© 2014 Alexander Chernev. About this Slide Deck ✦ This slide deck includes figures from Strategic...


About this Slide Deck

✦ This slide deck includes figures from Strategic Marketing Management (8th Edition) by Alexander Chernev

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Strategic Marketing Management (8th Edition)

Book Overview


The Big Picture

✦ Chapter 1: Marketing as a Business Discipline ✦ Chapter 2: Marketing Strategy and Tactics✦ Chapter 3: The Marketing Plan

Control

Goal

Strategy

Tactics

Implementation

Customer value

Collaborator value

Company value

OVP

Incentives

ServiceProduct Brand

Price

Communication Distribution

Marketing Strategy and Tactics (Value-Creation Model)

The Marketing Plan (G-STIC Framework)


The Big Picture

Chapter 1: Marketing as a Business Discipline Chapter 2: Marketing Strategy and Tactics Chapter 3: The Marketing Plan

Control

Goal

Strategy

Tactics

Implementation

The Marketing Plan (G-STIC Framework)

Marketing Strategy and Tactics (Value-Creation

Model)

Incentives


Price


Customer value

Collaborator value

Company value

OVP


Marketing Strategy

✦ Chapter 4: Identifying Target Customers ✦ Chapter 5: Creating Customer Value✦ Chapter 6: Managing Company Value✦ Chapter 7: Creating Collaborator Value

ValueValue

ValueValue

Context

Collaborators

Customers

Competitors

Company

Value

Value

Market Analysis (6-V Framework)

Customer value

Collaborator value

Company value

OVP

Value-Sharing Model(3-V Principle)


Marketing Strategy

Chapter 4: Identifying Target Customers Chapter 5: Creating Customer Value Chapter 6: Managing Company Value Chapter 7: Creating Collaborator Value

Market Analysis (6-V Framework)

ValueValue

ValueValue

Context

Collaborators

Customers

Competitors

Company

Value

Value

Value-Sharing Model(3-V Principle)

Customer value

Collaborator value

Company value

OVP


Marketing Tactics

✦ Chapter 8: Managing Products and Services✦ Chapter 9: Managing Brands✦ Chapter 10: Managing Price✦ Chapter 11: Managing Incentives ✦ Chapter 12: Managing Communications ✦ Chapter 13: Managing Distribution

Marketing Tactics(7-T Framework)

ServiceProduct

Communication

Incentives Price

Distribution

Brand

Value


Marketing Tactics

Chapter 8: Managing Products and Services Chapter 9: Managing Brands Chapter 10: Managing Price Chapter 11: Managing Incentives Chapter 12: Managing Communications Chapter 13: Managing Distribution

Marketing Tactics(7-T Framework)

ServiceProduct

Communication

Incentives Price

Distribution

Brand

Value


Managing Growth

✦ Chapter 14: Gaining and defending market position ✦ Chapter 15: Managing Sales Growth✦ Chapter 16: Managing New Products✦ Chapter 17: Managing Product Lines


Managing Growth

Chapter 14: Gaining and defending market position Chapter 15: Managing Sales Growth Chapter 16: Managing New Products Chapter 17: Managing Product Lines


Marketing Workbooks

✦ Chapter 18: Segmentation and targeting workbook✦ Chapter 19: Business plan workbook✦ Chapter 20: Positioning statement workbook


Marketing Workbooks

Chapter 18: Segmentation and targeting workbook Chapter 19: Business plan workbook Chapter 20: Positioning statement workbook



Figures: Part I


The Role of Frameworks in Marketing Management

Typical problem

Specific solution

Typical solution

Specific problem

Framework

Generalize Apply

Trial & error


The Role of Frameworks in Marketing Management

Typical problem

Specific solution

Typical solution

Specific problem

Framework

Abstraction Application

Trial & error


Identifying Target Markets: The 5-C Framework

Com

pany

Competitors

CollaboratorsContext

Customers

Com

pany

Competitors

Context

CollaboratorsCustomers


Identifying Target Markets: The 5-C Framework

Com

pany

Competitors

Collaborators

Context

Customers


Defining the Value Exchange: The 6-V Framework

ValueValue

ValueValue

Context

Collaborators

Customers

Competitors

Company

Value

Value

Companyvalue exchange

Competitive value exchange


Defining the Value Exchange: The 6-V Framework

ValueValue

ValueValue

Context

CollaboratorsCustomers

Competitors

Company

Value

Value

Companyvalue exchange

Competitive value exchange


The Optimal Value Proposition (OVP)

Customers value

Collaborator value

Company value

OVP

The Optimal Value Proposition


The Optimal Value Proposition (OVP)

Customer value

Collaborator value

Company value The Optimal

Value Proposition (OVP)OVP


The 7 Tactics Articulating the Offering's Value Proposition

Marketing Mix (7 Ts)

Customer value

Collaborator value

Company value

OVP

Incentives


Price



The 7 Tactics Articulating the Offering's Value Proposition


Incentives


Price


Customer value

Collaborator value

Company value

OVPStrategy

Tactics


The Seven Marketing Tactics (Marketing Mix)

ServiceProduct

Communication

Incentives Price

Distribution

Brand

Value

ServiceProduct

Communication

Incentives Price

Distribution

Brand

Value

ServiceProduct

Communication

Incentives Price

Distribution

Brand

Value


Designing, Communicating, and Delivering Value

Delivering value

Brand

Service

Communicating value

Price

Incentives

Product

Designing value



Delivering

value

Brand

Service

Communicating

value

Price

Incentives

Product

Designing

value



Distribution

Incentives Price

Communication

Product BrandService

Communicating the offering Delivering

the offering

Designing the offering




Communicating the offering

Delivering the offering

Designing the offering


Distribution

Incentives Price

Communication



The 7-T and the 4-P Frameworks


Distribution

Incentives Price

Communication


PromotionPlace

Product

Price


Strategies for Generating a Business Model

Marketing Strategy (value analysis)

Bottom-up business model generation

Marketing Tactics (offering design)

Top-down business model generation


The Five Forces of Competition

Competitors

New entrants

Buyers

Substitutes

Suppliers

Source: Porter, Michael E. (1979), “How Competitive Forces Shape Strategy,” Harvard Business Review, 57 (March–April), 137–145


The G-STIC Framework for Market Planning and Analysis

Control

Goal

Strategy

Tactics

Implementation

Business model


Goal

Focus Benchmarks

The G-STIC Action-Planning Flowchart

Strategy

Target market

Valueproposition

DistributionCommunication

Service BrandProduct

PriceIncentives

Tactics

Organizational infrastructure

Implementation

Business processes

Implementation schedule

Evaluate performance

Control

Monitor theenvironment

The logistics of developing the offering

The ultimate criterion for success

The logic of the value-creation model

The specifics of the market offering

The process of evaluating goal progress


The Marketing Plan

Executive summary

Situation analysis

Action Plan (G-STIC Framework)

Control

Goal

Strategy

Tactics

Implementation

Exhibits

Business model



Figures: Part II


Segment-Based Targeting

Segment A (target)Segment B (nontarget)Segment C (nontarget)

Unsegmented market

Segment-based target identification


Segment-Based Targeting

Segment A (target)Segment B (nontarget)Segment C (nontarget)

Unsegmented market

Segment-based target

identification


The Key Targeting Principles

Customer needs

Customer resources

Target compatibilityCompany

goals

Company resources

Target attractiveness

Company analysis Customer analysis


The Resource Advantage Principle

Customer needs

Unutilized competitor resources

Competitive wasteland

The company's optimal target customers

Unmet customer needs

Unutilized company resources

Competitors' optimal target customers

Intense competition

Company resources

Competitor resources

Target

Company resources


The Resource Advantage Principle

Customer needs

Unutilized competitor resources

Competitive wasteland

The company's optimal target customers

Unmet customer needs

Unutilized company resources

Competitors' optimal target customers

Intense competition

Competitor resources

Target


The Customer Identification Process

Strategic targeting

Tactical targeting

Value-based analysis

Channel-based analysis


The Customer Identification Process

Strategic targeting

Tactical targeting

Value-based

analysis

Channel-based

analysis


Strategic and Tactical Targeting: Linking Customer Value and Profile

ImportantUnobservableNot actionable

ObservableActionable

Less important

Target compatibility

Target attractiveness

Value

Profile

Identification (linking value & profile)

Behavioralfactors

Demographicfactors

Strategic targeting

Tactical targeting

Value-based identification

Profile-based identification

Target customers


Strategic and Tactical Targeting: Linking Customer Value and Profile

ImportantUnobservableNot actionable

ObservableActionable

Less important

Identification (linking value &

profile)

Strategic targeting

Tactical targeting

Value-based identification

Profile-based identification

Target customers

Target attractiven

ess

Profile

Value

Demographic

factors

Behavioralfactors

Target compatibilit

y


Targeting Efficiency

Oversegmentation(narrow)

“Sniper” targeting(perfect fit)

Value-based segment (unobservable)Profile-based-segment (observable)

IncorrectCorrect

“Shotgun” targeting(broad)

Shot-in-the-dark(off base)


Targeting Efficiency

Value-based segment (unobservable)Profile-based-segment (observable)

“Shotgun” targeting(broad)

Oversegmentation(narrow)

Shot-in-the-dark(misaligned)“Sniper” targeting

(perfect fit)


Targeting Multiple Segments

Offering BOffering A

Segment A (target)

Segment B (target)Segment C (nontarget)


Segmentation as a Process of Differentiation and Agglomeration

Mass market (unsegmented)

Agglomeration

Idiosyncratic market (Unsegmented)

Differentiation

Segmented market


Segmentation and Targeting: The Big Picture

Tactical targeting(profile-based)

Decide how to reach target customers to communicate

and deliver the offering

Strategic targeting(value-based)

Decide whom to target

Strategic segmentation(value-based)

Divide customers into segments based on their

needs and resources

Identify customers' demographic and behavioral profile

Tactical segmentation(profile-based)

Channel C

Channel B

Channel A


Key Segmentation Principles: Relevance

Correct(relevant)

Incorrect(irrelevant)


Key Segmentation Principles: Similarity

Correct(homogeneous)

Incorrect(heterogeneous)


Key Segmentation Principles: Exclusivity

Correct(mutually exclusive)

Incorrect(non-exclusive)


Key Segmentation Principles: Comprehensiveness

Correct(collectively exhaustive)

Incorrect(not exhaustive)


Identifying Target Customers, Developing a Value Proposition, and Positioning

Value

Developing a value proposition

Identifying target customers

Positioning

Primary benefit


Identifying Target Customers, Developing a Value Proposition, and Positioning

Developing a value proposition

Identifying target customers

Positioning

Primary benefitValue


Value as a Function of Customer Needs and Offering Attributes

Customer needs

Company offering

Customer value


Dimensions of Customer Value

Functional value

Monetary value

Psychological value

Psychological benefitsPsychological costs

Monetary benefitsMonetary costs

Functional benefitsFunctional costs

Customer value


Reference-Point Dependence

Perceived value

Actual performance

Reference point

Gains

Losses


Loss Aversion

Perceived value

Actual performance

Value of a gain

Value of a loss


Diminishing Marginal Value

Attribute performance

Utility(perceived value)


Diminishing Marginal Value

Attribute performance

Utility(perceived

value)


The Value Function

Perceived value

Actual performance

Source: Kahneman, Daniel and Amos Tversky (1979), “Prospect Theory: An Analysis of Decision under Risk,” Econometrica, 47 (March), 263–91


Creating Superior Customer Value

Customer value

Functional value Monetary value

Competitive advantage

Value Value


Competitive Value Map

Competitive parity

Attribute 1 Attribute 2 Attribute 3 Attribute 4 Attribute 5

Company’s offeringCompetitive offering ACompetitive offering B

Customer value

Competitive advantage

Competitive disadvantage


Single-Benefit Positioning

Benefit 1

+Benefit 2

Benefit 3Benefit 4

Benefit 5

Primary benefit

Secondarybenefits

Reason to choose


Dual-Benefit Positioning

Benefit 1

+

Benefit 2

Benefit 3Benefit 4

Benefit 5

Primary benefits

Secondarybenefits

Reason to choose


Dual-Benefit Positioning

Reason to choose

Benefit 1

+

Benefit 2

Benefit 3Benefit 4

Benefit 5

Primary benefits

Secondarybenefits


Holistic Positioning

Benefit 1

Benefit 2

Benefit 3Benefit 4

Benefit 5

Overall benefit

Reason to choose


Holistic Positioning

Reason to choose

Benefit 1

Benefit 2

Benefit 3Benefit 4

Benefit 5

Overall benefit


Positioning Map

Attribute 1

Attribute 2

Offering A

Offering E

Offering C

Offering D

Offering B


The Three Dimensions of Company Value

Monetary value

Functional value

Psychological value

Company value

Strategic goals

Monetary goals


Creating Company Value: The Key Profit Drivers

Net income

Costs

Revenues

Competitors’customers

Current customers

New customers

New to the category

Research and development

Other costs

Marketing

Cost of goods sold

Volume

Price


Strategies for Growing Sales Volume

Market-growth strategy

Market-penetration strategy

Sales volume Steal-share strategy

New customers

Current customers

Customers new to the category

Competitors’ customers


Economic Value Analysis

Monetary value

Functional value

Psychological value

Company value

Monetizing functional value

Monetizing psychological value

Strategic value


Conflicts in Vertical Collaboration

Vertical channel conflict Horizontal channel conflict

Manufacturer

Distributor

Customer

Manufacturer

Customer

Distributor BDistributor A


Conflicts in Horizontal Collaboration

Customer

CollaboratorCompany



Figures: Part III


Product and Service Management as a Value-Creation Process

Product

Context

Customers

Competitors

Company

Collaborators Customer

valueCollaborator value

Company value

The Optimal Value

Proposition

Factors to consider Decision criteria

ServiceOVP


Branding as a Value-Creation Process

Brand

Context

Customers

Competitors

Company



Company value

The Optimal Value

Proposition


OVP


Vertical Brand Extensions

Price

Benefits

Upscale extension

Downscale extension

Core offering

Price tier A

Price tier B

Price tier C


Horizontal Brand Extensions

Price

Benefits

Extension B

Core offering

Extension A

CategoryA

CategoryB

CategoryC


Pricing as a Value-Creation Process

Price

Context

Customers

Competitors

Company



Company value

The Optimal Value

Proposition


OVP


Incentives as a Value-Creation Process

Incentives

Context

Customers

Competitors

Company



Company value

The Optimal Value

Proposition


OVP


Pull and Push Promotion Strategies

Manufacturer

Retailer

Customer

Incentives Communications


Demand

Demand

Push strategy

Manufacturer

Retailer

Customer


Demand

Demand

Pull strategy


Communication as a Value-Creation Process

Commu-

nication

Context

Customers

Competitors

Company



Company value

The Optimal Value

Proposition


OVP


Developing a Communication Plan

Goal

Tactics

Implementation

Strategy

Message

Media

Creative solution

Control


Distribution as a Value-Creation Process

Distri-bution

Context

Customers

Competitors

Company



Company value

The Optimal Value

Proposition


OVP


Distribution Channel Structure

Direct channel Indirect channels

Hybrid channel

Company

Wholesaler

Retailer

Customer

Retailer

CustomerCustomer



Figures: Part IV


Steal-Share Strategy

Current users

New users


Market-Growth Strategy

Current users

New users


Market-Growth Strategy for a Superior Offering

Current users

New users


Market-Innovation Strategy

Current usersNew users

Current market New market


Defensive Marketing Strategies

Do nothing

Customer costs

Customer benefits

Move upscale

Increase benefits

Reduce costs

Move downscale

Launch economy offering

Launch premium offering

Source: Hoch, Stephen J. (1996), “How Should National Brands Think about Private Labels?” Sloan Management Review, 37 (2), 89–102


Product-Market Growth Matrix

Current products

New products

Current customers New customers

Market penetration

Product development

Market development

Diversification

Source: Ansoff, H. Igor (1979), Strategic Management. New York, NY: John Wiley & Sons.


The SWOT Framework

Favorable factors

Unfavorable factors

Market analysis

Company analysis

External factors

Internal factors

Opportunities Threats

Strengths Weaknesses


Managing Sales Growth

Managing Sales Growth

Current customers

New customers Managing adoption

Managing usage


The Adoption Funnel

Purchase

Awareness

Attractiveness

Affordability

Availability


Identifying Adoption Gaps

All target customers

Aware of the offering’s existence

Perceive the offering to be

attractive

Perceive the offering to be

affordable

Have access to the offering

Purchased the offering

Attractiveness gap

Affordability gap

Purchase gap


Key Factors Influencing Consumption Quantity

Satisfaction

Usage frequency

Usage quantity

Replacement frequency

Availability

Purchase Repurchase

Consumption variables


Identifying Consumption Gaps

Purchased the offering

Satisfied with the offering

Use the offering

frequently

Use large quantity per

occasion

Repurchase the offering

Replace the offering

frequently

Usage quantity

gap

Replacement frequency

gap


New Product Adoption

Individual adoptions

Time

Inflection point

Individual adoptions over time

Time

Total adoptions

Inflection point

Market potential

Speed of diffusion

Cumulative number of adoptions over time


The Stage-Gate Approach for Minimizing Risk in New Product Development

Concept development

Idea generation

Business analysis

Product development

Market testing

Commercial deployment

Stage 2Stage 1 Stage 3 Stage 4 Stage 5 Stage 6

Gate 1 Idea

screening

Gate 2 Concept

screening

Gate 3 Business review

Gate 4 Product review

Gate 5 Market review


Managing the Product Life Cycle

Introduction Growth Maturity Decline

Sales

Time

Market size

Market growth

Competition

Small Moderate Large Moderate/Small

Low High Low Negative

Low Moderate High Moderate/Low

Source: Levitt, Theodore (1965), “Exploit the Product Life Cycle,” Harvard Business Review, 43, (November–December), 81–94.


Extending Product Life Cycle through Innovation

Sales revenues

Time

First generation

Second generation

Third generation

Source: Christensen, Clayton (1997), The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business School Press


Rogers’ Model of Adoption of Innovation

Innovators Early adopters Early majority Laggards

Number of adoptions

TimeLate majority

(x-2SD)

(x-SD)

(x)

(x+SD)

(2.5%) (13.5%) (34%) (16%)(34%)

Source: Rogers, Everett M. (1962), Diffusion of Innovations. New York, NY: Free Press


Rogers’ Model of Adoption of Innovation

Innovators Early adoptersEarly majority Laggards

Number of adoptions

TimeLate majority

(x-2SD)

(x-SD)

(x)

(x+SD)

(2.5%) (13.5%) (34%) (16%)(34%)

Source: Rogers, Everett M. (1962), Diffusion of Innovations. New York, NY: Free Press


Moore’s Technology Adoption Model

Enthusiasts Visionaries Pragmatists Skeptics

Early market Mainstream market

Conservatives Time

Number of adoptions

The chasm

Source: Moore, Geoffrey A. (1991), Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers. New York, NY: HarperBusiness


Product-Line Positioning Map

Attribute 1

Attribute 2

Offering A

Offering E

Offering C

Offering D

Offering B

Target A

Target CTarget B

Target E

Target D


Product-Line Attribute Value Map

Offering A Offering B Offering C Offering D Offering E

Attribute 1Attribute 2Attribute 3

Value

(Target A) (Target B) (Target C) (Target D) (Target E)

Product line

Attribute 4


Vertical Product-Line Extensions

Price

Benefits

Upscale extension

Downscale extension

Core offering


Horizontal Product-Line Extensions

Price

Benefits

Extension B

Core offering

Extension A


Product-Line Cannibalization

Dual-offering scenario with cannibalization

Loss of share dueto cannibalization

New offering

Competitive offerings

Existing offering

A' C

B'

Single-offering scenario-

Existing offerings


ANew offering


Existing offering

Dual-offering scenario without cannibalization

A

B


Product-Line Cannibalization and the Price-Benefit Tradeoff

Price

Benefits

A

B

C

D E

F

Value-equivalence line


The Fighting Brand Strategy

Price Quality

Time

Incumbent brand

Fighting brand

Low-pricecompetitors


The Sandwich Strategy

Price Quality

Time

Incumbent brand

Fighting brand

Premium brand



The Good-Better-Best Strategy

Price Quality

Time

Incumbent brand

Good

Better

Best




Figures: Part V


The Business Model as a Value-Creation Process

Customer value

Collaborator value

Company value

OVP

StrategyTactics

Customer value model

StrategyTactics

Collaborator value model

StrategyTactics

Company value model


Customer Value Model

Incentives


Price


Customer value

Value proposition


Collaborator Value Model

Incentives


Price


Collaborator

value

Value proposition


Company Value Model

Incentives


Price


Company value

Value proposition

© 2014 Alexander Chernev. About this Slide Deck ✦ This slide deck includes figures from Strategic...

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Transcript of © 2014 Alexander Chernev. About this Slide Deck ✦ This slide deck includes figures from Strategic...