strategic marketing
DESCRIPTION
Introduction to Strategic MarketingTRANSCRIPT
2
NAVEED ILYAS Director – Global Marketing & Business Development
(Asia, Africa, Europe & North America) for IBEX Global (Formerly TRG – The Resource Group)
Visiting Faculty – Institute of Business Management Trainer – Reveal Executive Development Center &
Management Association of Pakistan Member- Harvard Business School Publishing for
Educators Co-Author - Marketing Management – cases & practices
of Pakistani corporations Winner of All Pakistan Business Plan Competition – LUMS Ex President – Marketing Society of IoBM Summa Cum Laude Award, Houston, TX Academic Excellence Awards, Houston, TX
3
Introduction Class Introduction
Name, Your job, Accomplishments, Your goal and do you manage your self (yes/no) ?
Course Outline (has been posted) Term Project Outline (will post it) Interbrand top 3 brands Interbrand Assignment Weekly Schedule Google Group
https://groups.google.com/d/forum/smp-fall2015
4
Introduction Google Group
https://groups.google.com/d/forum/smp-fall2015
5
CR C.R
Emails on Google Group Will remind me to upload the articles /
cases Will coordinate with students Will maintain the FB group if needed
6
Marketing ?
7
What is Marketing? Creating Value
For the target customers value is created by anticipating the future needs and wants of the target market, and meeting these needs.
Delivering Value To the target Market
Communicating Value Capturing Value
MARKETING IS……THE ART OF CREATING GENUINE CUSTOMER
VALUE.
MARKETING IS NOT…..FINDING CLEVER WAYS TO SELL
WHAT YOU MAKE
9
Marketing Strategy The Plan for
Creating Value Delivering Value Communicating the Value Capturing a portion of that value
If you have the same strategy as your competitor…
YOU HAVE NO STRATEGY
If your strategy can be easily copied… YOU HAVE A WEAK
STRATEGY
If your strategy is unique…..YOU HAVE A STRONG AND SUTAINABLE
BUSINESS SOUTHWEST AIRLINES
HARLEY DAVIDSON
Strategic Marketing
11
Strategic Marketing If your strategy is unique, YOU
HAVE
A clear target market and need A distinctive and winning value
proposition A distinctive supply chain to deliver it. Your costs are low You can charge premium price
Strategy has to be market driven… as the Starting Point is the consumer and the market that he is in.
However a balance has to be struck between marketing goals and Financial Performance..
Strategic Marketing
Functional Level Strategy
Business/Division Strategy
Dealing With Competitive Situations
Corporate StrategyAllocation of Resources to Business /
Division
Strategy has 3 levels
WHERE TO COMPETE ? Product-Market Investment Decision
HOW TO COMPETE ? Value Assets & Functional area Proposition Competencies Strategies
Business Strategy
Aaker’s Model
15
Aaker’s Model Product – Market Investment Strategy
Scope of Business Which products, which competitors to compete with, markets, etc. P&G – only consumer goods BASF – b2b chemicals only
Ansoff Matrix Expanding the scope of business has its rewards and risks
P&G lost half its stock value in the six months before A.G Lafley took over as CEO in 2000 because the firm invested considerable resources behind new business initiatives that disappointed or failed.
Then revived and focused back on the twelve largest brands and reducing investments on other eight brands.
Ansoff Matrix
MarketPenetration
Product Expansion
DiversificationMarketExpansion
PresentMarkets
NewProducts
PresentProducts
NewMarkets
17
Aaker’s Model (contd.) Value Proposition
Offering needs to appeal to new and existing customers. Should be sustainable. Appeal should be relevant, and meaningful to the customer.
A good value (Imtiaz) The best overall quality (Lexus) Value proposition of other brands ?
18
Aaker’s Model (contd.) Assets and Competencies
Strategic Competency This is what a business does exceptionally well For example : Customer Relationships
Strategic Asset A resource such as a brand, customer base
Strategy formulation must consider the cost and feasibility of generating or maintaining assets or competencies that will provide the basis for a sustainable competitive advantage (SCA)
Synergies
Functional area strategies and programs
19
Criteria to Select Business Strategies Is the ROI attractive Is there a sustainable competitive
advantage Will the strategy have success in the
future Is the strategy feasible
within the financial and human resources of the organization
Does the strategy fit with the other strategies of the firm (Synergy)
MARKET DRIVEN STRATEGIES
21
Market-Driven
Strategy
Becoming Market
Oriented
Distinctive Capabilitie
sCreating Value for Customer
s
Becoming Market Driven
Challenges of a New Era for
Strategic Marketing
22
Market Driven Strategies
All marketing strategy decisions should start with a
clear understanding of
Competitor
sMarket
sCustom
ers
23
Why Pursue a Market Driven Strategy Achievements of companies
displaying market – driven characteristics are impressive
Dell Southwest Airlines Zara Imtiaz Apple Café Flo Saeed Ghani
24
Market-Driven
Strategy
Becoming Market
Oriented
Distinctive Capabilitie
sCreating Value for Customer
s
Becoming Market Driven
Challenges of a New Era for
Strategic Marketing
25
Becoming Market Oriented The customer is the focal point of the
organization
There is commitment to continuous creation of superior customer value
There is involvement and support of the entire company – Holistic Marketing Concept
26
Holistic Marketing
27
Becoming Market Oriented Customer Focus
What are the customer’s value requirements? Its about starting with a customer need/wants, deciding
which needs to meet, and involving the entire organization in the process of satisfying customers.
Competitor Intelligence Failure to identify and respond to competitive threats can
create serious consequences for a company (for ex: Polaroid)
Cross Functional Coordination (Zara’s Case) Removing the walls between business functions and
working together to provide superior customer value Performance Consequences
Market orientation leads to superior organizational performances
28
Zara’s Cross Functional FeatureThe Zara boutique is buzzing on Calle Real in the rain northern Spanish city of La Coruna. Customers are buying out the newly designed red tank tops and black blazers, but they are pining for beige and bright purple ones, too. Most fashion companies would need months to retool and restock. Not Zara. Every Saturday the store manager pulls out a Casio handheld computer and types in orders for new clothes. They arrive on Monday.
Zara is the Dell Computer Inc. of the fashion industry. The Spanish star is using the Web to churn out sophisticated fashion at budget prices, turning the industry’s traditional fashion cycle completely on its well coiffed head.
29
Zara’s Cross Functional FeatureNow , a new design can go from pattern to store in two weeks, rather than six months.
Traditionally ,fashion collections are designed only four times a year. And major retailers outsource more of their production to low cost subcontractors in far off developing countries such as China. Zara ignores the old logic. For quick turnaround, it makes some two thirds of its clothes in a company owned facility in Spain, restocks stores around the globe twice a week, and continually redesigns its clothes – an astounding 12,000 different designs a year.
30
Zara’s Cross Functional FeatureHere’s how Zara does it:
A store manager sends in a new idea to La Coruna headquarters. The 200 plus designers decide if it’s appealing, then come up with specs. The design is scanned into a computer and zapped to production computers in manufacturing, which cut the material needed to be assembled into clothes by outside workshops. The manufacturing plant is futuristic, too, stuffed with huge clothes – cutting machines that are run by a handful of technicians in a laboratory style computer control center.
31
Market-Driven
Strategy
Becoming Market
Oriented
Distinctive Capabilitie
sCreating Value for Customer
s
Becoming Market Driven
Challenges of a New Era for
Strategic Marketing
32
Distinctive Capabilities
“Distinctive Capabilities (competencies)” are skills and accumulated knowledge, exercised through organizational processes, that enable firms to coordinate activities and make use of their assets.”
33
Distinctive Capabilities Southwest Airline's Distinctive
Capabilities Southwest uses a point-to-point route
system rather than the hub-and-spoke design used by many airlines.
The carrier’s value proposition consists of low fares and limited services (no meals).
Low Operating costs by using only Boeing 737 aircraft
ECONOMY CLASS ONLY No baggage transfer to other airlines
34
Logic of DistinctiveCapabilities
Offer Disproportionate (higher) contribution
to superior customer value
Provides value to customers on a more cost-effective
basis
* to compete in new markets
* Create market entry barriers to potential competitors
35
DistinctiveCapabilities
are
Applicable to Multiple
Competition Situations
(not always)
Difficult toDuplicate
Superior to the
Competition
36
Distinctive Capabilities Apple’s iPhone
Zara
Saeed Ghani?
37
Name of the game is ! To Pursue value opportunities that match its distinctive capabilities
Value Requirement
s
Distinctive Capabilities
38
Market-Driven
Strategy
Becoming Market
Oriented
Distinctive Capabilitie
sCreating Value for Customer
s
Becoming Market Driven
Challenges of a New Era for
Strategic Marketing
39
Creating Value for Customers
An organization’s distinctive capabilities are used to deliver value by differentiating the product offer, offering lower prices relative to competing brands, or a combination of lower cost and differentiation.
40
Creating Value for Customers
ValueTo
TargetCustomer
PriceProposition(BENEFITS)
41
Image value
Personnel value
Services value
Product value
Totalcustomer
value
Monetary cost
Time cost
Energy cost
Psychic cost
Totalcustomer
cost
Customerdelivered
value
42
Market-Driven
Strategy
Becoming Market
Oriented
Distinctive Capabilitie
sCreating Value for Customer
s
Becoming Market Driven
Challenges of a New Era for
Strategic Marketing
43
MARKET – DRIVEN
STRATEGIES
Market Sensing Capabilities
Customer LinkingCapabilities
44
Becoming Market Driven Market Sensing Capabilities
Effective process for learning about markets Collecting information needs to be shared
across functions and interpreted to determine proper actions
Customer Linking Capabilities Creating and maintaining close customer
relationships Customer linking also reduces the possibility
of a customer shifting to another suppliler.
45
Market-Driven
Strategy
Becoming Market
Oriented
Distinctive Capabilitie
sCreating Value for Customer
s
Becoming Market Driven
Challenges of a New Era for
Strategic Marketing
46
Challenges of a New Era Turbulent markets Intense competition Disruptive Innovations (self
cleaning windows, iron free shirts) Escalating customer demands Globalization (outsourcing trends)
47
Next Session Market and Competitive Space Case Study session – Competition
Must read before coming to the class Periodic Quiz may be taken
48
Thank you