strategic business marketing reflection
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Lecture5_s18postgrad1slide.pdf
Session 5: B2B Strategy and Planning
Lecture Outline
• Overview • Business Strategy As The Context For
Market Strategy – A Resource-Based View of the Firm – Fundamental Value-Based Strategies – Strategy Making
• Planning Strategy In Business Markets – What Do We Know? – What Do We Want to Accomplish? – How Will We Do It?
• Summary
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2
• Purchasing Orienta1on and Nego1a1on • Chapter 3
3 • B2B Rela1onships and Networks • Handout
4 • Market Sensing / Price value • Chapter 2
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• B2B Strategy and Planning • Chapter 4
6 • Managing B2B Products and Services • Chapter 5, 6
7
• Integrated B2B Marke1ng Communica1ons and Consulta1ve Selling • Handout
8 • Business Channel Management • Chapter 7
9 • Gaining and Managing Customers • Chapter 8, 10
10 • The Digital Evolu1on in B2B • Handout
11 • Exam Briefing and Poster presenta1on
Understanding Value
Crea0ng Value
Delivering Value
B2B Marke1ng Framework
1. Regard Value as Cornerstone. 2. Focus on Rela0onship Interac0on and
Networks. 3. Focus on Business Market Processes. 4. Stress doing Business Across Borders.
Guiding Principles
Chapter 4-4
How will we do it?
What do we want to accomplish?
What do we know?
Market Strategy
Resources • Core Competencies • Capabilities • Partners’ resources • Brands
Fundamental Value- Based Strategies • Product leadership • Customer intimacy • Operational excellence
Business Strategy Update BusineStrategy
Orderly advance
Radical change
Update Market Strategy
Orderly advance
Radical change
Developing Market Strategy
Business Strategy As the Cornerstone For Market Strategy
• Strategy is written more than any other topic in management practice
• What is strategy? Porter contends that firms fail to distinguish between Operational effectiveness – “means performing similar activities better than rivals perform them”
• Porter says Strategy “is the creation of a unique and valuable position, involving a different set of activities.
Porter on Strategy
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Business Strategy As the Cornerstone For Market Strategy
A Resource Based View of the Firm • The resourced based view “sees
companies as very different collections of physical and intangible assets and capabilities”.
• No two companies are alike. • Resources are the building blocks for
strategy.
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Business Strategy As the Cornerstone For Market Strategy
• Core Competencies – A core competence is “ a complex
harmonisation of individual technologies and production skills”
– As an example 3M Company has core competencies in substrates, coatings, and adhesives that it has brought together in distinct ways to create a number of successful businesses.
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Business Strategy As the Cornerstone For Market Strategy
• Capabilities – A capability is “a set of business processes
strategically understood” – i.e. Woolworth's - is an example of a
capability, which closely coordinates business processes of Woolworth's - and its strategic suppliers to provide superior inventory turns.
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B2B Brands as Resources
Overview
Definition of a Power Brand
A power brand identifies a company, product or service and has high awareness and recall with customers and is associated with a very successful global company’s.
The Power of Brands
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Advantages of Power Brands
• Improved perceptions of product performance
• Greater loyalty • Less vulnerability to
competitive marketing actions
• Less vulnerability to crises
• Larger margins • More inelastic consumer
response • Greater trade cooperation • Increased marketing
communications effectiveness
• Possible licensing opportunities
Recalling Logos We see Every Day
Quickly draw the Apple Logo without looking at your mobile i-phone or i- mac?
Students show interes1ng varia1ons on the actual design
Why were people so confident in drawing the Apple logo?
• They were influenced by what psychologists call heuris1c. “I’ve seen it many 1me I should remember it”
• Inaben1onal amnesia – where people are to preoccupied with other tasks to no1ce something else. example: famous study where subjects coun1ng basketball passes miss a man in a gorilla suit walking through the scene.
Top Brands 2017
DuPont Company
• Dacron® • Teflon® • Lycra® • Kevlar®
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Du-Pont
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IBM Company
• IBM integrates hardware, software, business consulting and IT services into business solutions to meet your goals. IBM also has strong alliances with partners to deliver business solutions.
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IBM Commerce in Ac1on
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3M Company
• Post-it® enabled 3M to develop
• Post-it® Flags • Post-it® Self
Stick Easel Pads
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3M Innova1on Culture
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Power Brands
• Assessing BRAND POWER
Source: Interbrand
BRAND DEPTH
BRAND WEIGHT
BRAND LENGTH BRAND BREADTH POWER
The influence or dominance that a brand has over its category or market (more than just market share)
Power Brands
• Assessing BRAND POWER
Source: Interbrand
BRAND WEIGHT
The stretch or extension that the brand has achieved in the past or is likely to achieve in the future (especially outside its original category)
Power Brands
• Assessing BRAND POWER
Source: Interbrand
BRAND LENGTH
The breadth of franchise that the brand has achieved both in terms of age spread, consumer types and international appeal
Power Brands
• Assessing BRAND POWER
Source: Interbrand
BRAND BREADTH
Power Brands
• Assessing BRAND POWER
Source: Interbrand
BRAND DEPTH
The degree of commitment that the brand has achieved among its customer base and beyond. The proximity, the intimacy and the loyalty felt for the brand.
Power Brands
• Assessing BRAND POWER
Source: Interbrand
BRAND DEPTH
BRAND WEIGHT
BRAND LENGTH BRAND BREADTH POWER
Nine ways to manage your brand as an asset
1. Formally link business and brand strategy
2. Create a unique and relevant Brand Identity
3. Create a clear and distinct Positioning
4. Extend your brand strategically
5. Build a strategic Brand Architecture
6. Evaluate and align touch points
7. Consistently deliver on your Brand Contract
8. Practice effective global brand management
9. Set the organization up for success
Business Strategy As the Cornerstone For Market Strategy
• Reliance On Outside Partners For Resources – Firms use collaborative relationships with
other firms to gain access to resources and to leverage their own resources.
– In a rapidly changing, technology drive markets, no one firm will possess all of the resources needed to create innovative products.
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Business Strategy As the Cornerstone For Market Strategy
Fundamental Value-Based Strategies • At the core of every successful strategy is
understanding what targeted market segments that firms regard as superior value and how to provide it to them.
• Three value based strategies product leadership, customer intimacy and operational excellence.
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Dimensions of Business Value
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Crafting Market Strategy
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Resources: Fundamental Value Based Strategies
# Core competencies # Product leadership
# Capabilities # Customer intimacy
# Partners resource # Operational excellence
# Brands
Business Strategy
Market Strategy
What do we know?
What do we want to accomplish?
How will we do it?
Orderly advance
Radical advance
Update Market Strategy
Update Business Strategy
Orderly advance
Radical advance
Knowledge
• Deliberate
• Emergent
Business Strategy As the Cornerstone For Market Strategy
• Product Leadership – Leading edge products and services that
consistently enhance the customer’s use or application of the product, thereby making rivals obsolete.
– Company pursues innovation relentlessly – Variety based positioning
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GE Avia1on
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Core Marketing Strategies: Product Leadership
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Strategic Direction Ideas to Products Skillful marketing
Systems Rewards innovation New product success
Organization Ad hoc, Organic
Flexible, Changes
Corporate Culture Experimental
Out of box thinking
Business Strategy As the Cornerstone For Market Strategy
• Customer Intimacy – Customer Intimacy “means segmenting and
targeting markets precisely and then tailoring offerings to match exactly the demand of those niches”.
– Retaining customers over time – Needs based positioning – Your share of the customers business
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Core Marketing Strategies: Customer Intimacy
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Strategic Direction Provide solutions
Improve customer’s business
Systems Measures cost of service
Customer loyalty
Organization Empowerment
Close to customer
Corporate Culture Flexible
Have it your way
Customer Service Indicators
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CBA Bank
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Business Strategy As the Cornerstone For Market Strategy
• Operational Excellence – Operational Excellence means “ providing
customers with reliable products or services at competitive prices and delivered with minimal difficulty or inconvenience.
– Dell is an example of a company that has pursued operational excellence.
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Core Marketing Strategies: Operational Excellence
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Strategic Direction Distribution
No-hassle service
Systems Standard operating
procedure
Organization Central authority
Finite empowerment
Corporate Culture Predictable
One-size-fits-all
Opera1onal Excellence
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Value Innovation
• Value innovation – instead of focusing on beating the competition you focus on making the competition irrelevant by creating a leap in value for buyers and your company
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Net Jet – Frac1onal Ownership
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Strategy Canvas of NetJets
The Four Action Framework
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Chapter 4-50
How will we do it?
What do we want to accomplish?
What do we know?
Market Strategy
Resources • Core Competencies • Capabilities • Partners’ resources • Brands
Fundamental Value- Based Strategies • Product leadership • Customer intimacy • Operational excellence
Business Strategy Update BusineStrategy
Orderly advance
Radical change
Update Market Strategy
Orderly advance
Radical change
Developing Market Strategy
Business Strategy As the Cornerstone For Market Strategy
Strategy Making • How firms develop strategy is a topic of
keen interest. • Who Makes Strategy? • Defining Purpose. • Implementing change if needed.
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Business Strategy As the Cornerstone For Market Strategy
• Who Makes Strategy? – Conventional view is that top management
make strategy – Top down Vs Bottom up – Need to promote broader involvement of
managers across the firm is preferable. – This requires a more democratic process of
strategy making.
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Business Strategy As the Cornerstone For Market Strategy
• Defining Purpose – Cornerstone of strategy making is defining
purpose in a mission or vision statement. – Purpose can also be defined as strategic
intent (Hamal and Prahalad 1992)
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Planning Market Strategy
“Chance favours the prepared mind”
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Quote- Louis Pasteur
Planning Market Strategy In Business Markets
What Do we Know? • It is important to emphasize the word
know • It is important to distinguish between
what they know, what we believe, and what we want to believe.
• We must be willing to challenge what they think we know.
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Market Information essentials for Strategic Planning in Business Markets
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Planning Market Strategy In Business Markets
What Do We Want to Accomplish? • Management team attempts to reach a shared
agreement. • Marketing strategy begins with targeting
segments and customer firms. • Setting Goals and Objectives • Positioning • Building Brands
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Positioning in Business Markets
Positioning: Establishing and (sustaining) an intended meaning for a market offering in the minds of targeted customers
Target: Succinctly characterizes the specific type of customer for the market offering that are of the most interest to the supplier
Offering Concept:
Component specifies the essential attributes of the market offering for the selected target, out of the potentially larger set of attributes that an offering might possess
Customer Value Propositions Value
Proposition: All Benefits Favorable
Points-of-Difference Resonating Focus
Consist of: All benefits customers receive from a market offering
All favorable points-of- difference a market offering has relative to the next-best alternative
The one or two points-of- difference (and, perhaps, a point-of-parity) whose improvement will deliver the greatest value to the customer for the foreseeable future
Answers the customer question:
“Why should our firm purchase your offering?”
“Why should our firm purchase your offering instead of your competitor’s?”
“What is most worthwhile for our firm to keep in mind about your offering?”
Requires: Knowledge of own market offering
Knowledge of own market offering and next best alternative offering
Knowledge of how own market offering delivers superior value to customers, compared to next-best-alterative offering
Has the potential pitfall:
Benefit assertion Value presumption
Requires customer value research
Evernote
SalesForce
Skype
Planning Market Strategy In Business Markets
How Will We Do It? • The question is about thinking through
implementation of the market strategy. • Firms can propose the most wonderful
sounding market strategies, but if they lack the requisite knowledge, skills, and abilities to put them into play, little will be accomplished.
Develop an Action Plan
• Translates the market strategy into the coordinated activities and specific resources the firm will use to attain what it wants to accomplish – Gain input from each functional area – Each objective or set of objectives is associated with a program or
programs – Coordinate various market activities
Take Stock of Implementation Skills
Interaction Skills
A manager’s behavioral style of relating to others inside and outside the firm. Captures how a manager works together with others, uses influence strategies, and negotiates.
Allocation Skills
A manager’s expertise in budgeting time, people, and money.
Monitoring Skills
Manager’s ability to stay informed about what matters and to recognize when to intervene in ongoing activities.
Organizing Skills
Captures manager’s proficiency at drawing upon or circumventing the formal organizational structure to bring together the resources to accomplish a market task.
Chapter 4-65
Competitive Position Tactics
Summary
• Crafting market strategy is the process of studying how to exploit a firm’s resources to achieve short term and long term success.
• It requires significant participation from many functional areas.
• Business Strategy involves a resource based view, product leadership or customer intimacy view of the firm.
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Summary • Radical change versus orderly advance. • Through planning market strategy members of
a management team can compare, revise and update individual market views, so as to devise alternative courses of action
• We need to ask fundamental questions such as – What do we know? – What do we want to accomplish? – How we will do it?
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