STRATEGIC MARKETING

Dr Baskin Yenicioglu
Dr Nikoletta Siamagka
29-30 April 2012

www.henley.reading.ac.uk

Learning Outcomes of the Workshop

This workshop will:
Develop knowledge and understanding of marketing concepts.
Provide opportunities to analyse marketing problems.
Encourage decision making through practice and enable you to apply
marketing principles.
Provide an understanding of marketing planning.
Provide a practical opportunity to develop professional skills in
marketing: teamwork, analysis, research, presentations and decision
making.
Help you prepare for the assignment and the exam.

Module Structure

What is Marketing?

Marketing is
the management process responsible for
identifying, anticipating and satisfying customer
requirements profitably.
Chartered Institute of Marketing

is the activity, set of institutions, and processes

for creating, communicating, delivering, and
exchanging offerings that have value for customers,
clients, partners, and society at large.
American Marketing Association

As a Philosophy
Marketing..It encompasses the entire
business. It is the whole business seen
from the point of view of its final result,
that is from the customers point of view.
(P.F.Drucker, 1954)

Be Customer Centric
There is only one valid definition of
business purpose: to create a customer.
Peter. F. Drucker (1954)

the purpose of marketing: to create a

valuable customer experienceyour
customers will thank you for it, stay
loyal, and pay a premium.
B Schmitt (1999)

Market Orientation

Intelligence Generation

Intelligence Dissemination

Organisation-wide Responsiveness

Competitor Orientation

Customer Orientation

Interfunctional Co-Ordination

Ajay Kohli & Benard Jaworski

Market Driven vs. Market Driving?

Market Driven

Market Driving

General

Organisations respond to activity

within existing known market
parameters

Organisations act to create change in

existing market structures and the
behaviours of customers and
competitors

Customer Orientation

Adaptation

At the cutting edge of new customer

needs and wants

Identifying, analysing and

answering to the customer

Predicting which technologies

are likely to be successful given
customer needs and wants

Shape customers behaviour

proactively
Pioneer

Respond to market structure

Competitor Orientation

Continuous benchmarking

Predict the evolution of customer

needs and market boundaries

Imitating others

Shape market structures proactively

Identify difficult to imitate internal and
external competencies
Discontinuous disruption

Adapted from: Hollensen S. Marketing Planning A Global Perspective. Mcgraw Hill. 2005. Pg. 29.

External effects on consumer trends

Climate change and environmental concerns
World power re-balancing
Demographics and changes in family composition
Levels of education
Role of technology
Generational changes
Surveillance society
Culture of immediacy and gratification
To name but a few
(Source: The Future Foundation)

A Typology of Market Evolution

Customer Market Power

Low
Producer
Market Power
High

Low

High

(1) Benign
CoExistence

(3) Customer
Supremacy
(Service
Economy)

(2) Industrial
Revolution
(Mass
Production
Economy)

(4) Strong
Interaction
(Emerging
Information
Paradigm)

Modified from Beyond Market Orientation: A conceptualisation of Market Evolution, with Pierre Berthon and
Morris B. Holbrook, Journal of Interactive Marketing, Summer, 2000

11

Strategic
Marketing
Planning

The Marketing Management

Planning Process
Strategic Business Planning
Marketing Management Process
Market
Research

Segmentation
& Targeting

Product
Positioning

MacroEnvironment

Marketing Mix
Decisions
Product
Price

Customer
Needs

Place
Promotion

Competitive
& Market

3 Service Ps
Strategic Marketing

Tactical Marketing

Marketing Metrics, Budgets, Evaluation & Accountability

13

Planning provides
Marketing planning is: the planned application of marketing resources to
achieve marketing objectives (McDonald, 2004).
It provides:
An in-depth investigation of the market and identification of the
source of
competitive advantage
Clarity and agreement internally regarding the objectives, strategy and
tactics for the product (we all know where we are going and what we
are doing)
A statement of the resources required in order to achieve the stated
objectives
Commitment and support internally from all relevant departments
A public statement that can be used to brief and direct all those
involved in the implementation process.

Hierarchy of Strategies

Corporate
Strategy

Business
Strategy

Functional
Strategy

Sets out the organizations overall direction for growth/competitive advantage and the
management of its various businesses and product lines within its portfolio
Describes the areas of business in which the company is to be involved and the financial
and human resource to support this.
Goals and objectives in relation to revenue growth, profitability, ROI, earnings per share,
contribution to stakeholders.
Developed at business unit or divisional level, sets out the products and markets the
organization is in within the business or industry.
Describes the means for achieving competitive advantage, how its SBUs should compete
or co-operate within the industry
Goals and objectives in relation to sales growth, new product or market growth ,
profitability, cash flow or basis for competitive advantage.

Concerned with maximizing resource productivity within the context of the corporate
and/or business strategy.
Functional strategies may be set for areas such as Marketing, Finance, R&D, HR.

15

Strategic Marketing Planning Process

McDonald and Wilson, 2011

16

Value
Exploration
17

Customer Value
The buyer chooses between different offerings on
the basis of which is perceived to deliver the most
value. Value reflects the perceived tangible and
intangible benefits and costs to the customer. Value
can be seen as primarily a combination of quality,
service and price
Kotler & Keller (2006, p25)

18

What do People Value?

Three Classes of Values

Psychological

Functional

Economic
19

Characteristics of customer value

Customer value is..........

Perceived uniquely by individual
customers
Conditional and/or contextual
Relative in comparison to alternative
offerings
Dynamic, changing with individual needs
over time.
20

(Source: Holbrook 2005)

10

The Value Proposition

A statement of the total set of benefits that the brand promises to
deliver
It makes clear the expected customer experience that will result
from interacting with the brand
Matching expectations with experience is achieved via the
organisations value delivery.

The brand must represent a promise about the total experience

customers can expect.
Kotler & Keller, 2006, p. 143

21

Customer Insights

A fresh and not yet obvious understanding that

can become the basis for competitor
advantage.

Source: defyingthelimits.com,
Mohanbir Sawhney, Kellogg School of Management

22

11

Potential Customer Insights: where might they

come from?

Cognition:

What do they know about our product/service? (product knowledge)

What attributes and benefits do they seek? (product attributions)

What information do they need for decision-making?

How do they learn about the product?

What is their perception of the market? (competitor brands)

Affect:

How do they feel about the product? (product attachment)

What is their perception and attitude towards the brand? (brand responses)

How do they feel about other customers? (users and non-users)

Behaviour:

Who is involved in the decision-making process? Who do they refer to, who takes the decision?

What channels do they use and why?

Where do they look for information? (information seeking behaviour)

Where, when and how do they buy?

How do they use the product? How frequently do they re-purchase?

What benefit do they currently seek that it currently not being delivered by brands in the market? 23

Primary Research Methods

Methods

Characteristics

Most often used for:

Qualitative

Researcher involvement

Image analysis

Face to face (depth) interviews

Subjective

Advertising pre-testing

Focus Groups

No standard probability

Product testing

Observation

Concept testing

Diary/Journal completion

Detail insights into behaviours and

emotions

Narratives

Provides rich data

Usage & Attitude

Ethnography/Netnography

Small samples
Usual answers the why? and
questions

Quantitative

Customer behaviour
Brand perception & Image

how?

Measurement

Tracking studies

Statistical probability large

Satisfaction surveys

Surveys

Large random samples

Price testing

Experiments

Use of structured questionnaires

Marketing mix evaluation

Objective

Market audit data

Used to test theory / hypotheses

Competitor data

Researcher is detached
Usually answers the when? What?
How? Where? question

24

12

Dimensions of Research Design

Positivism

Research
philosophy

Deductive

Quantitative
Experiment

Research
approaches

Survey
Probability
Observation
Interviews
Questionnaires
Secondary data

Case
Study

Mixed methods

Interview
study

Research
methods

Non-Probability Micro- analysis

Ethnography

Research
strategies

Qualitative

Inductive
Interpretivism

Sampling
strategies
Data
collection
techniques

(Adapted from Saunders et al.,

2003: 85)

Value Creation:
Customer Segmentation

26

13

The Marketing Management

Planning Process
Strategic Business Planning
Marketing Management Process
Market
Research

Segmentation
& Targeting

Product
Positioning

Marketing Mix
Decisions

MacroEnvironment

Product
Price

Customer
Needs
Competitive
& Market

Place
STP ~ linking
Strategy with Tactics
Strategic Marketing

Promotion
3 Service Ps
Tactical Marketing

Marketing Metrics, Budgets, Evaluation & Accountability

27

Definition of a Segment
Groups of customers with similar needs
or wants and priorities
and who because of this .

seek same benefits and attach same

importance to their satisfaction.

28

14

Segmentation, targeting, positioning

Segmentation
Identify variables
that allow the
market to be
segmented

Targeting

Positioning

Evaluate the
attractiveness of
each segment and
choose a target
segment

Identify positioning
concepts for each
target segment,
select the best,
communicate.

29

Approaches to segmentation are

many and varied

Lifestyle
surveys
Profitability
modelling
Values segmentation
Demographics

Campaign Management

30

15

Segmentation ~
its so simple.
Divide the market into groups
Whose members are as similar as possible to each other
That are as different as possible from other groups
Segments meet these criteria
Measurable
Sustainable
Accessible
Differentiable
Actionable

~ so why is it so difficult?
31

Segmentation in practice

Context dependent

Dynamic

environment is constantly changing

Demanding

prescriptive approaches can be misguided or inappropriate

demands time and attention

Implementation

relies on skills, capabilities and usually others to deliver results

Source: Palmer & Millier (2004)

32

16

Principles of market segmentation

Who
buys

customer /
consumer
characteristics

Market Segments
Size?
Access?
Differentiated?

Values

soft

Attitudes

Psychographics

Lifestyle

Visit SBI website to take the survey

Socio-economic &
demographic

hard

Geography
Benefits
Perceptions

Subjective

Preference trade-offs
What is
bought
and why

customer /
consumer
behaviour

Usage
Price sensitivity
Objective

Promotional response
Loyalty/ repeat purchase
33

Traditional segmentation variables

Geographic

Consumer

Business

Region

Region

Climate

Market
HQ, branch

Demographic

age, gender, income,

Industry (SIC code), Assets, Sales

family size/stage

# of employees

education

Psychographic

Behavioural

Social class

Corporate culture

Lifestyle (VALS)

Power structure

Media habits

Buyer-seller similarity

Benefits

applications

Usage occasion

urgency

Usage rate

size of order

Brand loyalty

existing relationships

34

17

Example: Gender stereotypes

Toy marketing is typically

segmented clearly along both age
and gender.

Lego introduced Lego Friends in

2012 to give it greater access to
the market for girls toys.

Even though Lego was originally

designed as a gender neutral toy
because toy store layouts are often
gender specific segments they
needed products that could be
classified as for girls.

35

Example: Gender stereotypes

Examples of the
new Lego Friends
website (below)
and the existing
Lego offering.

36

18

Key Account Segmentation:

Global Tech
Koala Bears

Uses an extended warranty to give them cover. Wont do anything themselves, prefer to curl-up and wait
for someone to come and fix it.
Small offices (in small and big companies).

Teddy Bears

Lots of account management and love required from a single preferred supplier. Will pay a premium for
training and attention. If multi-site, will require supplier to effectively cover these sites. (Protect me).
Larger companies

Polar Bears

29% of market

A wise Teddy or Polar bear working long hours. Will use trained staff to fix if possible. Needs skilled
product specialist at end of phone, not a bookings clerk. Wants different service levels to match the
criticality of the product to their business process.
Large and small companies

Grizzly Bears

17% of market

Like Teddy Bears except colder! Will shop around for cheapest service supplier, whoever that may be. Full
3rd-party approach. Train me but dont expect to be paid. Will review annually (seriously). If multi-site
will require supplier to effectively cover these sites.
Larger companies

Yogi Bears

28% of market

11% of market

Trash them! Cheaper to replace than maintain. Besides, theyre so reliable that they are probably obsolete
when they bust. Expensive items will be fixed on a pay-as-when basis - if worth it. Wont pay for training.
Not small companies

6% of market

Andropov Big

My business is totally dependent on your products. I know more about your products than you do! You
will do as you are told. You will be here now! I will pay for the extra cover but you will !

Bears

Not small or very large companies.

9% of market

37

A tool to understand customers

A cost effective promotional vehicle
A symbol of a commitment to customers
38

19

Three dimensional data

Data length

Data breadth

Customer

Data depth
39

Each customer has a unique DNA profile

derived from the products they buy
you are what you eat!

Copyright,dunnhumby

40

20

Key Concept: Benefit Segmentation

People buy a product to satisfy a particular need
The needs (or the relative importance of needs) differs across consumers.
People assign different weights to different benefits
Needs can be functional or symbolic

Segment 1

Attribute 2
Segment 2

Attribute 1
41

Examples of Benefits

Sector specific knowledge

Wide range of country knowledge
Full range of advice
Relationships
Security of choice

Affordable
Accessible
Qualified
Trustworthy
Personable

Motivators

Hygiene Factors

42

21

Differentiating Motivator Spectra

70%
30%

Relationship Needs

High

75%

Low

25%

High

Breadth of Advice Needs

Low
43

Perceptual Map
(From Cross Multiplying Motivators)
High Breadth of
Advice Needs

Skittish

Lovers

7.50%

17.50%

Low
Relationship
Needs

High
Relationship
Needs

22.50%

Grabbers

52.50%

Low Breadth of
Advice Needs

Addicts
44

22

Targeting:
Factors for Selecting Target Segments
Structural attractiveness:
Size
Growth rate
Profitability
Nature of competition
Bargaining power of buyers

Company objectives and resources:
Strategic fit with long-term objectives
Core competencies and capabilities
Desired relationship with customer

45

Select a Target Segment

Company
objectives and
resources
High

Medium

Low

High

Structural
Attractiveness

Medium

Low

46

23

The Multiple Criteria Matrix

1000
High
700
Medium
400
Low
100

Go
B
Go

Go

Stop

Stop

1000

700

High

Medium

Stop
400

100

Low

Company objectives
and resources
47

Targeting Strategies
1.
Undifferentiate
d Marketing
2. Differentiated
Marketing

3. Concentrated
Marketing

4. Customised
Marketing

24

Towards segments of one?

Enablers: Data capture, CRM, technology
Barriers: 1. resources, 2. company
characteristics and 3. customer cooperation
one-to-one marketing will play an
important role in future marketing strategy
but will continue to co-exist with
segmentation strategy
Source: Dibb (2001)

What is Positioning?
Positioning is the unique place for our product
relative to the competition in the mind of our
customer

50

25

Positioning Statement Format

Convince:

customer segment

That:

our product or service

Because:

differential benefit
51

Sample Positioning
Statement
[Convince] To business managers and professionals
engaged in making time sensitive decisions about
international business,
[That] DHL delivers on time
[Because] its pickup, transportation and delivery
system is wholly-owned and managed by DHL
personnel, not by third party providers.

26

Examples of Positioning Statements

Apple offers . the best personal computing experience
to students, educators, creative professionals and
consumers around the world through its innovative
hardware, software and Internet offerings.

IBM for businesses who need computing solutions, IBM

is the company you can trust for all your needs.

The Chrysler PT Cruiser is an inexpensive, small car, that

is versatile, fun to drive, and will appeal to active singles
and young couples with children who otherwise would
have bought an SUV or a minivan.

Value Creation:
The Marketing Mix

54

27

The Marketing Management

Planning Process
Strategic Business Planning
Marketing Management Process
Market
Research

Segmentation
& Targeting

Product
Positioning

Marketing Mix
Decisions

MacroEnvironment

Product
Price

Customer
Needs
Competitive
& Market

Place
7Ps ~ tactical tools to
implement the strategy
Strategic Marketing

Promotion
3 Service Ps
Tactical Marketing

Marketing Metrics, Budgets, Evaluation & Accountability

55

Marketing Mix: The 7 Pieces of the

whole
Product
Place
Price
Value
Creation

Promotion
People
Process
Physical Evidence

56

28

Product: Customer perceived value

Goods vs. Services Spectrum
Intangible

Tangible

Packaged
Goods

Motorcars

Fast-food

Consulting
Babysitting

Airline
Transportation

Tangible part of product

Intangible part of product

Source: Shostack G.L., Breaking Free from Product Marketing, Journal of Marketing, Vol. 41, No. 2, April 1977, American Marketing Association, p. 77.

Product: Components of A Product

Hotel experience
Core Benefit
Basic Product
Expected Product
Augmented Product
Potential Product

58

29

The Role of the Brand

59

A role in B2B as well

60

30

Product Life Cycle and Marketing Mix

Product

More

Full product

versions

line

Skimming or

Gain market

penetration

share

Defend
market share

Stay
profitable

Promotion

Inform,
educate

Stress
competitive
differences

Reminder
oriented

Minimal
promotion

Place

Limited,
exclusive

More outlets

Maximum
outlets

Fewer outlets

Price

One

Best sellers

61

BCG Growth-Share Matrix

High

Problem children

Market Growth
Rate

Stars

Low

Cash cows

10

Dogs

0.1

Relative market
share

31

BCG Growth Share Matrix: Product Sequence

High

star

problem children

Market Growth Rate

Disaster sequence

Success sequence

cash cow

dogs
Cash support

Low
10

0.1

Relative Market Share

Hooley et al 2004

BCG Growth-Share Matrix - Strategic Objectives

Positive

High

Market Growth Rate

Cash Flow

Negative

Positive

Cash Flow

Stars
build sales and/or market
share
invest to maintain/increase
leadership position
repel competitive challenges

Problem children
Build selectively
focus on defendable niche
where dominance can be
achieved
harvest or divest the rest

Cash cows
hold sales and/or market
share
defend position
use excess cash to support
stars, selected problem
children and new product
Low development
10

Jobber 2004

Negative

Dogs
harvest or
divest or
focus on defendable niche

Relative Market Share

0.1

32

Price: Cost to Customer

What the customer
gives up Time Effort Money

What the customer

receives - A benefit
or cluster of benefits
65

Price: Value to the Customer

Variable
cost per
unit

Too low
price
limit

Median Market Too high

price
price leader
limit
price

The
Price
Continuum

Company
Will not
make money

Pricing
Strategies

Consumer
Will not
buy

66

33

Pricing Strategies
Market Penetration

Skim The Cream

Product Line Promotion
Cost Plus Pricing
Target Pricing
Price Discrimination
Going Rate Pricing
Quantum Pricing
Odd Number Pricing
67

Value management

VALUE

VALUE

VALUE

DEVELOPMENT

COMPONENTS

PROPOSITIONS

Increase
value

Reduce
cost

NPD
Portfolio Mgmt
Business Model

Matching
process

CUSTOMER

Price realisation
Product
offering

Customer/
market needs
Strategy

Company/
product
resources
capabilities

Achieve
qualifiers
Channel &
Sales Strategy

Palmer, 2002

68

34

Place: Convenience for Customer

Marketing channels can be viewed as sets of

interdependent organisations involved in the process
of making a product or service available for use or
consumption.
- Stern and El-Ansary

69

Place: Distribution Channels

KEY CHANNEL DECISIONS
Vertical :

how long is the channel; direct vs. multi-level

Horizontal : type of distribution; intensive, selective, or

exclusive
Locations: customer touch points; online vs. offline

LOGISTICAL DECISIONS
Inventory
Transportation
70

35

Cost of raw materials

entering chain
Estimate processing
and other costs
Identify cost/price
at which product leaves
this part of chain

Add raw material and processing costs,

Subtract from cost/price at which product
leaves that part of the chain

Manufacturer
or or
Service
Provider
Manufacturer
Service
Provider

Manufacturers
Warehouse
Warehouse

Wholesaler
Wholesaler

Identify Frictional costs

Distributor
Distributororor
Retailer
Retailer
Is value created or destroyed?
Repeat for other chain elements
Identify value created and proportion of
value captured
Consider opportunities to improve
value capture

Direct
Direct

Can the chain be reconfigured

To be more efficient?

Customer
Customeror
of Consumer
Consumer

71

Place: Also the Retail Environment

72

36

Promotion: Communication
Promotional Strategies

Pull = Inducing consumers to ask for a product by name

thus persuading retailers to stock and pulling supplies
down through the chain

Push = Encouraging the distribution chain to stock, thus

pushing product out into the distributor network

Profile = To influence/meet stakeholders needs.

73

One-to-Many Communications

C
C

Content

Medium

C
C

Source: Hoffman and Novak (1996)

37

Many-to-Many Communications
F

Content

Content

Medium

Content

Content

F
C

Source: Hoffman and Novak (1996)

Promotion: It is all about

Communication
do not forget

interactive media is now seen as

MORE that just a facilitator of
person-to-person communication

it is a also medium that allows

people to interact with content.

76

38

Communications Plan

Specification Of Target Segment(s)

Communications Objectives
Communications Mix
Budget
Schedule
Monitoring and Evaluation
77

The Communications Mix

Advertising:

Public Relations:

TV & Press releases

Crisis management

City/Finance publicity

Product placement

TV, Cinema, Press, Radio, in-house

magazines, poster, online advertising.

Sales Promotion:

BOGOF

Discounts

Competitions

Direct:

Loyalty rewards

Telephone, mail, email

Coupons

Website

Goodie bags

Mobile texting

Trade promotions

Web-casting

Sales force promotions

Personal Selling:

Sponsorship

Salesforce
78

39

And for the Services Aspect

Add
People
Process
Physical evidence

79

A comparison of B2B & B2C

Customer base:
Buying behaviours: (DMU)
(DMP)
Buyer/supplier relationships:

Product:
Price:

Promotion:
Distribution/Logistics:

Industrial Products

Consumer Products

Few, with concentrated buying

power.
Group decisions.
Many buying influences.
Many purchasing procedures.
Very close relationships overtime.
Pre-sale consultancy and problemsolving.
After-sales services / support.
Technical complexity.
Standard or customised.
High unit price.
Negotiating/bidding.
Standard items from list.
Emphasis on personal selling.

Numerous, widely dispersed and

limited buying power.
Individual and family involvement.
Impulse, planned or experiential.

Mainly direct for make-to-order

customised items.
Standard items often available from
stock through distributors.

Short duration with very little close

contact.

Standard.
Detailed specifications.
Low unit price from list.

Mainly mass advertising and

promotion.
Stock items through a network of
wholesalers and retail distributors.

80

40

Value Delivery

81

Why relationship?
Our products are better
than the competition ?
Yes
No

Yes

II

No

III

IV

Our customer
relationships are
better than the
competition ?

82

41

Why relationship?
Our products/services are
better than the competition ?
Yes
No

Yes
Our customer
relationships are
better than the
competition ?
No

Thrive!
I

Slow, painful
II
death

Slow, III
painful Fast,IV
painless
death
death

83

Relationship Marketing

As a merchant youd
better have a friend in
every town.
An ancient Middle Proverb
Gronroos 1994

84

42

Relationship Marketing
RM involves extending traditional marketing. Three major
considerations are relevant:

1. The nature of the relationship with customers is changing. The

emphasis has changed from a transaction to relationship focus
(long-term customer retention)
2. A recognition that quality, customer service and marketing
activities are closely related and need to be brought into closer
alignment
3. A broader view of markets is emerging.
85

Focused Relationship Marketing elements

Quality

Customer
Service

Marketing

RELATIONSHIP
MARKETING
86

43

The six markets model

Internal
Markets

Supplier
Markets

Referral
Markets

CUSTOMER
MARKETS

Recruitment
Markets

Influence
Markets

Christopher, Payne and Ballantyne 2002

Relationship spidergram
Identification of key groups in each market domain,
and current vs. desired emphasis on each market
Customer
Markets

New

Existing

Referral Markets

10

10

Supplier Markets

6
Recruitment Markets

10

Internal Markets

Influence Markets

Source: Payne, A.F.T Relationship

Marketing : The Six Markets Model

44

Relationship marketing spidergram

for British Airways
Customer
Markets
New

10

10

Supplier
Markets

Existing

Referral
Markets
Mid 1970s
1980s
2000s

4
6
Recruitment
Markets

Influence
Markets

8
10
Internal
Markets

The Customer Experience Model

Sector
Differences

Experience

Peer-to-Peer

Caring
Attitude

Supplier
Condition

Value for
Time

Caring
Procedures, Processes

Value for
Money

Atmosphere

Variety /
Choice

Access

Emotional

Reliability

Application of Safety
Knowledge
Communication

Emphasis on attitude
Experience
Service
Product

Individual
Relationship

Outcomes

Social Impact

45

Important CE Factors in B2B

and B2C
B2B

B2C

1. Extent of Personal Contact

1. Helpfulness

2. Flexibility

2. Value for Time

3. Implicit Understanding of
Customer Needs
4. Pro-activity in Eliciting
Customers Objectives
5. Pro-activity in Checking that
Everything is OK

3. Customer Recognition
4. Promise Fulfilment
5. Problem Solving
6. Personalisation
7. Competence
8. Accessibility

6. Promise Fulfilment
7. Knowledge

Important CE Factors in B2B

1. Extent of Personal Contact
The extent to which the company deals with the
customer through personal contact methods

2. Flexibility
How willing and able are the company to modify their
offering in response to the customers specific needs or
changing requirements?

3. Implicit Understanding of Customer Needs

Does the company understand the context of the
customers order? Do they use their prior knowledge of
the customer and their business to serve them better?

46

Important CE Factors in B2C

1. Helpfulness
Are they really prepared to help me where nothing is
too much trouble for their staff?

2. Value for Time

Do they respect and make efficient use of my time by
shortening queues and delivering what they provide
efficiently?

3. Customer Recognition
When I contact them do they recognise and
acknowledge me as an individual?

The staircase of loyalty

Partner
Advocate

Prospect

Supporter

Defector

Client
Customer
Dissatisfied
Terrorist
Moira Clark

Clark and Baker 2004

47

Retaining customers is extremely

profitable
Customer
Profit
Price Premium
Referrals
Reduced
operating costs
Increased purchases/
balance growth
Base Profit
Acquisition
Cost

Year
Source: Bain Customer Retention Model, Bain & Company
Copyright Bain & Company

Evaluating and
Enhancing the
Value
96

48

The Marketing Management

Planning Process
Strategic Business Planning
Marketing Management Process
Market
Research

Segmentation
& Targeting

Product
Positioning

MacroEnvironment

Marketing Mix
Decisions
Product
Price

Customer
Needs

Place
Promotion

Competitive
& Market

3 Service Ps
Strategic Marketing

Tactical Marketing

Marketing Metrics, Budgets, Evaluation & Accountability

97

Metrics and Strategy

Metrics definition

Metrics application
98

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Three key questions

What

Why

How

Relative
performance

Market share

Campaign
effectiveness

Sales uplift
following
promotional
campaign

E.g.: Monitor sales

99

The Marketing Dashboard

Source: Salesforce.com User and Developer Conference 2005

100

50

Planning hierarchy

Marketing
Objectives
Marketing
Goals
Corporate
Goals

Marketing
activities

Process:
Identify most relevant metrics
to monitor success
Define performance indicators
for each metric
Define data needed
Revisit regularly

Marketing
Dilemmas
102

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Marketing Ethics

Behaviour that is consistent with the

principles, norms, and standards of business practice that
have been agreed upon by society.

Trevino L. K. & Nelson K. A. Managing Business Ethics, 4th Ed. 2007.

Acting Ethically

Moral awareness

recognising an ethical dilemma is present;

Moral judgement

Ethical behaviour

doing the right thing in the actions that follow.

deciding what is right or wrong in the case in

question

52

Pricing Ethics
Differentiation vs. discrimination as a strategy:
Price differentiation:
Different groups pay different amounts for the same product.
Why? Asymmetric information, time, place, branding.
Under a differentiated pricing strategy different groups could pay
the same if they had access to all market information.

Price discrimination:
Different groups must pay different amounts for the same product.
In certain sectors (e.g. financial services) increasingly hard to
maintain price differentiation strategies where consumers can easily
access a full range of market information over the internet.
105

Pricing Ethics
Examples of price discrimination in
practice:
Region encoding on DVDs.
Discounts for students / military personnel or other specific groups.
Dry cleaning (women's clothes cost typically cost more then men's
clothes).
Pharmaceuticals.
Car insurance.
Software

Is price discrimination unethical? Are there circumstances under

which it can be ethical?
106

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Assignment

Assignment
Individual written report on a specific organisational problem or
opportunity in order to
Demonstrate your understanding and application of relevant
concepts and theories introduced in the module.
Reflect on how the ideas and concepts in the module have
informed your thinking as managers especially in the context of
other modules of the MBA
Word count is 5000 words (+20%, -10%) excluding the appendices
and references.

54

Assignment
Option A

Elements in the report

Focus on a current marketing

problem or opportunity

Executive Summary

Propose a course of action to

deliver value
Describe the implementation
and expected impact

Part 1 - Identification of a
significant current
problem/opportunity (20% of
the marks)
Part 2 Proposed strategic
actions and rationale (30% of
the marks)
Part 3 Implementation and
impact (40% of the marks)
Interdependencies and
reflection (10% of the marks)

Assignment
Option B

Elements in the report

Focus on a past marketing

problem or opportunity

Executive Summary

Describe and critique the

course of action taken at the
time
Propose further action

Part 1 Analysis of a significant

past problem/opportunity (20%
of the marks)
Part 2 Critical analysis of the
past course of action (30% of the
marks)
Part 3 Future action (40% of
the marks)
Interdependencies and
reflection (10% of the marks

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Assignment
Keep a balance between theory and practice
Demonstrate broader reading of relevant theoretical
concepts and models
Be critical of both theories and their application
Be analytical justification, impact, interdependencies
Be specific use relevant examples
Integrate your elective pathway learning
Do not forget the reflective element

www.henley.reading.ac.uk

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