Marketing Communication
Level 3:
Application of Information Technology
Level 4:
Financial andStrategic Integration
Key IMC Findings:Key IMC Findings: Communication as core competency Communication as core competency Gathering and sharing dataGathering and sharing data Resource allocation based on Resource allocation based on
customer valuecustomer value Marcom at higher level - credibility Marcom at higher level - credibility
Brand Communication ROIBrand Communication ROI
Managing customer and prospect Managing customer and prospect income flows income flows
Closed-loop systemsClosed-loop systems Incremental returnsIncremental returns Marginal cost and revenue Marginal cost and revenue
Closed Loop SystemsClosed Loop Systems
MeasurableCustomerBehavior
PresentCustomerDatabase
Measurable, Marketer-Controlled
Brand Activities
EffectsMeasures
UncontrollableBrand Marketing
From Environment
Base Measure$ Income Flows
Compet- New &Present itive Emerging
Users Users Users1 Present Income Flow in Category $ $ $2 Share of Requirements % % %3 Customer Income Flow to Brand $ $ $4 Contribution Margin % % % %5 Contribution Margin $ $ $ $6 Income Flow Without A Brand
Communication Program $ $ $7 Contribution Margin Without A
Brand Communication Program $ $ $8 Income Flow With A Brand
Communication Program $ $ $9 Gross Contribution Margin With A
Brand Communication Program $ $ $10 Brand Communication Investment $ $ $11 Net Contribution Margin $ $ $12 Difference in Contribution Margins With
and Without Brand Communication $ $ $13 Incremental Gain or Loss $ $ $14 Return On Investment % % %
Basic R-O-C-I ProcessBasic R-O-C-I Process
Brands and Branding Brands and Branding Management leadershipManagement leadership Clearly defined brand structuresClearly defined brand structures Clearly articulated brand promise/value Clearly articulated brand promise/value
proposition proposition Holistic communication - 360 degree Holistic communication - 360 degree
view view
5 Key Success Factors in 5 Key Success Factors in Branding Branding
Self knowledge and absolute clarity on Self knowledge and absolute clarity on what the brand is, what it stands for, what the brand is, what it stands for, and what it represents ….and what it represents ….
Based on information gathered from all Based on information gathered from all parties: customers, management, parties: customers, management, employees, and other relevant employees, and other relevant stakeholders …stakeholders …
5 Key Success Factors 5 Key Success Factors (cont.)(cont.)
Communicated clearly and consistently to Communicated clearly and consistently to diverse audiences ...diverse audiences ...
Supported by products/services, business Supported by products/services, business systems and policies that enable consistent systems and policies that enable consistent delivery on the core promise ...delivery on the core promise ...
Instilled at all levels of the organization.Instilled at all levels of the organization.
How Can We Relate These How Can We Relate These Best Practices to the Best Practices to the Challenges We all Face in Challenges We all Face in Getting Noticed and Getting Noticed and Promoting LoyaltyPromoting Loyalty
A New View: A New View: What Can Brands, Marketing What Can Brands, Marketing And Communication Do to And Communication Do to Build Your Business?Build Your Business?
Radical Ideas:Radical Ideas: Marketing from a cost to a profit centerMarketing from a cost to a profit center Focusing on outcomes, not outputsFocusing on outcomes, not outputs Managing income flows, not marketing Managing income flows, not marketing
programs programs
Four Goals of BusinessesFour Goals of Businesses Increase cash flowsIncrease cash flows Accelerate cash flowsAccelerate cash flows Stabilize cash flows Stabilize cash flows Build brand equity or shareholder value Build brand equity or shareholder value
You Can Do That With:You Can Do That With:
Productivity Productivity Quality Quality ProcessesProcesses New productsNew products Brands, marketing and Brands, marketing and
communication communication
My Argument: My Argument: Marketing and customer focusMarketing and customer focus Integration and holistic views Integration and holistic views Brands and brandingBrands and branding Dialogs and communication Dialogs and communication On-going relationshipsOn-going relationships
In Short, In Short, Use Marketing, Brands and Use Marketing, Brands and Communication as Value Communication as Value Drivers and Value Builders Drivers and Value Builders
Companies With Strong Brand Companies With Strong Brand Relationships Relationships
Get higher “share of wallet” - (increased revenues)Get higher “share of wallet” - (increased revenues) Get a price premium - (increased revenues)Get a price premium - (increased revenues) Achieve faster acceptance of new offerings, I.e. Achieve faster acceptance of new offerings, I.e.
“time to market” and “time to money”“time to market” and “time to money” Have less cash flow volatility, less risk - (steady Have less cash flow volatility, less risk - (steady
cash flow) cash flow) Keep their market share with less resources Keep their market share with less resources
allocated to marketing and communication - allocated to marketing and communication - (decreased costs)(decreased costs)
Source: Storbacka, CRM
Brands, Marketing and Brands, Marketing and Communication Must Contribute to Communication Must Contribute to Business Goals Business Goals
Must Provide Returns, Not Just Must Provide Returns, Not Just Expenses Expenses
Only Customers Can Only Customers Can Increase, Accelerate, Increase, Accelerate, Stabilize Cash Flows orStabilize Cash Flows orBuild Market Value Build Market Value
Marketers Should Manage Marketers Should Manage for The Best Customer Mix, for The Best Customer Mix, Not The Best Product Mix Not The Best Product Mix
To Turn Marketing, Brands To Turn Marketing, Brands And Communication Into And Communication Into Value Drivers, We’ll Need: Value Drivers, We’ll Need:
Processes, not functionsProcesses, not functions Strategies, not more tactics Strategies, not more tactics Integrated planning approachesIntegrated planning approaches Financial measurement systemsFinancial measurement systems
External/Internal Alignment
Prod-uction
Sales
Mar-keting
External Suppliers
InternalOper-ations
ExternalActivities Customers
Integrating the System,Not the Pieces and Parts
1. Customer Identification from Behavioral Database
2. Valuation of Customers/ Prospects
3. Creating and Delivering Brand Communication
4. Estimating Return-on-Customer- Investment
5. Budgeting, Allocation & Evaluation
The 5-Step Integrated Brand The 5-Step Integrated Brand Communication ProcessCommunication Process
IBC
Where We Are Transition
Where We Need
To Be
Every Organization Faces Every Organization Faces Transition Transition
CustomerCustomer
MediaMedia
ChannelChannel
MarketerMarketer
Information
ProductProductMarketersMarketers
CustomerCustomer
Information
ChannelChannel
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DistributionDistribution MarketersMarketers
MediaMedia
CustomerCustomer
ChannelChannel
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Information
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ChannelChannel
MediaMedia MediaMedia
CustomerCustomer MarketersMarketers
MediaMedia
The Challenge:The Challenge:
Become customer-focusedBecome customer-focused Market through brands and Market through brands and
relationshipsrelationships Turn communication into a value-Turn communication into a value-
driverdriver Measure financial returns Measure financial returns
That’s the Challenge of the That’s the Challenge of the 21st Century Marketplace21st Century Marketplace
Thank You for Your Time, Thank You for Your Time, Your Attention and Your Attention and Hopefully, Your InterestHopefully, Your Interest
Carlos’ email AddressCarlos’ email Address [email protected]@infoprax.com