Customer Mix: Strategic Marketing & Communication

The New Marketing Mix:The New Marketing Mix:From Products to From Products to

Customer RelationshipsCustomer Relationships

Carlos F. CamargoCarlos F. Camargo

Where We Are Transition

Where We Need

To Be

Every Organization Faces Every Organization Faces Transition Transition

Much of the Problem Is Much of the Problem Is Where We’ve BeenWhere We’ve Been

194019401930193019201920 19501950 19601960

Marketplace Marketplace TransitionsTransitions

Product Development

Nationalization

Distribution

Depression

War Years

Re-Construction

Baby-Boom

Development of Marketing

198019801970197019601960 19901990 20002000

Marketplace Marketplace TransitionsTransitions

Re-emergence ofcompetition

Globalization

Rise of Quality

Price Competition

Cost-CuttingRe-engineering

Logistics/Digitalization

Transition of Information Technology

21st CenturyMarketplace

ProductProduct

CustomerCustomer

DistributionDistribution

Three Types of Organizations Three Types of Organizations EvolvedEvolved

Historical

Current

21st Century

Because of Where We’ve Because of Where We’ve Been, Marketing and Been, Marketing and Communications AreCommunications AreUnnatural Acts for Many Unnatural Acts for Many Organizations! Organizations!

Most Product-Focused Firms Most Product-Focused Firms Are Managed with the 4Ps Are Managed with the 4Ps Product - “best in class”Product - “best in class” Price - constant adjustments Price - constant adjustments Place (Distribution) - field Place (Distribution) - field

sales/channelssales/channels Promotion - deals, discounts and Super Promotion - deals, discounts and Super

Bowls Bowls

In a 4Ps-Managed Firm, In a 4Ps-Managed Firm, You Don’t Need Brands or You Don’t Need Brands or Marketing or Marketing or Communications Communications

All You Need Is a Superior All You Need Is a Superior Product, Lowest Price, Best Product, Lowest Price, Best Distribution, Most Exciting Distribution, Most Exciting Promotion, Or, Some Promotion, Or, Some Combination of Those Combination of Those Elements! Elements!

Product DrivenProduct Driven

RawRaw MaterialsMaterials

TechnologyTechnologyFacilitiesFacilities

MoneyMoney

DistributionDistribution LocationLocation

DistributionDistribution AggregationAggregation

Needs/Needs/WantsWants

PurchasingPurchasingPowerPowerConsumerConsumer

MediaMedia

ChannelChannel

MarketerMarketer

Information

Or, If You’re a Distribution-Or, If You’re a Distribution-Driven Firm, All You Need Is Driven Firm, All You Need Is Location, Location, Location Location, Location, Location And, Channels, Channels, And, Channels, Channels, Channels!Channels!

Distribution-DrivenDistribution-Driven

DistributionDistributionConcentrationConcentration

LocationsLocationsTechnologyTechnology

ConsumerConsumer

MediaMedia

Mktr.Mktr. Mktr.Mktr. Mktr.Mktr.

ChannelChannel(Logistics)(Logistics)Information

Those Were Before the Those Were Before the Transition of Information Transition of Information TechnologyTechnology

That Created a Totally New, That Created a Totally New, Interactive Marketplace Interactive Marketplace

198019801970197019601960 19901990 20002000

Marketplace Marketplace In TransitionIn Transition

Re-emergence ofcompetition

Globalization

Rise of Quality

Price Competition

Cost-CuttingRe-engineering

Logistics/Digitalization

Transition of Information Technology

21st CenturyMarketplace

Customer-DrivenCustomer-Driven

Needs/WantsNeeds/WantsChoiceChoice

Purchasing Purchasing PowerPower

TechnologyTechnologyCustomerCustomer

ChannelChannel


ChannelChannel

Information

MediaMedia MediaMedia MediaMedia

CustomerCustomer

MediaMedia

ChannelChannel

MarketerMarketer

Information

ProductProductMarketersMarketers

CustomerCustomer

Information

ChannelChannel


DistributionDistribution MarketersMarketers

MediaMedia

CustomerCustomer

ChannelChannel

Mktr.Mktr.

Information

Mktr.Mktr. Mktr.Mktr.

ChannelChannel

MediaMedia MediaMedia

CustomerCustomer MarketersMarketers

MediaMedia

CustomerCustomer

MediaMedia

ChannelChannel

MarketerMarketer

Information


CustomerCustomer

Information

ChannelChannel



MediaMedia

CustomerCustomer

ChannelChannel

Mktr.Mktr.

Information


ChannelChannel



MediaMedia

Information Technology Information Technology Transition Shifts Transition Shifts Marketplace Power Marketplace Power

CustomerCustomer

MediaMedia

ChannelChannel

MarketerMarketer

Information


CustomerCustomer

Information

ChannelChannel



MediaMedia

CustomerCustomer

ChannelChannel

Mktr.Mktr.

Information


ChannelChannel



MediaMedia

The New MarketplaceThe New Marketplace

Customer knowledge and choiceCustomer knowledge and choice Time and distance no longer relevantTime and distance no longer relevant Perfect global information on prices Perfect global information on prices

and alternativesand alternatives Speed of response demanded Speed of response demanded

Customer-DrivenCustomer-Driven

Needs/WantsNeeds/WantsChoiceChoice

Purchasing Purchasing PowerPower

TechnologyTechnologyCustomerCustomer

ChannelChannel


ChannelChannel

Information

MediaMedia MediaMedia MediaMedia

A New Role for Marketing A New Role for Marketing and Communication and and Communication and Brands Brands

Basis:Basis: Best Practices in IMC - 1997Best Practices in IMC - 1997 Brand Communication ROI - 1997Brand Communication ROI - 1997 Best Practices in Branding - 1998Best Practices in Branding - 1998 Holistic Use of Data - 2000Holistic Use of Data - 2000

Best Practices in IMCBest Practices in IMC Major Finding - Four stagesMajor Finding - Four stages

The 4 Levels of Integrated The 4 Levels of Integrated Marketing CommunicationsMarketing Communications

Tactical CoordinationLevel 1:

Level 2:

Redefining Scope of Marketing Communication

Level 3:

Application of Information Technology

Level 4:

Financial andStrategic Integration

Key IMC Findings:Key IMC Findings: Communication as core competency Communication as core competency Gathering and sharing dataGathering and sharing data Resource allocation based on Resource allocation based on

customer valuecustomer value Marcom at higher level - credibility Marcom at higher level - credibility

Brand Communication ROIBrand Communication ROI

Managing customer and prospect Managing customer and prospect income flows income flows

Closed-loop systemsClosed-loop systems Incremental returnsIncremental returns Marginal cost and revenue Marginal cost and revenue

Closed Loop SystemsClosed Loop Systems

MeasurableCustomerBehavior

PresentCustomerDatabase

Measurable, Marketer-Controlled

Brand Activities

EffectsMeasures

UncontrollableBrand Marketing

From Environment

Base Measure$ Income Flows

Compet- New &Present itive Emerging

Users Users Users1 Present Income Flow in Category $ $ $2 Share of Requirements % % %3 Customer Income Flow to Brand $ $ $4 Contribution Margin % % % %5 Contribution Margin $ $ $ $6 Income Flow Without A Brand

Communication Program $ $ $7 Contribution Margin Without A

Brand Communication Program $ $ $8 Income Flow With A Brand

Communication Program $ $ $9 Gross Contribution Margin With A

Brand Communication Program $ $ $10 Brand Communication Investment $ $ $11 Net Contribution Margin $ $ $12 Difference in Contribution Margins With

and Without Brand Communication $ $ $13 Incremental Gain or Loss $ $ $14 Return On Investment % % %

Basic R-O-C-I ProcessBasic R-O-C-I Process

Brands and Branding Brands and Branding Management leadershipManagement leadership Clearly defined brand structuresClearly defined brand structures Clearly articulated brand promise/value Clearly articulated brand promise/value

proposition proposition Holistic communication - 360 degree Holistic communication - 360 degree

view view

5 Key Success Factors in 5 Key Success Factors in Branding Branding

Self knowledge and absolute clarity on Self knowledge and absolute clarity on what the brand is, what it stands for, what the brand is, what it stands for, and what it represents ….and what it represents ….

Based on information gathered from all Based on information gathered from all parties: customers, management, parties: customers, management, employees, and other relevant employees, and other relevant stakeholders …stakeholders …

5 Key Success Factors 5 Key Success Factors (cont.)(cont.)

Communicated clearly and consistently to Communicated clearly and consistently to diverse audiences ...diverse audiences ...

Supported by products/services, business Supported by products/services, business systems and policies that enable consistent systems and policies that enable consistent delivery on the core promise ...delivery on the core promise ...

Instilled at all levels of the organization.Instilled at all levels of the organization.

How Can We Relate These How Can We Relate These Best Practices to the Best Practices to the Challenges We all Face in Challenges We all Face in Getting Noticed and Getting Noticed and Promoting LoyaltyPromoting Loyalty

A New View: A New View: What Can Brands, Marketing What Can Brands, Marketing And Communication Do to And Communication Do to Build Your Business?Build Your Business?

Radical Ideas:Radical Ideas: Marketing from a cost to a profit centerMarketing from a cost to a profit center Focusing on outcomes, not outputsFocusing on outcomes, not outputs Managing income flows, not marketing Managing income flows, not marketing

programs programs

Four Goals of BusinessesFour Goals of Businesses Increase cash flowsIncrease cash flows Accelerate cash flowsAccelerate cash flows Stabilize cash flows Stabilize cash flows Build brand equity or shareholder value Build brand equity or shareholder value

You Can Do That With:You Can Do That With:

Productivity Productivity Quality Quality ProcessesProcesses New productsNew products Brands, marketing and Brands, marketing and

communication communication

My Argument: My Argument: Marketing and customer focusMarketing and customer focus Integration and holistic views Integration and holistic views Brands and brandingBrands and branding Dialogs and communication Dialogs and communication On-going relationshipsOn-going relationships

In Short, In Short, Use Marketing, Brands and Use Marketing, Brands and Communication as Value Communication as Value Drivers and Value Builders Drivers and Value Builders

Companies With Strong Brand Companies With Strong Brand Relationships Relationships

Get higher “share of wallet” - (increased revenues)Get higher “share of wallet” - (increased revenues) Get a price premium - (increased revenues)Get a price premium - (increased revenues) Achieve faster acceptance of new offerings, I.e. Achieve faster acceptance of new offerings, I.e.

“time to market” and “time to money”“time to market” and “time to money” Have less cash flow volatility, less risk - (steady Have less cash flow volatility, less risk - (steady

cash flow) cash flow) Keep their market share with less resources Keep their market share with less resources

allocated to marketing and communication - allocated to marketing and communication - (decreased costs)(decreased costs)

Source: Storbacka, CRM

Brands, Marketing and Brands, Marketing and Communication Must Contribute to Communication Must Contribute to Business Goals Business Goals

Must Provide Returns, Not Just Must Provide Returns, Not Just Expenses Expenses

Only Customers Can Only Customers Can Increase, Accelerate, Increase, Accelerate, Stabilize Cash Flows orStabilize Cash Flows orBuild Market Value Build Market Value

Marketers Should Manage Marketers Should Manage for The Best Customer Mix, for The Best Customer Mix, Not The Best Product Mix Not The Best Product Mix

To Turn Marketing, Brands To Turn Marketing, Brands And Communication Into And Communication Into Value Drivers, We’ll Need: Value Drivers, We’ll Need:

Processes, not functionsProcesses, not functions Strategies, not more tactics Strategies, not more tactics Integrated planning approachesIntegrated planning approaches Financial measurement systemsFinancial measurement systems

External/Internal Alignment

Prod-uction

Sales

Mar-keting

External Suppliers

InternalOper-ations

ExternalActivities Customers

Integrating the System,Not the Pieces and Parts

1. Customer Identification from Behavioral Database

2. Valuation of Customers/ Prospects

3. Creating and Delivering Brand Communication

4. Estimating Return-on-Customer- Investment

5. Budgeting, Allocation & Evaluation

The 5-Step Integrated Brand The 5-Step Integrated Brand Communication ProcessCommunication Process

IBC

Where We Are Transition

Where We Need

To Be

Every Organization Faces Every Organization Faces Transition Transition

CustomerCustomer

MediaMedia

ChannelChannel

MarketerMarketer

Information


CustomerCustomer

Information

ChannelChannel



MediaMedia

CustomerCustomer

ChannelChannel

Mktr.Mktr.

Information


ChannelChannel



MediaMedia

The Challenge:The Challenge:

Become customer-focusedBecome customer-focused Market through brands and Market through brands and

relationshipsrelationships Turn communication into a value-Turn communication into a value-

driverdriver Measure financial returns Measure financial returns

That’s the Challenge of the That’s the Challenge of the 21st Century Marketplace21st Century Marketplace

Thank You for Your Time, Thank You for Your Time, Your Attention and Your Attention and Hopefully, Your InterestHopefully, Your Interest

Carlos’ email AddressCarlos’ email Address [email protected]@infoprax.com

Date post:	16-Apr-2017
Category:	Business
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