Marketing Strategy Final

What did Harrah's former COO Gary Loveman say about understanding the lifetime value?

"Understanding the lifetime value for our customers would be critical to our marketing strategy. Instead of focusing on how much people spent in our casinos during a single visit, it became clear that we needed to focus on their potential worth over time"

How has outside-in organizations become more broader than market-driven organizations?

- Achieving and sustaining superior customer value - Looking at our customers and the value that our customers look at - Not limiting ourselves to just looking at the revenues and earning - More paranoid about customer value and how the competition may pressure. Always thinking forward based on the four imperatives

Protecting the brand

- Anticipating brand challengers: take outside in view to competition, seek homogeneous market segments (competitor coming in when we all look the same), challenge brands entering market - Using protective legal and strategic moves: trade secrets and patents, copyrights, trademarks, exclusive deals

What is brand association?

- Attributes of brand deep seated in customer's minds - Hopefully something positive so that customers relate your brand to something positive. Don't have to have purchased the brand to have brand association - Ex: Kleenex has become a generic term. You say can you give me a Kleenex even if it isn't the exact brand.

What all does brand equity include?

- Brand awareness - Brand loyalty - Perceived quality - Brand association - Brand assets

How do you leverage existing brands across categories?

- Brand fit: Congruency in image, benefits and customer type associated with original brand - Leverage the brand for different products serving different needs: Distinct customer, distinct customer needs, distinct customer benefits

What are insight process measures?

- Comments on quality of reports or ideas shared - Rate quantity and quality of market insight contributed - Measure trust of providers

What does it mean to have an outside-in minded leadership?

- Communicate a compelling vision - Make sure they have the resources that support this strategy - Willing to override Silos - Send innumerable signals that encourage outside-in thinking

What are customer brand roles?

- Conveys information about the product, make sure the brand shows what the brand is - Educates the customer about the product - Helps reassure the customer in purchase decision

What is a chief customer officer responsible for?

- Designing and executing the firms customer relationship strategy and overseeing all customer-facing functions - Promotes a customer centric culture and removes obstacles to the flow of customer information throughout the organization, includes getting leaders to regularly engage with customers - Accountable for increasing the profitability of the firms customers, as measured by metrics such as customer lifetime value and customer equity as well as by intermediate indicators, such as word of mouth

How can individuals earn the marketing leadership role?

- Gain credibility and buy-in, important to have CMO that can take authority and resources that can drive the organizations - Be an expert on the market, understand how it's an important part of strategic development - Keep the focus on the customer, help organization be customer centric, drive innovation with the customer - Obsess about talent, make sure that we select well and training/retaining employees - Accept accountability and advocate for metrics. how can we show that marketing enhances customer relationship and brand. - Partner with sales, how can two organizations work together. marketing can help sales make job easier but sales needs to provide marketing with necessary information - Show relevance to the C suite, sharing information throughout organization and how it can contribute to strategy of organization

What are the types of organizational structures for outside-in companies?

- Have to have the right outside-in culture: Made up of activities that are supported to providing superior value to the customer - Alignment of organization with the market: Can look at the structure, metrics, incentives. Everyone has accountability for making sure they're supporting customer value - Capabilities for competing on customer value: Making sure the processes are in place where the company can implement the four imperatives on a continual basis. Systematic procedures based on the imperatives

Building a strong brand: Designing brand architecture

- House of brands Ex: Apple named products with i infront of it like iPhone iPad. Google has google books, google groups, google maps, etc. - Corporate brand, sub brands that operate independently Ex: Proctor and Gamble own Tide, Folgers, Pampers - Hybrid of two, using both the brand house and corporate brands Ex: Coca Cola has products with Sprite and minute made

What is a market-driven/oriented organization?

- Identifying and satisfying customer needs better than competitors. Always looking at whats going on within the market and trying to maintain place within that market - Superior ability to understand, attract, and keep valuable customers - Purpose of business is to satisfy and attract customers that give us that profit - Responds to what's occurring in that market place

Building a strong brand: Creating brand awareness. What are the 5 brand effects?

- Improved customer knowledge - Increased attitudinal loyalty - Repeat purchase behavior - Endorsements - Ease in recruiting Essential for target audiences and opinion-leading endorsers *When creating and managing brand awareness, it's all in line with who is our target audience/endorsers? Not everyone needs to be aware of our brands or be valued. Need to make sure that it's to the right audience

Like customers, brands can become valuable economic assets to the firm

- Influence revenues and costs - Effect behaviors of loyal customers - Associate with non customers and emplpoyees

How do you improve the capability?

- Maintain direct contact with customers: Sales staff, websites, be the customer (employees) - Keep an open mind: don't have a confirmation bias - Triangulate with multiple methods: Quantitative or qualitative methods - Experiment continuously: Field experiments, treatment vs control - Create a common picture for the customer: How can we integrate data to figure out what is our customer from different points of view. Cross-referencing, being able to integrate data from all products/services - Share customer insight and best practices: Important to make knowledge available to everyone in organization. Be able to understand how we can develop strategies based on information we already have

What are insight outcome metrics?

- Managers insight before and after insights

What are competitor brand roles?

- Market leading brands provide competitors with a benchmark against how we want our brands to compete Ex: Avis uses the slogan "We're #2. We try harder" Ex: Motor boat company "We're just as good as Sea Ray but less expensive" Sometimes we know we aren't the leader but can sometimes show benefits to customer

How do you recognize issues with market insight and the capabilities?

- Not a priority for the company: confident that they know their market well enough and no need to learn about the customers - Outsource market insight activities: push market insight to support function and fail to engage organization - Soil information internally: not connect the dots and lack a 360 degree view

What are some issues for the CMO role?

- Not perceived as having the credibility to move the organization forward - CEO may think that marketing isn't as important so important for CMO to see how the strategy role can be earned by helping organization understand the four imperatives on customer value - Can be very ambiguous, can define clearly what the marketing leadership should be for an organization

What are company brand roles?

- Offers legal protection of production through a trademark - Offers an effective and efficient methodology for categorizing products

How does IBM meet customers revolving needs?

- Organizes according to customer's needs such as energy efficiency or server consolidation, and coordinates its marketing efforts across products for a particular customer. - IBM's Insurance Process Acceleration Framework has specialists in insurance practice work with lead customers to build fast and flexible processes in areas like claims, new business processing, and underwriting. - Practices performance according to long term customer metrics

Building a strong brand: Maintaining brand relevance

- Premium value on new customers - Extend brand for existing customers Always want to see how our brand can be relevant to customers entering the market place Ex: Proctor and Gamble, appealing to individuals with babies and they give samples out to hospitals. Extend brand into different product categories for existing customers. Try to figure out how to gain and maintain customers

What are inside input metrics?

- Quantity and quality of customer and competitor reports available - Number of reports downloaded - Number of posts to share knowledge management repositories - Inquires from operating units to market competitive intelligence unites internal and external to firm

Rethinking Marketing Article

- Some companies are still managed as if they are in the 1960s, an era of mass markets, mass media, and impersonal transactions - Companies must shift their focus from driving transactions to maximizing customer lifetime value which means changing strategy and structure across the organization - A customer cultivating company is designed to serve customers and customer segments. Communication is individualized or tightly targeted at thinly sliced segments

Define what culture is, because the outside-in approach is very culturally driven from an organizational standpoint

- Sometimes culture change/shift with different organizations - Organizations with this outside in approach can be recognized for this cultural thinking

What are 5 effects that customers/employees can bring when we have a strong brand that can bring economic profits to a firm

- Strong brands can bring customer recognition/recall: brand knowledge - Strong brands can improve customer attitudinal loyalty - Strong brands can help with ongoing customer purchases - Endorsement behaviors, how strong brands can lead to good talent and help to retain those that want to work for an organization. Ex: Google gets really good employees with a lot of talent

Who should drive the four customer value imperatives in an organization?

- The entire C-suite - All the chief officers within the organization - Should all be committed to making sure organization is functioning in outisde-in

What are the four unique roles of the CMO in the marketing function? These roles depend on what the product is, what market we're in, culture, and the CEO

- Top Line Leader: Sharing all the activities, understand the customer facing activities, accountable for the brand strategy growth and positioning, and own customer value proposition and how the marketing activities have a return on investment - Market Advocate: Responsible for bringing long term market and brand building into the C suite. Lead teams that monitor the market, looking at different shifts/brand perception. Looking at marketing function and how they can coordinate and communicate - Service Resource: Not as influential as a CMO, this person may be considered a vice president. Manage the marketing professionals internally and externally. Hire out advertising and promotion firms to be able to handle marketing functions. Administrative role to support marketing function - Sales Support: Marketing in subordinate to sales, so all activities will fall under sales function and always a battle of getting the budget allocated to marketing activities that may be there to help to support that sales function. Have to sell it that we're that long term investment to build the brand through advertising. Help to increase short term earnings

What is the Real-Win-Worth-It screen?

- Used in early stages of innovation process to test viability of ideas for new products/services. - Useful in development process to confirm the value of the innovation project or to support it's termination

What are the Brand Asset Management Capabilities?

1. Building the brand: Maximize the impact of the value proposition, strengthen the brands reputation with investments 2. Protecting the brand: Anticipate and counter potential threats 3. Leveraging the brand: Capture new opportunities and realize the brand's full economic value

What is the concept of net promoter?

- Used to understand loyalty as well as satisfaction - Measures the willingness of customers to recommend a company's products or services to others and is used to gauge customer's overall satisfaction with the company's products and services and loyalty to the company's brand - Simple questions like "How likely is it that you would recommend the brand" Promoters give it a 9-10, Detractors give it a 6 or below, Passively satisfied are a 7 or 8 - Net promoter score is percentage of promoters-detractors. Can understand the positive relationship the firm has

How has Tesco improved customer retention?

- Uses data collecting loyalty card to track which stores customers visit, what they buy, and how they pay. - Helped Tesco tailor merchandise to local tastes and customized offerings at the individual level

What is the chief marketing officer? (CMO)

- Usually responsible for driving the four customer value imperatives - Title can vary by company - A C level corporate executive responsible for activities in an organization that have to do with creating, communicating and delivering offerings that have value for customers, clients or business partners.

What are questions to ask to gain competitor insight?

- WHO are the firms competitors? - WHAT are the competitor's value propositions? - HOW do competitors create and capture value? - WHY are competitors taking actions? - WHAT are the moves of our competitors? - HOW will competitors respond to our moves?

What are questions to ask to gain consumer insight?

- WHO may be a good customer? - WHAT customers think, feel, prefer and do? - WHERE and WHEN customers use products and services? - HOW customers engage in these internal activities or external actions - WHY customers have these needs?

Innovate with customer value proposition (Customer)

1. Challenge customer boundaries: What other needs of our current customers can we serve? 2. Meet needs of non-customers: What other customers could use our capabilities? 3. Evaluate past, present, and prospective customers in current markets 4. Penetrate new geographies

What does be a customer value leader mean? Example of how it is applied?

A company delivers superior value to a distinct segment of the market with a business model tightly fitted to it's purpose Ex: Companies that outperform their rivals by delivering superior value to a distinct segment of the market Best product, best price, best service

What are the four customer value imperatives?

1. Be a customer value leader 2. Innovate value for new customers 3. Capitalize on the customer as an asset 4. Capitalize on the brand as an asset

What are the two types of customer loyalty?

1. Behavioral loyalty: How frequent the customer purchases from the company and if they buy out of habit, family history, lack of convenient alternative, automatic ordering 2. Attitudinal loyalty: Deeper trust and commitment to the company and what it offers. Positive thoughts, feelings of affinity or attachment to the firm and/or it's specific products or services

What is brand knowledge?

A consumer's awareness and/or understanding of a brand and its attributes.

Innovate with customer value proposition (Offering)

1. Develop new core products for customers/to find new customers 2. Create bundled solutions and looking at how they can save customers time/money/risk 3. Redesign what is considered customer experience. How can we create meaning within customers lives? 4. Extend brand into new domains. How do we maintain that name and not lose sight when developing into different types of products?

What is small i innovation?

1. Exploitation of existing capabilities 2. Incremental 3. Continuous improvement, increase product/service effectiveness, quality or value 4. Low risk- small rewards

What is big i innovation?

1. Exploration of new market spaces 2. Discontinuous 3. Disruptive 4. "Blue ocean" uncontested open water 5. High risk- large rewards

What are the three types of market insight metrics?

1. Insight input metrics: Quantity/quality of customer, number of reports downloaded, how many ppl sharing information 2. Insight process measures: Look at sense of making and learning process, asking users to comment on quality or ideas that others have shared, rate the quantity/quality of the insight, make sure there's trust 3. Insight outcome metrics: Looking at insight, what did we know before as well as after. *We only know insight is good if we make a good strategic decision based on it. Understand how we can capture postmortems and evaluate it to improve on it

What are the three principles that support a customer asset?

1. Make a distinction between customer transactions and deep customer commitment and loyalty 2. Extract full life time value that loyal customers can offer the company 3. Develop and deploy a capability for capitalizing on the customer as an asset

What are the top 10 global brands?

1. Nestle 2. Coca Cola 3. Pepsico 4. Unilever 5. Kellogs 6. Danone 7. Mars 8. Associated British Foods 9. Mondelez 10. General Mills

Why do customer value innovators outperform the competition?

1. They provide market insight and foresights, see what issues they have with your product/service and figure out how to improve 2. More expansive approach to what innovation is 3. Provide a supportive environment that nurtures innovation

What is the importance of trust?

A belief in the reliability, truth, ability, or strength of someone or something 1. Performance value leaders: Belief company will improve it's technologies, science or designs. Loyal to new products or services from the company. People are loyal to apple because of how they evolve their products 2. Price value leaders: Promise of low prices. Ex: Walmart, save money live better. Known for every day low prices 3. Relational value leaders: Product, service, or solution will be customized to their needs. How they are able to understand our needs and are willing to customize and personalize to those needs

What are metrics?

A method of measuring something, or the results obtained from this.

What are incentives?

A payment or concession to stimulate greater output or investment.

What is brand equity?

A set of assets and liabilities linked to a brand, its name and symbol, that add to or subtract from the value provided by a product or service to a firm and/or that firm's customers Brands can develop equity amongst consumers as well as firms. All the assets that come together to symbolize what the brand is.

What is customer loyalty?

A situation where a customer develops a long standing preference toward a particular product or service

What does it mean to capitalize on the brand as an asset? Example of how it is applied?

A strong brand makes a credible promise to reliably deliver a meaningful benefit. Understand what a brand is and how we can find a value in it. Ex: Learn to associate a brand with a meaningful benefit. Can influence firm and revenue costs, effect behaviors of loyal customers, associate with non-customers and employees

What is Recognition?

Ability to identify brand as being familiar, which mobile phone brands on this list do you recognize? Want people to associate your brand with the product category

What is corporate brand?

All sub-brands use the same corporate brand name and only differentiate in their descriptions.

What is the value-creating system?

All the activities that the firm links together to create and deliver customer value, including basic inputs to create products/services through the channels to sell, service, and distribute the offering

Chapters 5 and 6

Be a customer value innovator

Chapters 3 and 4

Be a customer value leader

Chapters 9 and 10

Capitalize on the brand as an asset

Chapter 7 and 8

Capitalize on the customer as an asset

What is taking action?

Change in thinking

What is hybrid brand?

Combination of corporate brand and house of brand approaches.

What does it mean to innovate value for new customers? Example of how it is applied?

Companies that drive growth by innovating new value for customers and attracting new ones

What is house of brand?

Consist of various brand names with each sub-brand operating independently and obtain separate market share and profits.

Explain the loyalty funnel

Customers journey with a company that can potentially drive sales, more loyalty and stronger brand awareness. Steps consumers go through when they make a purchase. Want to move the customer through the tunnel in order to establish deep commitment 1. Satisfy the customer with an offering: "second moment of truth" Hope that when they make that purchase, tried it, or used it, that it didn't fail in some way. How are they going to be satisfied with our offering? 2. Connect product/service performance to deeper customer outcomes: find source of differentiation from competition. How can we highlight that we're the market leader? 3. Give the company credit: consumer attribute the outcome to the offering. Whatever the outcome was when they used the product/service, you want the consumer to tell others about it and say that it was because of that product/that service. Ex: Special K, if you lose weight with special K, they want you to attribute special K with your weight loss. 4. Remember the need and the offering: keep company fresh and relevant with advertising or sales. Ex: Jet's Pizza, always know when you don't purchase Jets pizza in a while because you get a coupon in the mail. Has customers on radar of purchasing behavior. 5. Build habit: loyalty programs, high-volume purchases. Ex: Airlines and hotels do that and Starbucks 6. Deepen commitment: transparent and frequent open communications. In a long run, be more profitable from that customer. To maintain, be transparent or open with communications

How do you leverage brands in global markets?

Dominance of global brands 3 brand strategies for global marketers - Global brand strategy: Same brand and target with same marketing strategy - Local brand strategy: New brand, new target, and different marketing - Hybrid brand strategy: Balanced approach and consider new marketing and culture, tailor brands for those markets

What is lifetime value of prospective customer?

Expected value per prospect of any acquisition effort

What does it mean to capitalize on the customer as an asset? Example of how it is applied?

Turn customer value into valuable customers. Customers produce profits by purchasing new products, responding faster to company marketing activities, investing in the relationship and promoting the company by word-of-mouth

What is endorsement?

Giving one's approval or support to a brand.

What is the value capturing system?

How a business creates profit from it's transactions

What is the inside-out approach?

Instead of seeking new sources of value for current or new customers or compelling growth opportunities, the managers ask 1. How can we exploit our current brands, reduce costs, gain more share and improve productivity? These questions can disconnect the firm from customer changes and emerging competitive threats

What is a trademark?

Intellectual property to protect brands.

What is a patent?

Intellectual property to protect functional or ornamental features.

What is copyright?

Intellectual property to protect works of authorship.

What is service mark?

Intellectual property to the service of a brand.

How do you establish a brand online?

Internet has made the world smaller, allows us how we can connect individuals with our brands around the world. Providing and increasing connectivity with customers and empowering them to share info about our brand, getting them to help us share insight with other customers - Listen and learn - Establish a community - Don't sweat negative opinions, if product is good - Take unified and swift action to negative evidence - Monitor - Truth and transparency - Identify connectors in market - Engagement

Chapter 13

Leadership

What is a market insight capability?

Learning process to build new layers of insight Key steps in the Capability - Market sensing: Process of gathering information is triggered by looking at what strategy is, if there is a problem, or if there is innovation that needs to occur. Gather information to see what steps to take and "Skate where the puck is going" - Sense making and sharing: Find patterns, convert data collected to usable insights. Can help us better understand and make decisions that we can share within management system. How can we understand the information we found and share it - Taking action: Change in thinking, be more active based on the second step. Take insight and find a new opportunity. Want to make sure that info turnover is in a timely fashion bc competition may be applying insights similar. - Feedback and learning: Postmortem of strategic action and market insight. Occurs after we have had change in strategy/form of improvement. Did the market respond as we want and why/why not

Chapter 11

Market Insight

What is confirmation bias?

Reinterpret results or dismiss results that do not meet expectations.

What company innovated new value for customers?

Netflix because they transformed the movie rental market with an online, rent by mail service for DVDs. They on-upped block buster.

Chapter 12

Organization

What is feedback and learning?

Postmortem of strategic action and market insight.

What is quantitative?

Research methods emphasize objective measurements and the statistical, mathematical, or numerical analysis of data collected through polls, questionnaires, and surveys, or by manipulating pre-existing statistical data using computational

What is qualitative?

Scientific method of observation to gather non-numerical data.

Innovate with customer value proposition (Competitive profile)

Sometimes you have to innovate on what the competition is doing/not doing Eliminate, reduce, increase, add

What does alignment with the market invovle?

Structure, metrics, and incentives

What are value positions?

The company's ability to help it's customers solve a problem that they cannot ignore, better than any other option available

What is the brand fit?

The congruency in image, benefits, and customer type associated with original brand

What is dilution?

The devalue of a brand in the mind of the customer

What is the outside-in approach? Why is it important to understand?

The managing team steps outside the company and looks first at the market 1. Why are customers changing? 2. What new need do they have? 3. How can we solve their problems? 4. What new competitors are lurking?

An outside in strategy remains focused on...

The purpose of a business: To create and keep customers Resist temptation to focus only on shareholders and playing games that don't improve the value proposition for customers

What is Recall?

The retrieval of brand from memory without a cue or saying that we're part of a specific brand category, which brands of mobile phones can you name? This is more telling bc you hope you're brand is strong enough that they will be able to state it with that product or service category.

What is a customer asset?

The sum of the discounted long-term profits associated with the customers purchases and referrals

Define customer lifetime value (don't have to know how to calculate it)

The total worth to a business of a customer over the whole period of their relationship. Coca Cola tries to market kids at a young age so they can have potential value over a lifetime. - Acquisition costs never exceed lifetime value of customer. - Spend more to acquire and retain customers with a higher lifetime value - Increasing retention of customers is more valuable than increasing margins. Not having to spend acquisition costs again - Have to invest time and energy and money in customers in order to seek them and increase that lifetime value with them.

What is customer value?

Trade off between the benefit that customers perceive they are receiving from a product/service and the perceived cost of obtaining these benefits