Strategic Marketing 1. Imperatives for Market-Driven Strategy 2. Markets and Competitive Space 3. Strategic Market Segmentation 4. Strategic Customer Relationship Management 5. Capabilities for Learning about Customers and Markets 6. Market Targeting and Strategic Positioning 7. Strategic Relationships 8. Innovation and New Product Strategy 9. Strategic Brand Management 10. Value Chain Strategy 11. Pricing Strategy 12. Promotion, Advertising and Sales Promotion Strategies 13. Sales Force, Internet, and Direct Marketing Strategies 14. Designing Market-Driven Organizations 15. Marketing Strategy Implementation And Control

Capabilities for Learning About Customers and Chapter 5 Capabilities for Learning About Customers and Markets McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

Capabilities for learning about customers and markets Market-driven strategy, market sensing and learning processes Marketing information and knowledge resources Marketing intelligence and knowledge management Ethical issues in collecting and using information

Learning capabilities at P&G Competitive strength from superior customer knowledge To deliver a customer experience, less formal research, more one-to-one communication Consumer Village Online virtual reality Cave Watch people clean baths Understand what it is like to live on $50/month Social networking sites

Market Sensing and Learning Processes Market sensing processes Learning organization Learning and competitive advantage Learning about markets Barriers to market learning processes

Market sensing at Tesco International Retailer entry to U.S. grocery market, not with existing format Discovering what U.S. consumers want: Senior managers live with U.S. families Probe lifestyles of families Prototype store Developing a new retail format and targeting the “grocery gap”

Market sensing processes Open-minded inquiry processes Analyzing competitors’ actions Listening to front-line employees Searching for latent customer needs Scanning the peripherary of the market Encouraging experimentation

Marketing information and knowledge resources Scanning processes Specific marketing research studies Internal and external marketing information resources Relationships with external marketing research providers

Screening A New Research Supplier 1. Client ® Would you recommend this supplier? 2. Supplier ® Do you have sufficient funds for this project? 3. What parts of the project will be subcontracted, and how do you manage subcontractors? 4. May I see your interviewer’s manual and data entry manual? 5. How do you train and supervise interviewers?

Screening A New Research Supplier 6. What percentage of interviews are validated? 7. May I see a typical questionnaire? 8. Who draws your samples? 9. What percentage of your data entry is verified? 10. Managers - What do you think about this supplier? Source: Seymour Sudman and Edward Blair, Marketing Research, A Problem-Solving Approach, Irwin/McGraw-Hill, 1998, 67.

A Framework for Market Sensing Probability of the Event Occurring High Medium Low 7 Field of Utopia 6 Dreams Effect of the Event on the Company 5 Things to 4 Watch 3 Future 2 Danger Risks 1 * 1=Disaster, 2=Very bad, 3=Bad, 4=Neutral, 5=Good, 6=Very good, 7=Ideal

Learning About Markets Objective Inquiry Keeping and Gaining Access to Prior Learning Synergistic Information Distribution Mutually Informed Interpretations Source: George S. Day, Journal of Marketing, October 1994.

Barriers to market learning Managers reject new insights/information Rigid organizational structures and inflexible information systems Politics favour the status quo Overwhelming pressure of existing business operations Tendency to “active inertia”

Best Buy’s customer knowledge strategy Strategy treats customers as individual, develops solutions for needs and engages employees to serve them New ideas from listening more closely to customers and employees Knowledge shared with manufacturers and product developers Core innovation competency is gathering and synthesizing customer intelligence

Customers and design at Xerox “Customer-led innovation” - “dreaming with the customer” Not just building prototype and getting feedback Focus groups as first step in commercial printer design Changing designs in response to customer insights Investment in understanding what customers think about the “bright ideas”

Marketing research project Defining the problem Understanding the limitations of the research Quality of the research Costs Evaluating and selecting suppliers Research methods

Existing marketing information resources In-company resources Open source resources Research agency resources

Creating new marketing information Observation and ethnographic studies Marriott - rethink hotel experience for “road warriors” GE - developing plastic fibers position Intel - use of computers by children in China Research surveys Internet-based research

Problem definition to guide marketing research studies Project and Scope Describe the topic for the study and the background. Research Objectives Set specific goals for the study - why is it being undertaken? Identify the specific pieces of information required and the questions that need to be asked to obtain that information Research Questions Planned Outcomes When completed how should the results be presented for management use?

Impact of the Internet on Marketing Costs and Availability Online Surveys Fast Inexpensive Limitations in population coverage Resistance to excessive Web communications Customer feedback and peer-to-peer Web communications Monitoring customer Web behavior

Marketing and management information systems Marketing information systems Management information systems Marketing decision support systems

Marketing Decision-Support System Components Database Display Analysis Capabilities Models

Marketing intelligence and knowledge management Role of the chief knowledge officer Leveraging customer knowledge

Ethical issues in collecting and using information Invasion of customer privacy Information and ethics Information collection Research subjects Information sharing

Magnetic resonance imaging (MRI) Pictures response of brain to stimuli Neuromarketing Magnetic resonance imaging (MRI) Pictures response of brain to stimuli Probing consumer preferences is controversial Invasive Privacy issues Information sharing Insurance companies Employers Law enforcement