Market sensing and learning strategy: Competitive strength through knowing more Lecture 5 1

A route-map for market-led strategic change Part I Customer value imperatives Part II Developing a value-based marketing strategy Part III Processes for managing strategic transformation The strategic pathway Change strategy Market sensing and learning strategy The Customer is always right-handed Strategic gaps Strategic market choices and targets Strategic thinking and thinking strategically New marketing meets old marketing Organization and processes for change Customer value strategy and positioning Implementation process and internal marketing Value-based marketing strategy Strategic relationships and networks

The strategic pathway Developing a value-based marketing strategy Market sensing and learning strategy Strategic market choices and targets Customer value strategy and positioning Strategic relationships and networks

The strategic pathway Strategic thinking and thinking strategically Market sensing and learning strategy Strategic market choices targets Customer value positioning relationships networks Strategic thinking and thinking strategically transformation and strategy implementation

Agenda Understanding customers and markets Black swans and white swans From market research to market sensing New cross-over tools for management understanding Marketing intelligence Interpretation Lessons in learning Enhancing sensing capabilities

Understanding customers and markets Companies have little understanding of why their customers behave the way they do Executives looks at averages and ignore market granularity Agile, fast-moving businesses show high knowledge-intensity The goal is to raise a company’s “Market IQ” Crunch question = what do you know that every rival does not also know?

Black swans and white swans The black swan analogy underlines the limitations to our learning and the fragility of our knowledge Black swan events are the “unknown unknowns” Market sensing demands open-minded inquiry and experimentation not probabilistic estimates and sampling

From market research to market sensing What is the difference between market sensing and marketing research? marketing research involves techniques of data collection and processing market sensing is a process of management understanding

Marketing research versus market sensing Processes of management understanding Sources of marketing knowledge Management information systems Internal records CRM data Databases Interpretation Surveys Observation Market tests Marketing research Market sensing capabilities Market understanding Ethnography Internet Futurology Cross-over tools Scanning Trends Clues Marketing intelligence

From market research to market sensing Limitations of conventional market research unreasonable expectations the limits of questions the “right” results we don’t believe it excuses

From market research to market sensing The elephant in the market Strategic and non-strategic marketing information

Strategic and non-strategic marketing information Importance of information High Low High Short-term dilemmas Priorities Urgency of information Time wasters Strategic Low

New cross-over tools for management understanding Ethnography hidden in plain sight neuromarketing Internet sensing the wisdom of crowds blogs virtual reality social networks

New cross-over tools for management understanding Futurology careful examination of what is going on around us scenario building – how things may unfold visioning – working out what is likely to happen and what we want to happen

Marketing intelligence Trends and clues trendspotting new identity groups the quest for cool looking for clues deep mining But play nicely and don’t be naughty Managing customer knowledge

Interpretation Link between information, sensing and management understanding relies on processes of interpretation Integration of multiple information sources central to evidence-based management Goal is sustaining learning to create competitive advantage

Lessons in learning Storytelling Watching customers Meeting customers Customer days Building customer scenarios Listening not evaluating Studying complainers

Enhancing sensing capabilities A structure for market sensing

A framework for market sensing Probability of the event occurring High Medium Low 7 Field of dreams Utopia 6 5 Effect of the event on the company* Things to watch 4 3 Future risks 2 Danger 1 * 1=Disaster, 2=Very bad, 3=Bad, 4=Neutral, 5=Good, 6=Very good, 7=Ideal

Enhancing sensing capabilities Managing the market sensing process choosing the environment sub-dividing the environment to focus attention identifying the impact of external changes interpreting the model for strategy building Linking market sensing to plans providing information as a stimulus to thinking consider who should be consulted and involved

Enhancing sensing capabilities A note of caution market sensing and new learning may be disruptive inside an organization