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?