lecture 05 linking strategies
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Linking Strategies
5G3190 DMCMDavid Edmundson-Bird
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Linking Strategies
• So what’s the problem?– You have to produce a digital marketing strategy
poster– You have to create an effective market segmentation
exercise– You have to evaluate digital market segment
attractiveness– You have to produce a positioning approach– You have to discuss the role of the digital marketing
mix in your digital marketing programme
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Linking Strategies
• So what do you need to learn?– How we re-link business strategy and marketing
strategy– What traditional marketing strategy is all about– What the different digital marketing scenarios are– How one might consider a pure-play digital
marketing strategy– How one might consider a bricks-and-clicks digital
marketing strategy
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RE-LINKING SBU STRATEGY & MARKETING STRATEGY
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The Link between SBU Strategy & Marketing Strategy
• SBU Strategy gives you the context in which to make marketing strategy decisions
SBUStrategy
SBUStrategy
MarketingStrategy
MarketingStrategy
GUIDANCEBENCHMARKSDIRECTION
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Ensuring Linkage between SBU & Marketing Strategies
• For marketing strategy to work, it must be aligned with SBU Strategies in 4 ways
“FIT” BETWEENTHE STRATEGIES
“FIT” BETWEENTHE STRATEGIES
IMPLEMENTATIONALIGNMENT
IMPLEMENTATIONALIGNMENT
RESOURCEALIGNMENT
RESOURCEALIGNMENT
ACTIVITYALIGNMENT
ACTIVITYALIGNMENT
GOALALIGNMENT
GOALALIGNMENT
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Goal Alignment
• Strategic, financial & customer goals of SBU and marketing must be aligned
• What stops this?– Business strategy changes quickly– SMT and Marketing don’t communicate– No one checks to see they are aligned
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Resource Alignment
• There have to be resources provided for marketing by the SBU
• What stops this?– SBU level constraints that underestimate
marketing resources required for far-reaching marketing objectives
– Inability to justify increase in marketing expenditure
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Activity Alignment
• For marketing to work, other parts of the SBU must experience a consistent change in activities (recruitment, customer service, fulfilment)
• What stops this?– No coordination between functions and activities– Activities are not explicitly mapped onto
objectives
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Implementation Alignment
• Poor implementation can undermine a good marketing strategy even if the other three are fine
• What stops implementation alignment?– Poor timing– Poor resources to implement
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WHAT IS TRADITIONAL MARKETING STRATEGY ALL ABOUT?
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Key Concepts
• Remember what the 3 key components of a marketing strategy are?
Marketing StrategyMarketing Strategy
SEGMENTINGSEGMENTING TARGETINGTARGETING POSITIONINGPOSITIONING
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Marketing Strategy Decisions
• Marketing strategy = segmentation + targeting + positioning choices
• Taken to market through 4 elements of the Marketing Mix
Price
Product
Distribution
Promotion
Position& TargetMarket
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Example: Positioning by Segment
THE CAR
FOR
PEOPLE
WHO
WANT
ADVENTURE
TH
E C
AR
TH
AT
’S S
AF
EF
OR
TH
EFA
MIL
Y
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How do we Prioritize Segments?
SEGMENTATIONPRIORITISATION
Buyer ReadinessBuyer Readiness
Attitude of BuyerAttitude of Buyer
Current Trend/Mkt LeadersCurrent Trend/Mkt Leaders
Willingness to PayWillingness to Pay
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WHAT ARE THE DIFFERENT DIGITAL MARKETING SCENARIOS?
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Marketing Strategy Formulation
• 2 Obvious distinctions– Pure-play and Bricks-and-Clicks
• Similar path for marketing strategy development– But some subtle, important differences
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Marketing Strategy Formulation
DIGITALSBU
STRATEGY
DIGITALSBU
STRATEGY
MARKETINGSTRATEGY FOR
DIGITALBUSINESS
MARKETINGSTRATEGY FOR
DIGITALBUSINESS
INTEGRATEDMARKETINGSTRATEGY
INTEGRATEDMARKETINGSTRATEGY
SBUSTRATEGY
- digital- real world
- overall
SBUSTRATEGY
- digital- real world
- overall
MARKETINGSTRATEGY FOR
DIGITALBUSINESS
MARKETINGSTRATEGY FOR
DIGITALBUSINESS
MARKETINGSTRATEGY FORREAL WORLD
BUSINESS
MARKETINGSTRATEGY FORREAL WORLD
BUSINESS
PURE PLAYBRICKSANDCLICKS
Choices:- Segmentation- Target market- Positioning
Choices:- Same or different segmentation- Same or different target market- Same or different positioning
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PURE PLAY DIGITAL MARKETING STRATEGY
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Bases for Segmentation in Pure Plays
• Segmentation divides the market into useful sub-units of similar consumers based on:– Demographics– Geography– Psychographics
• Personality characteristics/attitudes (values, emotional responses and ideological beliefs) affecting lifestyle and purchasing behaviour
– Cognitive & behavioural attributes
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Effective Segmentation for Pure Plays
• If segmentation is going to be effective, it has to be:– Meaningful
• Needs to explain why customers act in a certain way
– Actionable• Can implement against the segment
– Financially Viable• Is a profitable segment
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Selecting Target Markets for Pure Plays
• Targeting is about seeking the most attractive (sub) units:– Segment size/growth
• Size now and potential size in 1, 2, 5 years
– Structural attractiveness• Does the segment offer profitable entry to exploit?
– Organisational resources• Does/could the organisation have the capability to
meet the segment requirements?
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Positioning for Pure Plays• Positioning describes benefits to the target in their language –
maybe just about one aspect of the product– Feature Positioning
• “Our product does this”
– Benefit Positioning• “Ours is the cleanest product in the world”
– Usage Occasion Positioning• “We deliver products for birthdays”
– User Category Positioning• “Our product is good for families with young children”
– Competitive Product Positioning• “Our product works faster than product x from company y”
– Product-class Positioning• “Our products are precision-built products”
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Positioning Plan for Pure Plays
• How a positioning strategy becomes a positioning plan
Compare newactual position
withideal position
Select andimplement themost promising
choice
Develop alternatestrategies
for achievingideal product
position
Determine idealproduct position
Identify actualproduct positioning
Use a perceptualmap to identifyvariables thatmatter tobuyerswhen they makepurchases
Identify the mostfavorable placementon the perceptualmap that theproduct shouldoccupy
Generatealternatives foreitherrepositioning toreach ideal stateor the introductionof a new product
Choose plan thatis mostconsistent withthe organization'sobjectives,resources andstrengths
Evaluates outcomeof positioningefforts
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Perceptual Maps: CarsPRICE
LEVEL OFDESIGN
Low High
Low
High
i
ed
ca
b
f
h
j
g
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Perceptual Maps: Preference and Opportunity Segments
PRICE
LEVEL OFDESIGN
Low High
Low
High
i
ed
ca
b
f
h
j
g
UNMETNEED
UNMETNEED
UNMETNEEDUNMET
NEED
UNMETNEED
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BRICKS-AND-CLICKS DIGITAL MARKETING STRATEGY
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Segmentation ScenariosCHANGE IN SEGMENTATION CHARACTERISTICS
due to emerged Digital marketplace
CHANGE IN SIZEof marketsegments
YES
YES
NO
NO
No changeMarket getsreclassified
Marketexpansion
Marketexpansion &reclassification
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Segmentation for Bricks-and-Clicks
• Segmenting digital customers will have one of 4 results– No change
• The customers are already digital customers– Market expansion
• Digital opportunity expands organisation’s reach beyond real-world constraints
– Market gets reclassified• Digital customers needs differ from real-world customers
– Reclassified expansion• Characteristics and size of digital customer base differ from real-
world customer base
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Targeting for Bricks-and-Clicks• Strategies for targeting can be broken into 4 types
– Carpet Bombing• Digital capability is a product/service enhancement that will
appeal to all target customers– Beachhead Targeting
• Digital capability is a product/service enhancement that will only appeal to a subset of target customers
– Bleed-over Targeting• Digital capability appeals to a new customer segment as well as
the existing real-world customer base– New Opportunity Targeting
• Digital capability only appeals to a new customer segment
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Bricks-and-Clicks Targeting Scenarios
SAME CUSTOMERS DIFFERENT CUSTOMERSENTIRE CURRENTSEGMENT
PORTION OF CURRENTSEGMENT
Carpet bombing
Beachhead targeting
New opportunity
Bleed-over targeting
Serve new segmentdigitally
Serve new segmentand some of existingreal-world segmentdigitally
Serve sameexisting real-world
segment digitally
Serve portion ofexisting real-world
segment digitally
CUSTOMER HOMOGENEITY
FO
CU
S O
F E
FF
OR
T
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Bricks-and-Clicks Positioning Scenario Guidelines
SAME CUSTOMERS DIFFERENT CUSTOMERSENTIRE CURRENTSEGMENT
PORTION OF CURRENTSEGMENT
Carpet bombing New opportunity
CUSTOMER HOMOGENEITY
FO
CU
S O
F E
FF
OR
T
Beachhead targeting Bleed-over targeting
Borrow heavily fromexisting real-worldpositioningTout advantages of Digitale.g. convenience andaccessibility
Completely repositionPosition differentiationsthat cater to the newsegment
Borrow from existingreal-world positioningFocus more on needs ofthe smaller groupStress value-add of theDigital Proposition
Use dual positioningLeverage existingpositioningPosition added benefits,such as augmentedofferings via digitalpropositione.g. increased productcustomizability
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Summary
• We’ve looked at how we re-link business strategy and marketing strategy
• We’ve considered what traditional marketing strategy is all about
• We’ve explored the different digital marketing scenarios
• We’ve looked at how one might consider a pure-play digital marketing strategy
• We’ve looked at how one might consider a bricks-and-clicks digital marketing strategy