L10 Customer L10 Customer ManagementManagement

EC10: Innovation & CommercialisationEC10: Innovation & CommercialisationWhat it takes to build a successful Venture TeamWhat it takes to build a successful Venture Team

Marcus ThompsonMarcus Thompsonwmt1@stir.ac.ukwmt1@stir.ac.uk

L1: Team BuildingL1: Team Building

OutlineOutline

TargetingTargeting CommunicationsCommunications BrandingBranding Performance ManagementPerformance Management

1. Targeting 1. Targeting

EC10 Innovation & EC10 Innovation & CommercialisationCommercialisation

Assessing Emerging OpportunitiesAssessing Emerging Opportunities

InformationMarket CharacteristicsProduct CharacteristicsBuyer Characteristics

AnalysisCritical relationshipsKey Success Factors

SynthesisRefine Critical relationships

New Opportunity

Process is interactive – each cycle refines the opportunity

Wickham, Strategic Marketing, Pitman, p158, 1998

RevenueRevenue

Marketing is about Marketing is about having different having different revenue streams.revenue streams.

(FBDS is about adding revenue streams!)(FBDS is about adding revenue streams!)

1.1. Advertising MediaAdvertising MediaShows – public/buyersShows – public/buyersPeriodicals – local national & internationalPeriodicals – local national & internationalTelevision & Radio – Television & Radio – Heartland FMHeartland FM

LeafletsLeafletsPosters & SignsPosters & SignsPoint of Sale Material – Point of Sale Material – car stickerscar stickers

Direct Mail – Direct Mail – letters & insertsletters & inserts

Electronic media - Electronic media - – PDF & HTM formatPDF & HTM format– E-zinesE-zines

Web Pages & transaction site

Measuring AdvertisingMeasuring AdvertisingThe ReachThe Reach– The number of the target audience who are expected The number of the target audience who are expected

to receive the message.to receive the message.FrequencyFrequency– The number of times the audience will be exposed to The number of times the audience will be exposed to

the message.the message.

RecencyRecency– When and how often contact is made.When and how often contact is made.

ImpactImpact– Compatibility between the medium and the message.Compatibility between the medium and the message.

ContinuityContinuity– Length of time of the campaign and its timingLength of time of the campaign and its timing

Source: International Marketing, p 315, Paliwoda, CIM 1993

2.2. Public RelationsPublic Relations““The deliberate, planned and sustained effort to establish The deliberate, planned and sustained effort to establish and maintain understanding between an organisation and maintain understanding between an organisation and its publics”and its publics”Concerned more with image than the company identity.Concerned more with image than the company identity.Publics include; employees, consumers, suppliers, Publics include; employees, consumers, suppliers, financial backers, opinion formers, local community and financial backers, opinion formers, local community and customers.customers.Activities include press releases, feature articles, Activities include press releases, feature articles, photographs broadcast interviews.photographs broadcast interviews.Used in sponsorship, audio-visual presentations, Used in sponsorship, audio-visual presentations, exhibitions, conferences, special events, direct exhibitions, conferences, special events, direct marketing, corporate events.marketing, corporate events.PR success is based on good copy and can only be PR success is based on good copy and can only be done by a skilled professional i.e. journalist.done by a skilled professional i.e. journalist.

3.3. Sales PromotionsSales Promotions

A range of tactical marketing techniques A range of tactical marketing techniques designed and placed within a strategic designed and placed within a strategic framework to add value to a product or service framework to add value to a product or service in order to achieve specific sales and marketing in order to achieve specific sales and marketing objectives. objectives. (American Marketing Association,1998)(American Marketing Association,1998)

Sales promotions involves incentives & Sales promotions involves incentives & objectives to encourage consumers or trade objectives to encourage consumers or trade customers to purchase a brand sooner, in customers to purchase a brand sooner, in larger quantities or more frequently. larger quantities or more frequently. (Spethmann (Spethmann 2001)2001)

Can be viewed as an acceleration toolCan be viewed as an acceleration tool.(Neslin .(Neslin 1984)1984)

3.3. Sales PromotionsSales Promotions

Point of Sales (POS), Advertising and DisplaysPoint of Sales (POS), Advertising and DisplaysSpecialty Advertising & Give-awaysSpecialty Advertising & Give-awaysSpecial Offers & Selective DiscountingSpecial Offers & Selective DiscountingCompetitionsCompetitionsCo-operative advertisingCo-operative advertisingSpecials for Trade Shows, Exhibitions & DemosSpecials for Trade Shows, Exhibitions & DemosDirectories & Yellow PagesDirectories & Yellow PagesInternet - Internet - Web, Electronic Marketing & NewsgroupsWeb, Electronic Marketing & Newsgroups

Trade Incentives - Buyer discounts, Trade Incentives - Buyer discounts,

Source: International Marketing, Paliwoda, p314, CIM 1993

Sales Promotions ExamplesSales Promotions Examples

Premiums – discounting through coupons, free items Premiums – discounting through coupons, free items (BOGOF), Give-aways (pens, calendars etc.)(BOGOF), Give-aways (pens, calendars etc.)Incentives – higher priced products through contests, Incentives – higher priced products through contests, rebates and loyalty bonusesrebates and loyalty bonusesProduct samples – free trial or tasterProduct samples – free trial or tasterPromotional Tie-ins – arrangements between producers Promotional Tie-ins – arrangements between producers or between producer and retailer. or between producer and retailer. Visual Displays – stimulate in-store purchasesVisual Displays – stimulate in-store purchasesLoyalty Reward SchemesLoyalty Reward Schemes

Sales Promotions StrategiesSales Promotions Strategies

CommunicationCommunication– While advertising builds the value proposition eg a product has While advertising builds the value proposition eg a product has

changed or improved, sales promotions puts the product into the changed or improved, sales promotions puts the product into the purchasers view so they can judge the advertising claim ie grab purchasers view so they can judge the advertising claim ie grab attentionattention

IncentiveIncentive– Giving a buyer the incentive to behave in a certain way, by Giving a buyer the incentive to behave in a certain way, by

agreement, which leads to a reward. Often aimed at switching agreement, which leads to a reward. Often aimed at switching brands or fortifying loyalty against new entrant,brands or fortifying loyalty against new entrant,

InvitationInvitation– Make the consumer consider the product and buy it in a short Make the consumer consider the product and buy it in a short

space of time. Based on urgencyspace of time. Based on urgency

Channel of DistributionChannel of DistributionThe channel determines the amount of control The channel determines the amount of control you have over promotionsyou have over promotionsChannel is the path that a product takes from Channel is the path that a product takes from producer to final user.producer to final user.– Direct when you, the producer, sells to the customer.Direct when you, the producer, sells to the customer.– Indirect when it involves more than one intermediary Indirect when it involves more than one intermediary

e.g. co-operative farm shop.e.g. co-operative farm shop.– The producer supplies an intermediary who is The producer supplies an intermediary who is

responsible for the sales transactions that move the responsible for the sales transactions that move the product. (they own the customer)product. (they own the customer)

– Classified by whether they have title to goodsClassified by whether they have title to goodsRetailers, Agents, Distributors, Producer OrganisationsRetailers, Agents, Distributors, Producer Organisations

Channel EvaluationChannel Evaluation

Direct SellingDirect Selling– For - highest margin, control over selling proposition to For - highest margin, control over selling proposition to

customer, opportunity to cross-sell.customer, opportunity to cross-sell.– Against – Expensive to capture customers. Difficult to retain. Against – Expensive to capture customers. Difficult to retain.

High promotions cost. Securing payment. High promotions cost. Securing payment.

IntermediariesIntermediaries– For – Concentrate on core business of producing. No For – Concentrate on core business of producing. No

transaction costs. Limited risk of bad debt (sic). No investment in transaction costs. Limited risk of bad debt (sic). No investment in location or infrastructure.location or infrastructure.

– Against – Producer is distant from customer & trends. Producer Against – Producer is distant from customer & trends. Producer has no control over seasonal buying patterns. Subject to price has no control over seasonal buying patterns. Subject to price sensitive negotiations. sensitive negotiations.

Channel OptionsChannel Options

Neither is better and every producer should have Neither is better and every producer should have a mix of channels available to crate a a mix of channels available to crate a competitive and sustainable business model. competitive and sustainable business model. This will allow best profit today to be set against This will allow best profit today to be set against the ability to control the growth of the business.the ability to control the growth of the business.The are two distinct sales channelsThe are two distinct sales channels– Business to Business (b2b)Business to Business (b2b)– Business to Consumer (b2c)Business to Consumer (b2c)

There are two value propositionsThere are two value propositions– High value, low volumeHigh value, low volume– High volume, low valueHigh volume, low value

2. Communications2. Communications

Communicating is one of the most Communicating is one of the most important tools in recovering from important tools in recovering from mistakes. When you tell someone, be mistakes. When you tell someone, be it a designer, a customer, or the CEO it a designer, a customer, or the CEO of the company, "Look, we've got a of the company, "Look, we've got a problem. Here's how we're going to problem. Here's how we're going to fix it," you diffuse the fear of the fix it," you diffuse the fear of the unknown and focus on the solution.'unknown and focus on the solution.'

Michael DellMichael Dell

Communications Communications

How to sell more profitably, to How to sell more profitably, to the right people by using the the right people by using the best means (channel) to best means (channel) to persuade thempersuade them..

Communications assumes you already Communications assumes you already know who you want to sell to, how you can know who you want to sell to, how you can do it profitably and why customers should do it profitably and why customers should buy from you rather than someone else.buy from you rather than someone else.

The Promotions Challenge for New The Promotions Challenge for New Technology BusinessesTechnology Businesses

““I don’t know who you are.I don’t know who you are.

I don’t know where you are.I don’t know where you are.

I don’t know what you sell.I don’t know what you sell.

I don’t know what’s special about what you do.I don’t know what’s special about what you do.

I don’t know how good your reputation is.I don’t know how good your reputation is.

Remind me - what was it you wanted to Remind me - what was it you wanted to

sell mesell me??””

Effective CommunicationsEffective Communications

““The transmission of a chosen message through any form of The transmission of a chosen message through any form of media to an identifiable target audience.”media to an identifiable target audience.”

Noise

Sender Message Channel Receiver

Source: Paliwood,1993 International Marketing, CIM, p317

Feedback

PromotionsPromotions

Any form of communications that is Any form of communications that is used to inform, persuade or remind used to inform, persuade or remind people of a product and its people of a product and its characteristics. characteristics.

Promotions Mix includes:Promotions Mix includes:1.1. AdvertisingAdvertising

2.2. Public RelationsPublic Relations

3.3. Personal Selling Personal Selling

4.4. Sales PromotionsSales Promotions

Organisational Responsibility for Organisational Responsibility for MarketingMarketing

In a manufacturing companyIn a manufacturing company - people in the - people in the lab and supply partners who make the lab and supply partners who make the product may not the same people who sell product may not the same people who sell the product to the customer, or who convince the product to the customer, or who convince the customer to buy.the customer to buy.

But in a service companyBut in a service company, the same people , the same people who deliver the service, are the same people who deliver the service, are the same people selling the serviceselling the service– ie. web designers, research technicians,ie. web designers, research technicians,

Internal MarketingInternal Marketing

““selling” your employees and selling” your employees and strategic partners on the purpose of strategic partners on the purpose of what you are doingwhat you are doing

convincing stakeholders to try their convincing stakeholders to try their best and make them enthusiastic best and make them enthusiastic about serving the customerabout serving the customer

Managing EvidenceManaging Evidence

the process of using some tangible cues the process of using some tangible cues and hints to help the customer understand and hints to help the customer understand the benefits of what you are sellingthe benefits of what you are selling

the physical environment in which the the physical environment in which the service is sold service is sold – If you want people to think your technology is a If you want people to think your technology is a

world beater make sure it looks expensive and world beater make sure it looks expensive and is presented carefullyis presented carefully

Pricing - charging a high price always Pricing - charging a high price always makes people think they are getting a makes people think they are getting a good dealgood deal

3. Branding3. Branding

What is a Brand?What is a Brand?A brand is a name, term, sign, symbol, design A brand is a name, term, sign, symbol, design or or

combinationcombination, which is used to identify the goods or , which is used to identify the goods or services of one seller and differentiate them from services of one seller and differentiate them from those of the competition. those of the competition. (Dibbs 2001)(Dibbs 2001)

Its aim is to encourage differentiation from the Its aim is to encourage differentiation from the competition to encourage customer loyalty. competition to encourage customer loyalty.

This can include:This can include:Appealing to different market segmentsAppealing to different market segmentsCapturing those consumers who like to switch brandsCapturing those consumers who like to switch brandsGaining more exposure in the mediaGaining more exposure in the mediaOffer internal focus and clarity within a business (embedded shared Offer internal focus and clarity within a business (embedded shared

values.)values.)

Brand LoyaltyBrand LoyaltyLoyalty “Loyalty “is a strongly motivated and long standing decision is a strongly motivated and long standing decision

to purchase a particular product or service to purchase a particular product or service (Dibb (Dibb et al, et al, 2001, p271).2001, p271).

A brand can attract & retain customers by promoting A brand can attract & retain customers by promoting value, image, prestige and lifestyle values.value, image, prestige and lifestyle values.

It has six meanings:It has six meanings:Attributes Attributes Benefits Benefits Values Values Personality Personality Cultural Fit Cultural Fit UserUser

Three Levels of AwarenessThree Levels of Awareness

Recognition.Recognition. Aware that a brand exists and views it is an Aware that a brand exists and views it is an alternative to purchase if the preferred brand is alternative to purchase if the preferred brand is

unavailableunavailable

Preference. Preference. Prefers one brand to another. If chosen brand is Prefers one brand to another. If chosen brand is

unavailable then consumer chooses a substitute brand.unavailable then consumer chooses a substitute brand.

Insistence. Insistence. The customer will only ever purchase the one kind of The customer will only ever purchase the one kind of

brand and is willing to spend time and effort to acquire brand and is willing to spend time and effort to acquire that particular brand.that particular brand. (Miller 1998) (Miller 1998)

The Customer is King?The Customer is King?

SatisfiedStayers

Hostages

HappyWonderers

Dealers

Customer Satisfaction

Customer Loyalty

High

Low

High Low

Piercy, 2002, p29 Market – Led Strategic Change

Seem happy butnot always loyal

Loyal but tied for location, emotional or psychological reasons

Not satisfied and move brands for best deals. To be avoided.

Ideal but danger of complacency

Satisfaction Verses LoyaltySatisfaction Verses Loyalty

Satisfaction is an AttitudeSatisfaction is an Attitude– How a customer feels about a company, product How a customer feels about a company, product

or serviceor service

Loyalty is a behaviour Loyalty is a behaviour – Do they come back and buy more.Do they come back and buy more.

Most firms measure satisfaction (at point of Most firms measure satisfaction (at point of sales e.g., a new car.sales e.g., a new car.

Loyalty as ValueLoyalty as Value

Committed LoyalistCommitted Loyalist– Place high value and wiling to pay a premium.Place high value and wiling to pay a premium.

Feature LoyalistFeature Loyalist– Place high value on particular features – may be Satisfied Stayers Place high value on particular features – may be Satisfied Stayers

or Hostages.or Hostages. Convenience loyalistConvenience loyalist

– Stick with it – Hostages e.g. bank?Stick with it – Hostages e.g. bank? Channel LoyalistChannel Loyalist

– Places value on Channel e.g. likes Pepsi but eats at MacDonald's Places value on Channel e.g. likes Pepsi but eats at MacDonald's so drinks coke.so drinks coke.

Lack of ChoiceLack of Choice– No choice. e.g., employer buys computer.No choice. e.g., employer buys computer.

Price LoyalistPrice Loyalist– Wants the best price for the performance (dealers)Wants the best price for the performance (dealers)

Why Brands WorkWhy Brands Work A strong brand commands higher price and higher A strong brand commands higher price and higher

margins.margins. A strong brand focuses consumers on specific points of A strong brand focuses consumers on specific points of

differentiation ranging from unique features to emotional, differentiation ranging from unique features to emotional, image-orientated benefits. image-orientated benefits. (Davis 2002)(Davis 2002)

BUTBUT Brand equity requires continuous development, Brand equity requires continuous development,

investment, skillful advertising and excellent customer investment, skillful advertising and excellent customer service.service.

It must be protected as part of the Intellectual Property of It must be protected as part of the Intellectual Property of the business.the business.

Independent businesses (can) sell provenance far better Independent businesses (can) sell provenance far better than multi-nationals.than multi-nationals.

Given a choice everyone wants to buy local fresh Given a choice everyone wants to buy local fresh produce.produce.

Benefits of Brand Equity Benefits of Brand Equity Reduced marketing costs because of high Reduced marketing costs because of high

customer awareness & loyalty.customer awareness & loyalty. More leverage when negotiating with More leverage when negotiating with

suppliers, advertisers and punters.suppliers, advertisers and punters. Charge higher prices than other areas.Charge higher prices than other areas. Opportunities for brand extensions.Opportunities for brand extensions. Defense against competition from other Defense against competition from other

areas.areas.

Brand IssuesBrand Issues

Ability to cope with local nuancesAbility to cope with local nuances Making it uniqueMaking it unique Brand namingBrand naming Brand ownershipBrand ownership Brand usageBrand usage Faithful reproductionFaithful reproduction ConsistencyConsistency Adapted from Mazur & Hogg, The Marketing

Challenge,, CIM, p123

Brand AuditBrand AuditWhat is our product – its physical components

How do Consumers perceive it? Who are the competitors?

Who is the brand, its personality and the message we use to express it?

Execution modified by local & cultural nuances

Positioning Strategy

Attract new customers

Overcome prejudices/to lapsed customers

Reinforce for existing customers

Source: Modified from LANNNON, The Marketing Challenge, CIM p146

What Next?What Next?

1. Where are we now?

4. Which is the best way?

3. How are we going to get there?

2. Where do we want to be?

5. How we ensure that we arrive?

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4. Performance Management4. Performance Management

How to Kill CreativityHow to Kill Creativity

• When leadership becomes dominanceWhen questioning becomes accusationWhen assertiveness becomes aggressionWhen myopia becomes focusWhen opportunities become problemsWhen arrogance becomes confidenceWhen structures become stricturesWhen inclusion becomes exclusionWhen rules become constraints When support becomes ownership When capabilities become impediments When habits become free-thinking When experience becomes intoleranceWhen collaboration becomes fragmentationWhen identity becomes an excuse