The New Marketing and Sales

 Marketing appeared later to help sales people:  By using marketing research to size and segment the market  By using communications to build the brand and develop collateral materi

The New Marketing and Sales

Strategies and Tactics

My Message

 Marketing’s performance has been

disappointing.

 You must replace your Old Marketing with

New Marketing that is:

 Holistic

 strategic

 financially-oriented

The New Marketplace

 Commoditization

 Competition of cheaper brands from China.

 Rising selling and promotion costs

 Proliferation of distribution and media channels.

 Power shifting to giant retailers

 Power shifting to increasingly informed customers.

 Shrinking margins.

 Mergers, bankruptcies.

Marketing’s Results Are Embarrassing

 TV advertising has lost much of

its former efficiency.

 Sales promotions are mostly

 High rate of new product failure.

 Marketing focuses too much on

the short run.

 Marketing has become a one P

function.

How Do CEOs See Marketing?

 Marketing is Advertising and Selling.

 Marketing is 4Ps.

 Marketing is STP and 4Ps.

(STP: Segmentation, Targeting, Positioning)

Marketing, Sales and Service

Sales Precedes Marketing

 In the beginning there was sales.

 Marketing appeared later to help sales people:

 By using marketing research to size and segment the market

 By using communications to build the brand and

develop collateral materials

 By finding leads through direct marketing and trade

shows

 Marketing was originally located in the sales department.

 Then marketing grew as a separate department responsible for the marketing plan (4Ps) and brand-building.

Differences in Mindset and Style

Hypothesis:

The integration of sales and marketing tends to progress through four

distinct stages or levels of complexity.

Caution!

The most appropriate stage for a company will depend on many factors

More integrated will not always mean more effective.

Identify the Existing Level of Relationship

Buying Funnel

Purchase Intention

Customer

Awareness BrandAwareness Brand

Consider-ation

Brand Preference

Purchase Loyalty Customer

Advocacy

Marketing Handoff Sales

Integrating Marketing Into the Sales Funnel

Prospecting Qualifying Defining

Needs

Contract Negotiation

Developing Solutions

Proposal Preparation/

Presentation

Revision & Issue Resolution

tation

Implemen-Purchase Intention

Purchase Loyalty Customer

Advocacy

Marketing Can Help

in the Sales Process

 Prospecting and qualifying

 Marketing develops high quality leads for the sales force.

 Defining needs

 Marketing works with sales to develop value propositions for customer

segments, sub-segments and even individual accounts

 Developing solutions

 Marketing provides “solution collateral” – organized templates and

customizing guides so that salespeople can develop solutions at lower cost without constantly reinventing the wheel.

Involve the Sales Force

in Marketing Planning

team.

management systems.

Eight Ways to Improve Marketing/Sales Alignment

 Hold regularly scheduled meetings between marketing and sales

 Make it easier for marketing and sales people to communicate with each other.

 Arrange for more joint work assignments and job rotation

between marketing and sales people

 Appoint a liason person from marketing to live with the sales force and help marketers understand sales problems better.

 Locate the marketing and sales people in the same building or location to maximize their encounters.

 Set shared revenue objectives and reward systems.

 Define more carefully the steps in the marketing/sales funnel.

 Improve sales force feedback

USE APPROPRIATE CHANNELS FOR DIFFERENT CUSTOMER

SEGMENTS AND TASKS

National

Acct.

Managemen

t Direct Sales

CUSTOMER ACTIVITY CYCLE : IBM BANK CUSTOMER (SIMPLIFIED)

Update

Take Strategic Decision

Understand

IT Options

Develop Systems Integration Purchase

deciding what to do

keeping it going doing it

Customer Activity Cycle

(CAC)

Source : Sandra Vandermerwe, From Tin Soldiers to Russian Dolls : Creating Added Value thorugh Services

CUSTOMER ACTIVITY CYCLE : IBM BANK CUSTOMER (SIMPLIFIED)

Planned Maintenance

Preventative

maintenance

Expand Renew

Feasibility +

IT advice + expertise

Sourcing Buying Distributing

Consulting Update

Take Strategic Decision

Understand

IT Options

Develop Systems Integration Purchase

deciding what to do

keeping it going doing it

Customer Activity Cycle

(CAC) System +softwareintegration

Three Types of Customers

 Price-oriented customers (transactional selling)

 They want value through lowering cost They know the product and care only about the price They

don’t want to see a salesperson

 Solution-oriented customers (consultative selling)

 They want value through more benefits and advice.

 Strategic-value customers (enterprise selling)

 They want value through higher benefits and lower costs They want the supplier to co-invest and

participate in the customer’s business

 Source: Neil Rackham

Part 2 Applying Holistic

Marketing

 Marketing must become strategic and drive business strategy

 A company needs to take a more holistic view of:

 the target customers’ activities, lifestyle, and social space.

 the company’s channels and supply chain.

 the company’s communications.

 the company’s stakeholders’ interests.

 Source: Philip Kotler, Dipak Jain, and Suvit Maesincee, Marketing Moves: A New Approach to Profits, Growth, and Renewal (Harvard Business School

Press, 2002)

Holistic Marketing

HOLISTIC RELATIONSHIP MARKETING FRAMEWORK

CORE COMPETENCIES COLLABORATIVE NETWORK

2) How can we define relevant market space?

3) What are the potential opportunities emerging from the market space?

4) What business capabilities and infrastructure required?

1) Who is involved?

4 COMPETITIVE PLATFORMS

Market Offerings

CUSTOMER MIND SPACE

VALUE PROPOSITION

BUSINESS MODEL

COMPETENCY SPACE

Business Architecture

BUSINESS PARTNERS

RESOURCE SPACE

SCM

Marketing Activities Operational

Core Competencies Collaborative Network

Part 3. Developing An Overall Strategy:

Marketing Strategies Are Showing Diminishing

Returns

 Product differentiation is harder to

achieve.

 Acquisitions and mergers have as

many failures as successes.

 Internationalization is offering less

opportunities because either the good

markets are overcrowded or the poor

markets have no money.

 New products unfortunately fail more

times than they succeed.

 Price cutting doesn’t work because

competitors will match.

 Pricing raising doesn’t work since

there isn’t enough differentiation to

support it.

 Cost cutting has eliminated much of

the fat but is now risking cutting the

muscles.

Strategies for Firms in Different Market Positions

Jagdish Sheth, Singapore Marketer, 2002

Seven Winning Strategies

1. Cost reduction (IKEA, Southwest Airlines, Wal-Mart,

Enterprise Rent-a-Car).

2. Improved customer experience (Starbucks, Harley

Davidson)

3. Highest product quality (P&G, Toyota).

4. Niching (Progressive Insurance, Tetra)

5. Innovative business model (Barnes & Noble,

Charles Schwab, FedEx)

6. Product Innovation (IPOD, Swatch watch)

7. Design (Bang & Olufsen)

Market Visionaries

 On-line stock brokerage

Source: Clayton M Christensen, The Innovator’s Dilemma, p xxix.

Why Leaders Ignore Disruptive Innovations

sustaining innovations that will allow them to charge higher prices

wishes but they ignore potential customers who

want lower cost solutions

challenger is emerging.

reach top management and if it does, top

management chooses to ignore it or responds heartedly.

half-Strategies for National Brands

Facing Store Brands

your brand than his store brand.

Strategies for Meeting Chinese

Competition

1. Reduce your costs to a minimum.

2. Reduce your prices.

3. Shift your production to China.

4. Add new features and improved quality.

5. Strengthen the brand image.

Part 4 Developing New Product

Ideas

In mature markets, the growing

number of competitors leads

companies to target niches of low

profitability.

Market Size

Number of competitors

Average profitabili

ty of all competito

rs

Y O G U R T S M A R K E T

Time

Baby dolls market

Doll varieties

New category

To feel

Teenager

The case of Barbie

Other Examples of Lateral Marketing

New Approach to Finding Product, Market and Marketing Mix Ideas

(Wiley, 2004)

Part 5 Improving Communication

Ad Agencies Search for

New Media

 Blimps (MetLife).

 Sports teams (FedEx pays to name Memphis Express)

 Racing cars carry as much as 20 logotypes of its sponsors.

 Vehicle wrapping of a colorful vinyl advertisement around

an ordinary car

 In-flight advertising and in-movie advertising.

 Video ads in elevators and at gas pumps.

 Print ads in bathrooms.

 Books: Bulgari commissioned Fay Weldon to write a novel called “The Bulgari Connection” with an extravagant

Bulgari necklace on cover.

 Mobile marketing

THE Y&R MODEL OF BRAND STRENGTH

A successful brand has brand vitality and brand stature.

1 Differentiation, the brand is distinct

appropriate.

Some conclusions:

1 A brand that has high familiarity but low likeability is a troubled brand.

2 A brand that has high likeability but low familiarity has high advertising potential.

3 A brand with high vitality but low stature has excellent potential.

4 When a brand’s differentiation and relevance start slipping, esteem will slip next, and then familiarity will decline.

Building Strong Associations

Utilize all levels of brand meaning - McDonalds:

• Attributes: clean restaurant; consistent food

• Benefits: quick service; value price

• Values: children’s charity; fun (playground, toys); I’m Lovin’ It

• Culture: service culture; where young people enter the workforce

• Personality: Ronald McDonald; Golden Arches; McEverything

• User: families; young people

Part 6 Moving to Technology-Enabled Marketing

 Direct marketing and

Needed: Metrics for Measuring Different

Marketing Expenditure Categories

 Customer win-back campaigns

 New product launch campaigns

Major Metrics

Sales Metrics

Customer Readiness to Buy Metrics

 Number of promoters to detractors

 Customer acquisition costs

 Average stocks volume (value)

 Spontaneous (unaided) advertising awareness

 Prompted (aided) advertising awareness

Sales force metrics

 Cost per sales dollar Price and Profitability Metrics

Comments on Some Metrics

Brand

familiarity

Purchase consideration

Purchase intention

PR

Message effectiveness

In-store activity

Pricing Promotion

Revenue Margin

Use and satisfaction Reviews

Brand

familiarity

Purchase consideration Purchase intention Purchase

Build Models of How Your Market

Works and Use New Tools

Marketing Decision Models and Marketing Mix Response Models

SALES AUTOMATION

an informed salesperson who virtually has the whole company’s knowledge at his command and can

Marketing Automation

 Selecting names for a direct mail campaign

 Deciding who should receive loans or credit extensions

 Allocating product lines to shelf space

 Selecting media

 Customizing letters to individual customers

 Targeting coupons and samples

 Pricing airline seats and hotel reservations

Marketing Dashboards

Exploit the Internet!

 Create a web site that brilliantly communicates about your history, products, brands, beliefs and values (BMW).

 Create a site that consults on a category (Colgate on dental

problems).

 Create a site that consults on the individual customer’s profile

(Elizabeth Arden) and sells customized products (Acumin

vitamins).

 Run focus groups with prospects, customers and dealers or send questionnaires.

 Send ads or information to prospects who show an interest.

 Send free samples of new products (freesample.com).

 Send coupons of new products (coolsavings.com).

 Invite customers to send e-mails about problems, ideas, etc

 Use the Internet to research your competitors.

 Facilitate internal communications among employees on a private intranet.

 Use the Internet to improve purchasing, recruiting, and training.

 Use the Internet to compare sellers’ prices and to purchase

materials by posting the company’s terms

Technology-Enabled Marketing: Examples

 Kraft has the names of 110 million customers and 20 thousand facts for each household Kraft launched print magazine, Food & Family, that is delivered to the homes of 2.1 million Kraft

customers in 32 versions tailored to 32 segments.

strategy.

marketing challenge.

conceive of new product and service ideas.

customers; the old ways are failing.

marketing to achieve precision marketing

“This time like all times is a good one,

if we but know what to do with it.”

Ralph Waldo Emerson

THANK YOU!