Strategic Marketing

INTRODUCTION

Strategic Marketing & Planning

Naveed Ilyas | naveed.ilyas@hotmail.com

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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

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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

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Introduction Google Group

https://groups.google.com/d/forum/smp-fall2015

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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

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Marketing ?

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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

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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

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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

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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

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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 ?

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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

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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

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Market-Driven

Strategy

Becoming Market

Oriented

Distinctive Capabilitie

sCreating Value for Customer

s

Becoming Market Driven

Challenges of a New Era for

Strategic Marketing

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Market Driven Strategies

All marketing strategy decisions should start with a

clear understanding of

Competitor

sMarket

sCustom

ers

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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

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Market-Driven

Strategy

Becoming Market

Oriented

Distinctive Capabilitie

sCreating Value for Customer

s

Becoming Market Driven

Challenges of a New Era for

Strategic Marketing

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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

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Holistic Marketing

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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

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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.

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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.

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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.

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Market-Driven

Strategy

Becoming Market

Oriented

Distinctive Capabilitie

sCreating Value for Customer

s

Becoming Market Driven

Challenges of a New Era for

Strategic Marketing

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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.”

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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

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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

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DistinctiveCapabilities

are

Applicable to Multiple

Competition Situations

(not always)

Difficult toDuplicate

Superior to the

Competition

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Distinctive Capabilities Apple’s iPhone

Zara

Saeed Ghani?

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Name of the game is ! To Pursue value opportunities that match its distinctive capabilities

Value Requirement

s

Distinctive Capabilities

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Market-Driven

Strategy

Becoming Market

Oriented

Distinctive Capabilitie

sCreating Value for Customer

s

Becoming Market Driven

Challenges of a New Era for

Strategic Marketing

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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.

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Creating Value for Customers

ValueTo

TargetCustomer

PriceProposition(BENEFITS)

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Image value

Personnel value

Services value

Product value

Totalcustomer

value

Monetary cost

Time cost

Energy cost

Psychic cost

Totalcustomer

cost

Customerdelivered

value

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Market-Driven

Strategy

Becoming Market

Oriented

Distinctive Capabilitie

sCreating Value for Customer

s

Becoming Market Driven

Challenges of a New Era for

Strategic Marketing

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MARKET – DRIVEN

STRATEGIES

Market Sensing Capabilities

Customer LinkingCapabilities

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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.

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Market-Driven

Strategy

Becoming Market

Oriented

Distinctive Capabilitie

sCreating Value for Customer

s

Becoming Market Driven

Challenges of a New Era for

Strategic Marketing

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Challenges of a New Era Turbulent markets Intense competition Disruptive Innovations (self

cleaning windows, iron free shirts) Escalating customer demands Globalization (outsourcing trends)

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Next Session Market and Competitive Space Case Study session – Competition

Must read before coming to the class Periodic Quiz may be taken

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Thank you