András BauerMarketing1 The Big Picture Marketing does not work in a vacuum and it is important to know, what is going on elswhere. Historically, Industrial Organization looked at industry performance

András BauerMarketing2 STRUCTURE CONDUCT PERFORMANCE NATURE: SUPPLY AND DEMAND

András BauerMarketing3 Structure-Conduct-Performance In this logic the market structure (plus add culture to international) defines how firms « behave », i.e. compete extremely in an oligopoly. This behavior will have an impact on company performance, i.e. profits are usually higher in a monopoly or marketing is more intensive in an oligopoly.

András BauerMarketing4 Value Chain Analysis As an extension to aggregate industry analysis, one can look inside the firm and determine, what is a contribution of different activities. The Value Chain Model is usually still aggregate

András BauerMarketing5 PRIMARY ACTIVITIES MARGINMARGIN OPE RATI ONS IN- LOG ISTI CS OUT- LOG ISTI CS MAR KET ING/ SALES SER VICE FIRM INFRASTRUCTURE HUMAN RESOURCES MANAGEMENT TECHNOLOGY DEVELOPMENT PROCUREMENT SUPPORT ACTIVITIES THE MODEL OF A VALUE CHAIN

András BauerMarketing6 The Value Chain Is a good construct, but is clearly based on the old economy with more emphasis on physical creation of products and services « Supporting functions » may become the core of the value chain

András BauerMarketing7 An extended version of SCP: The Five Forces Model Based on empirical research on firm and industry cases several researcers worked on this concept. (e.g. Bain) Michael Porter (Harvard) made an industry competitive framework famous:

András BauerMarketing8 Rivalry within the industry New entrants Firms exiting Bargaining power of buyers Bargaining power of suppliers FIVE FORCES

András BauerMarketing9 The Five Forces Model Helps you to think strategically Looks at power, as moving force of economic competition Does not tell you, why firms provide more value to their owners

András BauerMarketing10 SWOT Analysis SWOT analysis is based on logic. Looks at the firm and its environment from the inside Strenghs and Weaknesses and from outside: Opportunities and Threats

András BauerMarketing11 SWOT Analysis What is important in the SWOT analysis is not the analysis only by itself, but the action plan as a consequence. Example: Higher prices than competitors, as a weakness. What can you do about it? What action is required? Or: A growing market, as an opportunity. What should be done to capture it?

András BauerMarketing12 Benchmarking Benchmarking helps to establish our comparative position and study the best practice. Benchmarking is an important exercise, since it will clarify, where we are. It can be used as an input to a SWOT analysis

András BauerMarketing13 Putting it together: The Balanced Scorecard The Balanced Scorecard is an ambitious tool or,method of organizing, to link performance to strategy and firm activities. Though it is very analytical, the journey could be more important than the destination, i.e. the firm experiences learning and synergy

András BauerMarketing14 Vision and Strategy Customer Financial Internal Business Processes Learning and Growth THE BALANCED SCORECARD

András BauerMarketing15 The Balanced Scorecard Philosophy It is more than a combination of financial and non-financial measures, it includes outcomes and outcome drivers. For all firms or business units the BC is unique and can be created from its own variables.

András BauerMarketing16 FINANCIAL MEASURES Revenue Growth and Mix Cost Reduction/Productivity Asset Utilization/Investment CUSTOMER MEASURES Product/Service Attributes Customer Relationship Image and Reputation INTERNAL MEASURES Quality and time-based metrics of performance LEARNING AND GROWTH MEASURES People, systems and organizational processes

András BauerMarketing17 Customer satisfaction Customer retention Customer profitability Customer acquisition Market share Account share Core outcome drivers and Internal Business Process Measures Financial Objectives Customer Outcomes

András BauerMarketing18 Customer Acquisition Customer Satisfaction Customer Retention Product Service Attributes Image Relationship Value = + + CUSTOMER OUTCOMES AND DRIVERS

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András BauerMarketing20 THE ANSOFF MATRIX DEVELOP NEW SEGMENTS FOCUS ON COMPETITORS ’ CUSTOMERS FOCUS ON EXISTING CUSTOMERS FOCUS ON NEW CUSTOMERS IN EXISTING SEGMENTS

András BauerMarketing21 CUSTOMER TARGET CORE STRATEGY MARKETING MIX THE LOGIC OF SEGMENT FOCUSED STRATEGY

András BauerMarketing22 Specific to marketing analysis Market segmentation, the capability to identify, describe and analyze segments Product positioning, the understanding of how the value proposition works on customers Consumer behaviour analysis Customer analysis

András BauerMarketing23 LOOK AT THE BIG PICTURE FIND OUT HOW VALUE IS CREATED LOOK AT THE FIRM ANALYZE THE MARKET ANALYZE COMPETI TORS FIGURE OUT THE BEST VALUE PRO POSITION DEFINE THE SPECIFIC MARKETING MIX IMPLEMENT: TIME AND BUDGET EVALUATE FUTURE ACTIONS A ROAD-MAP FOR ANALYSIS