The Customer-Company InteractionMKT628 – Prof Viar
The Importance of Strategy
• To know where you’re going– Would you tell me, please, which way I ought to go from here? asked Alice.– That depends a good deal on where you want to get to, said the Cat.– I don’t much care where, said Alice.– Then it doesn’t matter which way you go, said the Cat.
» (Carroll, AAinW)
• To not get there alone– With others in the organization– Profitably…
• To outlast your competition
Types of Planning
• Strategic Planning (where do you want to go?)
– Firm-level thinking– Overarching goal of long-run survival– Relationship of firm to environment
• Marketing Planning (how are you going to get there?)
Strategic marketing– Product/market scope of a business– Where, when and how to compete
Marketing management (what do you have to do to follow that path?)
– ==> marketing plan (set of tactics)
The Role of Strategic Marketing
• Within an SBU– Strategic business unit (SBU) a unit of the company that has a separate
mission and objectives and that can be planned independently from the other businesses. An SBU can be a company division, a product line or even individual brands - it all depends on how the company is organized.
• Across the PLC– Product Life Cycle (PLC), the course of a product's sales and profitability
over its lifetime. The model describes five stages, each of which represents a different opportunity for the marketer:
– - Development– - Introduction– - Growth– - Maturity– - Decline
• For the WWW– Internet complicates planning
• Internet time issues• Global reach issues (new segments)• Convergence issues (online and offline)
The Purpose of Planning
• Two primary activities– Defining opportunities and objectives
• “What should we do?”
– Leveraging resources• “How should we do it?”
• Goal of competitive advantage– Profitable, Unique, Sustainable
Competitive Advantage and the Internet
• Defining opportunities (Planning)– Consumers– Competition– Conditions (environment, company, technology)
• Leveraging resources (Implementation)– Content– + Channel– + Communication
• Virtual Value Proposition
The Shape of Marketing Planning
STRATEGY
MARKETING PROCESSES
BUSINESS MODEL
PLANNING
DOING
The Internet Affects Planning
• Motivation for planning
• Processes for planning
• Outcomes of planning– Objectives (So, what’s your strategy?)– Business model (OK, how’re you going to do
that?)
• The e-Business Activity Pyramid
The Internet Affects Implementation
• Change issues– From revolution to evolution
• Changing technologies• Changing customers and companies
• Convergence issues (when worlds collide)– Customerization (when/how to customize)– Communities (need for social interaction)– Channels (managing multiple sources)– Competitive Value (defining benefits)– Choice (demanding, powerful consumers)
What’s Your Model?
• Many web business models: simplify…– Product focus
• Brand image• Product enhancement
– Revenue focus• Sales increase• Other revenue…
Building a better model
• Key ingredients– Traditional models
• Customer benefits• Delivery architecture• Revenue stream
– Web-based effect• Customer-company interaction
– New targets, self-segmentation– Relationships (1:1)– Customer Relationship Management (CRM)
The Value Proposition
• Product innovation focus– Image (brand building)– http://disney.go.com/park/homepage/today/flash/index.html?clk=1004398
– Incentive (cost benefits) – Improvement (neat extras)
http://www.pg.com/docYourhome/docCrest/directory_map.html;$sessionid$GK1EIJAAAGCHNTCHEC1SQ1Q
The Customer-Company Interaction
• The value of information– Profiling– Personalization
• The value of intermediaries
• The value of results– Trust– Loyalty
The Infrastructure
• Value Chain Configuration
• Strategic partnerships and alliances
• Firm-level assets– Tangible (Facilities, cash, equipment)– Intangible (IP)– Human (Intellect, skills)
The Revenue Stream
• Revenue focus– Traditional (consumer pays)
• Sales (marketer and consumer)• Usage-based fees• Content “rental” (subscription fees)
– Less traditional (marketer pays)• ABC’s (Alliances, banners, content
sponsorship) • Commissions and click-through’s
Uncovering the Value Proposition
• Defining opportunities– Marketing research (next class)
• Understanding consumers• Understanding competitors• Understanding conditions (internal and external)
• Leveraging resources: implementation and control (after next class, plus 3)
– Marketing management with a twist– New resources: content, channel, communication
Questions?