Marketing Strategy

MARKETING STRATEGY SESSION 5 with Dr. Brent Smith

AGENDA

¢ Articles � Market-Driven v Driving Markets

by Bernard Jaworski, Ajay K. Kohli, and Arvind Sahay � Marketing Myopia

by Theodore Levitt

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MARKET BASED VIEW MARKET-DRIVEN VS. MARKET-DRIVING

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¢ Accept market behavior(s).

¢ Accept market structure(s).

¢ Possibly accept market structure.

¢ Study currents of market behavior.

¢ Try (gradually) to shift market structure.

¢ Try (gradually) to shift market behavior.

¢ Change the game (paradigm) in ways that leverage resource base, runway, etc.! � Via style of play � Via tempo

Market-driven companies Market-driving companies V

al ue

P ro

p o

si ti

o n

(1) Competency

(2) Competitive Advantage

(3) Sustainable Advantage

Market

MARKET BASED VIEW MARKET DRIVEN V. DRIVING MARKETS: SOME EXAMPLES

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¢ Learn consumers’ wants, needs, desires, and trajectories thereof.

¢ Create good products.

¢ Develop quality relationships with evidence of:

� learning

� lasting

� loyalty

¢ They are market-driven and more!

¢ Apple: iPod, iTunes, iPhone, iPad,…

¢ Amazon: .com, devices, 1-click, Prime, Whole Foods, multiple delivery options

¢ Beer: promotion (brands, cold temps, situational context for consumption)

¢ Wal-Mart: Everyday Low Prices (EDLP)

¢ Vanguard: ETFs

¢ T-Mobile: Unlim. mins., termination fees

¢ Blockbuster < Netflix ≤ Comcast (?)

� Think → Travel → Browse → Rent → … → View → Travel → Return

� Stream

Market-driven companies Market-driving companies (Game-changers)

MARKET BASED VIEW MARKET DRIVEN V. DRIVING MARKETS

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¢ Step 1: Learning customers (M-D).

¢ Step 2: Changing game (D-M)!

¢ Amazon, Apple, Uber, … � Foster smart value-intensive

paradigms and platforms for their consumers, partners, and others.

Shaping market behaviors

¢ IKEA: Mapped route → Many rooms ¢ Apple: Music → Accessible + audible ¢ Amazon: Prime, Dash, Alexa,…

¢ Kayak: Shop using metasearch.

¢ Southwest: Buy tickets from only us.

¢ Deconstructionist � Typical marketing channel:

¢ M → W → R → C Manufacturer → Wholesaler → Retailer → End Customer

� Dell: M → C � iTunes: M → R → C � Vertical (Horizontal) Integration

¢ Constructionist � iTunes + YouTube + Uber + Uber Eats � Gaming systems: Consoles + Games

Driving markets 2 of 3 ways to shape structure

TRANSLATING RBV AND MBV INTO VALUE

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¢ Value

� Market Offering > Product

� Solution > Product

¢ Learning

¢ Resource Based View

� Stocks

� Flows

¢ Market Based View

� Market-driven

� Market-driving

¢ Competency (1)

� What firm has or does well.

� “Par for the course.”

¢ Competitive Advantage (2)

� What firm has or does better.

¢ Sustainable Competitive Advantage

(3)

� Enduring

� Highly inimitable

� If imitable, protected in market.

¢ ©, patent, trademark, etc.

¢ Orientations to the Marketplace

� Relationship value

� Deliverables: Learning, loyalty,…

Basic Concepts

Evidence

Evid ence

Evidence

MARKETING MYOPIA ¢ The marketing effort is still viewed as

a necessary consequence of the product – not vice versa, as it should be. That is the legacy of mass production, with its parochial view that profit resides essentially in low- cost full production.

-- Theodore Levitt, Marketing Myopia

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Questions: 1. Where do you see evidence of

marketing myopia today? 2. How can one relate marketing

myopia to the BCG matrix and portfolio management?

MARKETING MYOPIA RECALL: LOCATE AND LEVERAGE (FIRM’S) UTILITY

¢ Strategists should understand orientations to the marketplace (4Ps, 4Cs, SIVA)

¢ They also should understand how value can be defined, operationalized, and differentiated.

¢ Utility provides one basis for creating basic value for end customers � Place utility: movie theaters � Time utility: in-app estimated delivery time for product shipment or food order � Form utility: music as audio product versus physically formatted one � Information utility: intelligent assistants responding with news, weather, traffic � Experiential utility: automated reorder of replenishment-type products

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MARKETING MYOPIA ¢ Every major industry was once a growth industry.

¢ How one defines industry or market can help (hinder) strategic responses to: � business environment (enablers / disablers; opportunities / threats) � competitors � substitutes and alternatives � consumers and market opportunities

¢ Mass production goals generally lead to selling > marketing.

¢ Survival + Long-Term Prosperity/Thriving > Growth � Firm’s successes and failures are attributable to senior management.

Re: RBV and MBV (driving or driven?)

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MARKETING MYOPIA re: Five Things, Five Creatures Lesson, Bezos’ runway

¢ Leaders of industry and/or an individual organization must have discipline to value success and understand its potentially short life: � Temporality

¢ Wave’s crest offers a signal about its decline/expiration � Sense, find, engage, and deliver

¢ What are the next and best market opportunities (for us / for rivals)? � Value: solution > products

¢ What problem(s) do you solve? ¢ Caution: features < benefits

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MARKETING MYOPIA

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Acknowledge that alternatives exist!

¢ Re: Types of competition � Brand � Product � Generic � Total budget

And beyond those four types of competition:

Examples

¢ Dry cleaners (numbers) � Synthetic fabrics

¢ Railroads (methods) � Paved roads � Automobiles

¢ Ownership (tangibility/experience) � Rental for access � Re: Utility of form/time/etc.

MARKETING MYOPIA Discussion

¢ Salesforce CEO Marc Benioff buys TIME Magazine for $190 million Link: https://www.businessinsider.com/salesforce-ceo-marc-benioff-beginners-mind-2018-9

“I kind of try to let go of all the things that have ever happened so far in our

industry, which is a lot of stuff, and just go, OK, what's going to happen right

now?” – Marc Benioff, CEO, Salesforce (WSJ, 2016)

Questions:

1. What are your thoughts regarding a ”beginner’s mindset” mentioned by Benioff?

2. How can that mindset help an organization avoid marketing myopia? Have you

worked for and been a customer of such an organization?

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MARKETING MYOPIA ¢ Situating some key paradigms featured so far:

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Resource Based View

Five Things

Marketing Myopia

Five Creatures

Market Based View

MARKETING STRATEGY ¢ Re: RBV and MBV can inform organization’s POV and approach to customers.

¢ How might symptoms of marketing myopia be observed in company practices?

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