hb 45 stmk handout slides
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www.henley.reading.ac.uk
Dr Baskin Yenicioglu
Dr Nikoletta Siamagka
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STRATEGIC MARKETING
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Learning Outcomes of the Workshop
This workshop will:
Develop knowledge and understanding of marketing concepts.
Provide opportunities to analyse marketing problems.
Encourage decision making through practice and enable you to apply
marketing principles.
Provide an understanding of marketing planning.
Provide a practical opportunity to develop professional skills in
marketing: teamwork, analysis, research, presentations and decision
making.
Help you prepare for the assignment and the exam.
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Module Structure
What is Marketing?
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Marketing is
the management process responsible for
identifying, anticipating and satisfying customer
requirements profitably.Chartered Institute of Marketing
is the activity, set of institutions, and processes
for creating, communicating, delivering, andexchanging offerings that have value for customers,
clients, partners, and society at large.American Marketing Association
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As a Philosophy
Marketing..It encompasses the entire
business. It is the whole business seenfrom the point of view of its final result,
that is from the customers point of view.
(P.F.Drucker, 1954)
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Be Customer Centric
There is only one valid definition of
business purpose: to create a customer.
Peter. F. Drucker (1954)
the purpose of marketing: to create a
valuable customer experienceyour
customers will thank you for it, stay
loyal, and pay a premium.
B Schmitt (1999)
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Market Orientation
Intelligence Generation
Intelligence Dissemination
Organisation-wide Responsiveness
Competitor Orientation
Customer Orientation
Interfunctional Co-Ordination
Ajay Kohli & Benard Jaworski
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Market Driven vs. Market Driving?
Market Driven Market Driving
General
Customer Orientation
Identifying, analysing and
answering to the customer
Competitor Orientation
Organisations respond to activitywithin existing known market
parameters
Adaptation
Predicting which technologies
are likely to be successful given
customer needs and wants
Respond to market structure
Continuous benchmarking
Imitating others
Organisations act to create change inexisting market structures and the
behaviours of customers and
competitors
At the cutting edge of new customer
needs and wants
Shape customers behaviour
proactively
Pioneer
Predict the evolution of customerneeds and market boundaries
Shape market structures proactively
Identify difficult to imitate internal and
external competencies
Discontinuous disruption
Adapted from: Hollensen S. Marketing Planning A Global Perspective. Mcgraw Hill. 2005. Pg. 29.
External effects on consumer trends
Climate change and environmental concerns
World power re-balancing
Demographics and changes in family composition
Levels of education
Role of technology
Generational changes
Surveillance society
Culture of immediacy and gratification
To name but a few
(Source: The Future Foundation)
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A Typology of Market Evolution
Customer Market Power
Producer
Market Power
Low
High
Low High
(1) Benign
Co-
Existence
(2) Industrial
Revolution
(Mass
Production
Economy)
(3) Customer
Supremacy
(Service
Economy)
(4) Strong
Interaction
(Emerging
Information
Paradigm)
Modified from Beyond Market Orientation: A conceptualisation of Market Evolution, with Pierre Berthon and
Morris B. Holbrook, Journal of Interactive Marketing, Summer, 2000
StrategicMarketingPlanning
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The Marketing Management
Planning ProcessStrategic Business Planning
Marketing Management Process
Market
Research
Macro-
Environment
Customer
Needs
Competitive
& Market
Segmentation
& TargetingProduct
PositioningMarketing Mix
Decisions
Product
Price
Place
Promotion
3 Service Ps
Strategic Marketing Tactical Marketing
Marketing Metrics, Budgets, Evaluation & Accountability
Planning providesMarketing planning is: the planned application of marketing resources toachieve marketing objectives (McDonald, 2004).
It provides: An in-depth investigation of the market and identification of the
source of
competitive advantage
Clarity and agreement internally regarding the objectives, strategy andtactics for the product (we all know where we are going and what weare doing)
A statement of the resources required in order to achieve the statedobjectives
Commitment and support internally from all relevant departments
A public statement that can be used to brief and direct all thoseinvolved in the implementation process.
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Hierarchy of Strategies
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Corporate
Strategy
Sets out the organizations overall direction for growth/competitive advantage and themanagement of its various businesses and product lines within its portfolio
Describes the areas of business in which the company is to be involved and the financialand human resource to support this.
Goals and objectives in relation to revenue growth, profitability, ROI, earnings per share,contribution to stakeholders.
Business
Strategy
Developed at business unit or divisional level, sets out the products and markets theorganization is in within the business or industry.
Describes the means for achieving competitive advantage, how its SBUs should competeor co-operate within the industry
Goals and objectives in relation to sales growth, new product or market growth
,profitability, cash flow or basis for competitive advantage.
Functional
Strategy
Concerned with maximizing resource productivity within the context of the corporateand/or business strategy.
Functional strategies may be set for areas such as Marketing, Finance, R&D, HR.
Strategic Marketing Planning Process
16McDonald and Wilson, 2011
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ValueExploration
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Customer Value
The buyer chooses between different offerings on
the basis of which is perceived to deliver the most
value. Value reflects the perceived tangible and
intangible benefits and costs to the customer. Value
can be seen as primarily a combination of quality,
service and price
Kotler & Keller (2006, p25)
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Three Classes of Values
Psychological
Functional Economic
What do People Value?
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Customer value is..........
Perceived uniquely by individualcustomers
Conditional and/or contextual
Relative in comparison to alternative
offerings
Dynamic, changing with individual needs
over time.20
Characteristics of customer value
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The Value Proposition
A statement of the total set of benefits that the brand promises to
deliver
It makes clear the expected customer experience that will result
from interacting with the brand
Matching expectations with experience is achieved via the
organisations value delivery.
The brand must represent a promise about the total experience
customers can expect.
Kotler & Keller, 2006, p. 143
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Customer Insights
A fresh and not yet obvious understanding thatcan become the basis for competitor
advantage.
Source: defyingthelimits.com,
Mohanbir Sawhney, Kellogg School of Management
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Potential Customer Insights: where might theycome from? Cognition:
What do they know about our product/service? (product knowledge)
What attributes and benefits do they seek? (product attributions)
What information do they need for decision-making?
How do they learn about the product?
What is their perception of the market? (competitor brands)
Affect:
How do they feel about the product? (product attachment)
What is their perception and attitude towards the brand? (brand responses)
How do they feel about other customers? (users and non-users) Behaviour:
Who is involved in the decision-making process? Who do they refer to, who takes the decision?
What channels do they use and why?
Where do they look for information? (information seeking behaviour)
Where, when and how do they buy?
How do they use the product? How frequently do they re-purchase?
What benefit do they currently seek that it currently not being delivered by brands in the market?
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Primary Research MethodsMethods Characteristics Most often used for:
Qualitative
Face to face (depth) interviews
Focus Groups
Observation
Diary/Journal completion
Narratives
Ethnography/Netnography
Researcher involvement
Subjective
No standard probability
Detail insights into behaviours and
emotions
Provides rich data
Small samples
Usual answers the why? and how?
questions
Image analysis
Advertising pre-testing
Product testing
Concept testing
Customer behaviour
Usage & Attitude
Brand perception & Image
Quantitative
Surveys
Experiments
Measurement
Statistical probability large
Large random samples
Use of structured questionnaires
Objective
Used to test theory / hypotheses Researcher is detached
Usually answers the when? What?
How? Where? question
Tracking studies
Satisfaction surveys
Price testing
Marketing mix evaluation
Market audit data
Competitor data
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Positivism
Deductive
Experiment
Survey
Case
Study
Interview
study
Ethnography
Interpretivism
Inductive
Micro- analysis
Research
philosophy
Research
approaches
Research
strategies
Researchmethods
Data
collection
techniques
(Adapted from Saunders et al.,2003: 85)
Quantitative
Qualitative
Mixed methodsObservation
Interviews
Questionnaires
Secondary data
Sampling
strategies
Probability
Non-Probability
Dimensions of Research Design
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Value Creation:Customer Segmentation
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The Marketing Management
Planning ProcessStrategic Business Planning
Marketing Management Process
Market
Research
Macro-
Environment
Customer
Needs
Competitive
& Market
Segmentation
& TargetingProduct
PositioningMarketing Mix
Decisions
Product
Price
Place
Promotion
3 Service Ps
Strategic Marketing Tactical Marketing
Marketing Metrics, Budgets, Evaluation & Accountability
STP ~ linking
Strategy with Tactics
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Definition of a Segment
Groups of customers with similar needs
or wants and priorities
and who because of this .
seek same benefits and attach same
importance to their satisfaction.
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Segmentation, targeting, positioning
Identify variables
that allow the
market to be
segmented
Segmentation
Evaluate the
attractiveness of
each segment and
choose a targetsegment
Targeting
Identify positioning
concepts for each
target segment,
select the best,communicate.
Positioning
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DemographicsValues segmentation
Profitability modelling
Campaign Management
Lifestyle surveys
Approaches to segmentation aremany and varied
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Segmentation ~
its so simple. Divide the market into groups
Whose members are as similar as possible to each other
That are as different as possible from other groups
Segments meet these criteria
Measurable
Sustainable
Accessible
Differentiable
Actionable
~ so why is it so difficult?
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Segmentation in practice
Context dependent
prescriptive approaches can be misguided or inappropriate
Dynamic
environment is constantly changing
Demanding
demands time and attention
Implementation
relies on skills, capabilities and usually others to deliver results
Source: Palmer & Millier (2004)
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Visit SBI website to take the survey
Principles of market segmentation
Usage
Price sensitivity
Promotional response
Loyalty/ repeat purchase
Objective
Subjective
Benefits
Market Segments
Size?
Access?
Differentiated?
What is
bought
and why
Who
buys
customer /
consumer
characteristics
customer /
consumer
behaviour
Values
Attitudes
Lifestyle
Geography
Psychographics
Socio-economic &
demographic
PerceptionsPreference trade-offs
hard
soft
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Consumer Business
Geographic
Region
Climate
Region
Market
HQ, branch
Demographic
age, gender, income,
family size/stage
education
Industry (SIC code), Assets, Sales
# of employees
Psychographic
Social class
Lifestyle (VALS)
Media habits
Corporate culture
Power structure
Buyer-seller similarity
Behavioural
Benefits
Usage occasion
Usage rate
Brand loyalty
applications
urgency
size of order
existing relationships
Traditional segmentation variables
http://www.strategicbusinessinsights.com/vals/presurvey.shtmlhttp://www.strategicbusinessinsights.com/vals/presurvey.shtml -
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Toy marketing is typically
segmented clearly along both age
and gender.
Lego introduced Lego Friendsin
2012 to give it greater access to
the market for girls toys.
Even though Lego was originally
designed as a gender neutral toybecause toy store layouts are often
gender specific segments they
needed products that could be
classified as for girls.
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Example: Gender stereotypes
Examples of the
new Lego Friends
website (below)and the existing
Lego offering.
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Example: Gender stereotypes
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Key Account Segmentation:Global Tech
Koala Bears
Teddy Bears
Polar Bears
Yogi Bears
Grizzly Bears
Andropov Big
Bears
Uses an extended warranty to give them cover. Wont do anything themselves, prefer to curl-up and waitfor someone to come and fix it.
Small offices (in small and big companies). 28% of market
Lots of account management and love required from a single preferred supplier. Will pay a premium fortraining and attention. If multi-site, will require supplier to effectively cover these sites. (Protect me).
Larger companies 17% of market
Like Teddy Bears except colder! Will shop around for cheapest service supplier, whoever that may be. Full3rd-party approach. Train me but dont expect to be paid. Will review annually (seriously). If multi-sitewill require supplier to effectively cover these sites.
Larger companies 29% of market
A wise Teddy or Polar bear working long hours. Will use trained staff to fix if possible. Needs skilledproduct specialist at end of phone, not a bookings clerk. Wants different service levels to match thecriticality of the product to their business process.
Large and small companies 11% of market
Trash them! Cheaper to replace than maintain. Besides, theyre so reliable that they are probably obsoletewhen they bust. Expensive items will be fixed on a pay-as-when basis - if worth it. Wont pay for training.
Not small companies 6% of market
My business is totally dependent on your products. I know more about your products than you do! Youwill do as you are told. You will be here now! I will pay for the extra cover but you will !
Not small or very large c ompanies. 9% of market
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A tool to understand customers
A cost effective promotional vehicle
A symbol of a commitment to customers
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Three dimensional data
Data depth
Data length
Data breadth
Customer
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Each customer has a unique DNA profilederived from the products they buy
Copyright,dunnhumby
you are what you eat!
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Key Concept: Benefit Segmentation
People buy a product to satisfy a particular need
The needs (or the relative importance of needs) differs across consumers.
People assign different weights to different benefits
Needs can be functional or symbolic
Attribute 1
Attribute 2
Segment 1
Segment 2
Examples of Benefits
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Sector specific knowledge
Wide range of country knowledgeFull range of advice
Relationships
Security of choice
Affordable
Accessible
Qualified
Trustworthy
Personable
Hygiene Factors
Motivators
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Differentiating Motivator Spectra
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High LowRelationship Needs
High LowBreadth of Advice Needs
25%
75%
30%
70%
Perceptual Map(From Cross Multiplying Motivators)
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High
Relationship
Needs
Low
Relationship
Needs
High Breadth of
Advice Needs
Low Breadth of
Advice Needs
52.50%22.50%
7.50% 17.50%
Grabbers
Skittish Lovers
Addicts
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Targeting:
Factors for Selecting Target Segments Structural attractiveness:
Size
Growth rate
Profitability
Nature of competition
Bargaining power of buyers
Company objectives and resources:
Strategic fit with long-term objectives
Core competencies and capabilities
Desired relationship with customer
Select a Target Segment
High
Medium
Low
High Medium Low
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Structural
Attractiveness
Company
objectives and
resources
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The Multiple Criteria Matrix
Go ?
Go
Go
?
?
Stop
StopStop
1000
High
700
Medium
400
Low
100 1000 700 400 100
High Medium Low
Company objectives
and resources
AC
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Targeting Strategies
1.
Undifferentiate
d Marketing
2. Differentiated
Marketing
3. Concentrated
Marketing
4. Customised
Marketing
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Enablers: Data capture, CRM, technology
Barriers: 1. resources, 2. companycharacteristics and 3. customer co-operation
one-to-one marketing will play an
important role in future marketing strategybut will continue to co-exist withsegmentation strategy
Source: Dibb (2001)
Towards segments of one?
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What is Positioning?
Positioning is the unique place for our product
relative to the competition in the mind of our
customer
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Positioning Statement Format
Convince:customer segment
That:our product or service
Because:differenti l benefit
Sample PositioningStatement
[Convince]To business managers and professionals
engaged in making time sensitive decisions aboutinternational business,
[Because]its pickup, transportation and deliverysystem is wholly-owned and managed by DHL
personnel, not by third party providers.
[That]DHL delivers on time
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Examples of Positioning Statements
Appleoffers . the best personal computing experienceto students, educators, creative professionals andconsumers around the world through its innovativehardware, software and Internet offerings.
IBM for businesses who need computing solutions, IBMis the company you can trust for all your needs.
The Chrysler PT Cruiser is an inexpensive, small car, thatis versatile, fun to drive, and will appeal to active singlesand young couples with children who otherwise wouldhave bought an SUV or a minivan.
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Value Creation:The Marketing Mix
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The Marketing ManagementPlanning Process
Strategic Business Planning
Marketing Management Process
Market
Research
Macro-
Environment
Customer
Needs
Competitive
& Market
Segmentation
& TargetingProduct
PositioningMarketing Mix
Decisions
Product
Price
Place
Promotion
3 Service Ps
Strategic Marketing Tactical Marketing
Marketing Metrics, Budgets, Evaluation & Accountability
7Ps ~ tactical tools to
implement the strategy
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Marketing Mix: The 7 Pieces of thewhole
Product
Place
Price
Promotion
People
Process
Physical Evidence
Value
Creation
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Product: Customer perceived value
Packaged
Goods Motorcars Fast-food Airline
Transportation
Consulting
Babysitting
Tangible part of product
Intangible part of product
Tangible Intangible
Goods vs. Services Spectrum
Source: Shostack G.L., Breaking Free from Product Marketing, Journal of Mar keting, Vol. 41, No. 2, April 1977, American Marketing Association, p. 77.
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Product: Components of A Product
Hotel experience
Core Benefit
Basic Product
Expected Product
Augmented Product
Potential Product
http://www.capsuleinn.com/rooms_facilities.htmlhttp://www.hotelicon.com/houston-texas-hotels.phphttp://www.lemondehotel.co.uk/life/le-monde-card-edinburgh.htmlhttp://www.everland.ch/en/home/http://www.everland.ch/en/home/http://www.lemondehotel.co.uk/life/le-monde-card-edinburgh.htmlhttp://www.hotelicon.com/houston-texas-hotels.phphttp://www.capsuleinn.com/rooms_facilities.htmlhttp://www.amazon.co.uk/Girl-Dragon-Tattoo-Millennium-Trilogy/dp/B002RI9ZQ8/ref=pd_ts_zgc_kinc_341689031_1?ie=UTF8&s=digital-text&pf_rd_p=213022107&pf_rd_s=right-9&pf_rd_t=101&pf_rd_i=266239&pf_rd_m=A3P5ROKL5A1OLE&pf_rd_r=17E3TBHBHTYWFQDV8R37http://www.amazon.co.uk/Girl-Dragon-Tattoo-Millennium-Trilogy/dp/1847245455/ref=tmm_pap_title_0 -
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The Role of the Brand
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A role in B2B as well
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Product Life Cycle and Marketing Mix
Product One More
versions
Full product
line
Best sellers
Price Skimming or
penetration
Gain market
share
Defend
market share
Stay
profitable
Promotion Inform,
educate
Stress
competitive
differences
Reminder
oriented
Minimal
promotion
Place Limited,
exclusive
More outlets Maximum
outlets
Fewer outlets
BCG Growth-Share Matrix
Low
MarketGrowth
Rate
Relative marketshare
Stars Problem children
Cash cows Dogs
High
10 0.11
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star problem children
cash cow dogs
High
Low
Mar
ketGrowthRate
Relative Market Share
10 0.11
BCG Growth Share Matrix: Product Sequence
Disaster sequence
Success sequence
Cash support
Hooley et al 2004
BCG Growth-Share Matrix - Strategic Objectives
Stars
build sales and/or market
shareinvest to maintain/increase
leadership position
repel competitive challenges
Problem children
Build selectively
focus on defendable nichewhere dominance can beachieved
harvest or divest the rest
Cash cows
hold sales and/or marketshare
defend position
use excess cash to supportstars, selected problem
children and new productdevelopment
Dogs
harvest or
divest or
focus on defendable niche
High
Low
MarketGrowthRate
Relative Market Share10 0.11
Positive Cash Flow Negative
Jobber 2004
Positive
CashFlow
Negative
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Price: Cost to Customer
What the customer
gives up -
Time Effort Money
What the customer
receives - A benefit
or cluster of benefits
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Price: Value to the Customer
The
Price
Continuum
Variable
cost per
unit
Too low
price
limit
Median
price
Market
leader
price
Too high
price
limit
Pricing
Strategies
Company
Will not
make money
Consumer
Will not
buy
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Pricing Strategies
Market Penetration
Skim The Cream
Product Line Promotion
Cost Plus Pricing
Target Pricing
Price Discrimination Going Rate Pricing
Quantum Pricing
Odd Number Pricing
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Value management
VALUE
DEVELOPMENT
VALUE
COMPONENTS
VALUE
PROPOSITIONSCUSTOMER
Increase Reduce
value costMatching
process
Customer/ Company/
market needs product
resourcescapabilities
Price realisation
Product
offering
Achieve
qualifiersPalmer, 2002
NPD
Portfolio Mgmt
Business Model
StrategyChannel &
Sales Strategy
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Place: Convenience for Customer
Marketing channels can be viewed as sets of
interdependent organisations involved in the process
of making a product or service available for use or
consumption.
- Stern and El-Ansary
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Place: Distribution Channels
KEY CHANNEL DECISIONS
Vertical : how long is the channel; direct vs. multi-level
Horizontal : type of distribution; intensive, selective, or
exclusive
Locations: customer touch points; online vs. offline
LOGISTICAL DECISIONS
Inventory
Transportation
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Manufacturer or Service ProviderManufacturer or Service Provider
Customer of ConsumerCustomer or Consumer
Warehouse
Manufacturers
Warehouse
Distributor or
Retailer
Distributor or
Retailer
WholesalerWholesaler DirectDirect
Cost of raw materials
entering chain
Estimate processingand other costs
Identify cost/price
at which product leaves
this part of chain
Add raw material and processing costs,
Subtract from cost/price at which product
leaves that part of the chain
Is value created or destroyed?
Repeat for other chain elements
Identify value created and proportion of
value captured
Consider opportunities to improve
value capture
Identify Frictional costs
Can the chain be reconfigured
To be more efficient?
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Place: Also the Retail Environment
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Promotion: Communication
Promotional Strategies
Pull = Inducing consumers to ask for a product by name
thus persuading retailers to stock and pulling supplies
down through the chain
Push = Encouraging the distribution chain to stock, thus
pushing product out into the distributor network
Profile = To influence/meet stakeholders needs.
F Content Medium C
C
C
C
C
Source: Hoffman and Novak (1996)
One-to-Many Communications
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Source: Hoffman and Novak (1996)
Many-to-Many Communications
FC Content Medium Content
Content
Content
F
C
F
F
C
F
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Promotion: It is all aboutCommunication
do not forget
interactive media is now seen as
MORE that just afacilitatorof
person-to-person communication
it is a also medium that allows
people to interact with content.
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Communications Plan
Specification Of Target Segment(s)
Communications Objectives
Communications Mix
Budget Schedule
Monitoring and Evaluation
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The Communications Mix
Advertising:
TV, Cinema, Press, Radio, in-housemagazines, poster, online advertising.
Sales Promotion:
BOGOF
Discounts
Competitions
Loyalty rewards
Coupons
Goodie bags
Trade promotions
Sales force promotions
Sponsorship
Public Relations:
TV & Press releases
Crisis management
City/Finance publicity
Product placement
Direct:
Telephone, mail, email
Website
Mobile texting
Web-casting
Personal Selling:
Salesforce
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And for the Services Aspect
Add
People
Process Physical evidence
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A comparison of B2B & B2C
Industrial Products Consumer Products
Customer base: Few, with concentrated buyingpower.
Numerous, widely dispersed andlimited buying power.
Buying behaviours: (DMU)
(DMP)
Group decisions.
Many buying influences.Many purchasing procedures.
Individual and family involvement.
Impulse, planned or experiential.
Buyer/supplier relationships: Very close relationships overtime.Pre-sale consultancy and problem-solving.
After-sales services / support.
Short duration with very little closecontact.
Product: Technical complexity.Standard or customised.
Standard.Detailed specifications.
Price: High unit price.Negotiating/bidding.Standard items from list.
Low unit price from list.
Promotion: Emphasis on personal selling. Mainly mass advertising andpromotion.
Distribution/Logistics: Mainly direct for make-to-ordercustomised items.Standard items often available fromstock through distributors.
Stock items through a network ofwholesalers and retail distributors.
http://www.youtube.com/watch?v=id0uHBuhXtYhttp://www.princegeorgehotel.com/contact_us/http://www.economist.com/whichmba/2010/free-ranking-toolhttp://www.economist.com/whichmba/2010/free-ranking-toolhttp://www.princegeorgehotel.com/contact_us/http://www.youtube.com/watch?v=id0uHBuhXtY -
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81
Value Delivery
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Why relationship?
Our customer
relationships are
better than the
competition ?
Our products are better
than the competition ?
Yes
No
Yes No
I
III IV
II
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83
Why relationship?
Our customer
relationships are
better than thecompetition ?
Our products/services are
better than the competition ?
Yes
No
Yes No
I
III IV
II
Fast, painless
death
Thrive!Slow, painful
death
Slow, painful
death
84
Relationship Marketing
As a merchant youdbetter have a friend inevery town.
An ancient Middle ProverbGronroos 1994
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85
Relationship Marketing
RM involves extending traditional marketing. Three major
considerations are relevant:
1. The nature of the relationship with customers is changing. The
emphasis has changed from a transaction to relationship focus
(long-term customer retention)
2. A recognition that quality, customer service and marketing
activities are closely related and need to be brought into closer
alignment
3. A broader view of markets is emerging.
86
Focused Relationship Marketing elements
Customer
Service
Marketing
Quality
RELATIONSHIP
MARKETING
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Christopher, Payne and Ballantyne 2002
The six markets model
CUSTOMER
MARKETS
Internal
Markets
Supplier
Markets
Referral
Markets
Recruitment
Markets
Influence
Markets
Relationship spidergramIdentification of key groups in each market domain,and current vs. desired emphasis on each market
2
4
6
8
10
2
4
6
8
10
2468
10
CustomerMarkets
Supplier Markets
Recruitment Markets
Referral Markets
Influence Markets
Internal Markets
New
Existing
Source: Payne, A.F.T RelationshipMarketing : The Six Markets Model
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Relationship marketing spidergramfor British Airways
2
4
6
8
10
2
4
6
8
10
2 4 6 810
Internal
Markets
Recruitment
Markets
Influence
Markets
Supplier
Markets
Referral
Markets
New Existing
Customer
Markets
Mid 1970s
1980s2000s
Experience
Emotional
Access
Application of
Knowledge
Atmosphere
Caring
Attitude
Caring
Procedures, Processes
Communication
Sector
Differences
Individual
Outcomes
Peer-to-Peer
Relationship
Reliability
Safety
Social Impact
Supplier
Condition
Value for
Money
Value for
Time
Variety /
Choice
ProductServiceExperience
*
*
*
*
*Emphasis on attitude
The Customer Experience Model
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1. Extent of Personal Contact
2. Flexibility
3. Implicit Understanding of
Customer Needs
4. Pro-activity in Eliciting
Customers Objectives
5. Pro-activity in Checking that
Everything is OK
6. Promise Fulfilment
7. Knowledge
Important CE Factors in B2Band B2C
1. Helpfulness
2. Value for Time
3. Customer Recognition
4. Promise Fulfilment
5. Problem Solving
6. Personalisation
7. Competence
8. Accessibility
B2B B2C
1. Extent of Personal Contact
The extent to which the company deals with thecustomer through personal contact methods
2. Flexibility
How willing and able are the company to modify theiroffering in response to the customers specific needs orchanging requirements?
3. Implicit Understanding of Customer Needs
Does the company understand the context of the
customers order? Do they use their prior knowledge ofthe customer and their business to serve them better?
Important CE Factors in B2B
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Important CE Factors in B2C
1. Helpfulness
Are they really prepared to help me where nothing is
too much trouble for their staff?
2. Value for Time
Do they respect and make efficient use of my time by
shortening queues and delivering what they provide
efficiently?3. Customer Recognition
When I contact them do they recognise and
acknowledge me as an individual?
Terrorist
Dissatisfied
Customer
Client
Supporter
Advocate
Partner
Prospect Defector
Moira Clark
Clark and Baker 2004
The staircase of loyalty
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Retaining customers is extremely
profitable
Source: Bain Customer Retention Model, Bain & Company
Copyright Bain & Company
AcquisitionCost
Customer
Profit
Price Premium
Referrals
Reduced
operating costs
Increased purchases/
balance growth
Base Profit
0 1 2 3 4 5 6
Year
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Evaluating andEnhancing theValue
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The Marketing Management
Planning ProcessStrategic Business Planning
Marketing Management Process
Market
Research
Macro-
Environment
Customer
Needs
Competitive
& Market
Segmentation
& TargetingProduct
PositioningMarketing Mix
Decisions
Product
Price
Place
Promotion
3 Service Ps
Strategic Marketing Tactical Marketing
Marketing Metrics, Budgets, Evaluation & Accountability97
98
Metrics and Strategy
Metrics definition
Metrics application
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99
Three key questions
What
E.g.: Monitor sales
Why
Relativeperformance
Campaigneffectiveness
How
Market share
Sales upliftfollowing
promotionalcampaign
The Marketing Dashboard
100Source: Salesforce.com User and Developer Conference 2005
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CorporateGoals
MarketingGoals
MarketingObjectives
Marketingactivities
Planning hierarchy
Process:Identify most relevant metricsto monitor successDefine performance indicatorsfor each metricDefine data neededRevisit regularly
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MarketingDilemmas
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Marketing Ethics
Behaviour that is consistent with theprinciples, norms, and standards of business practice thathave been agreed upon by society.
Trevino L. K. & Nelson K. A. Managing Business Ethics, 4thEd. 2007.
Acting Ethically
Moral awareness recognising an ethical dilemma is present;
Moral judgement deciding what is right or wrong in the case in
question
Ethical behaviour doing the right thing in the actions that follow.
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Differentiation vs. discrimination as a strategy:
Price differentiation:
Different groups pay different amounts for the same product.
Why? Asymmetric information, time, place, branding.
Under a differentiated pricing strategy different groups could pay
the same if they had access to all market information.
Price discrimination:
Different groups mustpay different amounts for the same product.
In certain sectors (e.g. financial services) increasingly hard to
maintain price differentiation strategies where consumers can easily
access a full range of market information over the internet.
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Pricing Ethics
Examples of price discrimination in
practice:
Region encoding on DVDs.
Discounts for students / military personnel or other specific groups.
Dry cleaning (women's clothes cost typically cost more then men's
clothes).
Pharmaceuticals.
Car insurance.
Software
Is price discrimination unethical? Are there circumstances underwhich it can be ethical?
106
Pricing Ethics
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Assignment
Individual written report on a specific organisational problem or
opportunity in order to
Demonstrate your understanding and application of relevant
concepts and theories introduced in the module.
Reflect on how the ideas and concepts in the module have
informed your thinking as managers especially in the context of
other modules of the MBA
Word count is 5000 words (+20%, -10%) excluding the appendices
and references.
Assignment
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Focus on a current marketing
problem or opportunity
Propose a course of action to
deliver value
Describe the implementation
and expected impact
Assignment
Option A Elements in the report
Executive Summary
Part 1 - Identification of a
significant current
problem/opportunity (20% of
the marks)
Part 2 Proposed strategic
actions and rationale (30% ofthe marks)
Part 3 Implementation and
impact (40% of the marks)
Interdependencies and
reflection (10% of the marks)
Focus on a past marketing
problem or opportunity
Describe and critique the
course of action taken at the
time
Propose further action
Assignment
Option B Elements in the report
Executive Summary
Part 1 Analysis of a significant
past problem/opportunity (20%
of the marks)
Part 2 Critical analysis of the
past course of action (30% of the
marks)
Part 3 Future action (40% of
the marks)
Interdependencies andreflection (10% of the marks
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Keep a balance between theory and practice
Demonstrate broader reading of relevant theoretical
concepts and models
Be critical of both theories and their application
Be analytical justification, impact, interdependencies
Be specific use relevant examples
Integrate your elective pathway learning
Do not forget the reflective element
Assignment