Fluent Essays

·  Read Chapters Five and Seven in the textbook. ·  Respond to this assignment with a single-spaced, typed document. Most well-thought out responses require at least one full page. Module 3 Assignment:   Select a B-2-B firm such as FedEx, Apple, IBM, Boeing, GE, or Caterpillar and assess its business model. Develop a list of particular skills, resources, and strategies that are especially important to the selected firm’s strategic position. Give particular attention to those skills, resources, or characteristics that competitors would have the most difficulty in matching. Then comment on how smart, connected products/services might be particularly useful for providing value for customers and differentiating the chosen company from its competitors. 0 Chapter 7 Managing Products for Business Markets © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 12e How to build a strong business-to-business brand The way in which sustainability strategies are transforming the competitive landscape The strategic importance of providing competitively superior value to customers Chapter Outline 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. The various type of industrial product lines and the strategic choices that smart, connected products present A strategic approach for managing products across the stages of the technology adoption life cycle Chapter Outline (continued) 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Established through brand, products, and services Brand is one of the firm’s most valuable intangible assets Branding has emerged as a priority to marketing executives, CEOs, and the financial community Marketplace Identity 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Brand Name, sign, symbol, or logo that identifies and differentiates the product from competitors Brand equity Set of brand assets and liabilities linked to a brand, its name, and symbol Brand and Brand Equity 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Differential effect that customer’s brand knowledge has on their response to market activities and programs for the brand Brand power relies on what customers have learned, felt, seen, and heard about the brand over time Customer-Based Brand Equity (CBBE) 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Brand-Building Steps 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Develop deep brand identity Establish unique brand identity by highlighting differences Employ marketing programs to elicit positive brand responses Build brand relationships with loyal customers Figure 7.1 - CBBE Model © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. To achieve brand identity, marketers must create brand salience Brand salience: Tied directly to brand awareness Brand awareness: Customer’s ability to recall or recognize the brand under different conditions Marketers need to create a clear connection between the product and the brand name in markets where the product competes Brand Identity 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Establishes unique association in the customer’s mind that differentiates the brand and creates competitive superiority Types of brand associations Brand performance: Way in which the product/service meets customers’ functional needs Brand imagery: Ways in which the brand meets customers’ psychological or social needs Should incorporate points of parity and differences Brand Positioning 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Brand Response: Consumer Judgments 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Quality Customer’s attitude towards brand’s perceived quality and their perceptions of value and satisfaction Credibility Extent to which customer perceives brand to be credible with respect to expertise, trustworthiness, and likeability Consideration set Degree to which customer finds brand a viable option and worth consideration Superiority Extent to which customer believes that brand offers advantages over competitive brands Brand resonance Strength of the psychological bond that a customer has with a brand Degree to which this connection translates into loyalty, attachment, and active engagement with the brand Forging Brand Relationships 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Percentage of organizational buyers who have a positive image of a company minus those with a negative opinion Component and indicator of brand equity Building brand attitude for high-technology firms increases the firm’s value Firms that have developed strong brands create value for their shareholders by yielding greater returns 13 Brand Attitude © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 13 Many international companies insist that suppliers meet quality standards set out by the Geneva-based International Standards Organization (ISO) ISO-9000 standards Certification requires a supplier to thoroughly document its quality-assurance program Has become a seal of approval to compete for business overseas and in the United States Affects the entire supply chain Product Quality © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Stage one - Centers on conformance to standards or success in meeting specifications Stage two - Emphasizes that quality is more than a technical specialty Stage three - Examines a firm’s quality performance relative to that of competitors Analyses customer perceptions of the value of competing products Stages of Quality Movement © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Emerging mega-trend that forces companies to change the way they think about products, processes, and business models Involves the integration of economic, environmental, and societal considerations into business decision making Integral part of value creation Sustainability © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Distinct segments Cautious adopters - View sustainability as a vehicle for cost cutting, resource efficiency, and risk management Embracers - Recognize that sustainability strategies provide a means for gaining competitive advantage Through innovation, process improvements, brand building, and access to new markets Sustainability (continued) © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Figure 7.2 - Sustainability © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Figure 7.3 - Benefits and Sacrifices © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Core - Requirements a product must possess for a relationship to exist Add-ons - Attributes that create differentiation and provides more value than competition Forms of Customer Benefits 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Involves the set of all decisions concerning the products and services that the company offers Business marketing firms attempt to satisfy customer needs and build a sustainable competitive advantage by capitalizing on core competencies Product Policy 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Proprietary or catalog products : Offered only in certain configurations and produced in anticipation of orders Custom-built products: Offered as a set of basic units, with numerous accessories and options Custom-designed products: Created to meet the needs of one or a small group of customers Industrial services: Buyer is purchasing a company’s capability in an area rather than an actual product Types of Product Lines Defined © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Fundamental to a sound product policy decision Attention must be given to the alternative ways to satisfy customer needs Product strategists can be in touch with the market by including products and technology that compete for the same end-user needs Defining the Product Market 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Dimensions of a Market Definition © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Customer function Benefits that are provided to satisfy the needs of organizational buyers Technological function Alternative ways in which a particular function can be performed Customer segment Customer groups have distinct needs that must be served Value-added system Competitors serving the market can operate along a sequence of stages Planning for today Requires clear, precise definition of the business Focuses on shaping up the business to meet the needs of today’s customers with excellence Planning for Today and Tomorrow Planning for tomorrow Centers on how the business should be redefined for the future Entails reshaping the business to compete more effectively in the future © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Nonconsumers - May lack the specialized skills, training, or resources to purchase the product or service Undershot customers - For whom existing products are not good enough Overshot customers - For whom existing products provide more performance than they can use Important Customer Groups © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Require companies to build technology stack that includes: Operating system embedded in the product and hardware Software applications and network communications to provide connectivity Product cloud that provides a platform for developing software applications Smart, Connected Products © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Identify features that will deliver real value to target customers relative to their cost Tailor for target segments the company elects to serve Develop and incorporate those capabilities and features that reinforce its competitive positioning Choosing Product Capabilities and Features to Offer © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Response time - Feature that demands a fast response, requires that the software be incorporated directly in the physical product Automation - Fully-automated products require functionality that is embedded into the device Factors in Deciding the Enabling Technology © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Network availability, reliability, and security Embedding software in the product lowers the risk that confidential data will be compromised during transmission Frequency of service or product upgrades Companies can make product changes and upgrades easily and automatically by hosting functionality in the product cloud Factors in Deciding the Enabling Technology (continued) © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Product data is vital to competitive advantage for smart, connected products Costs and complexities are related to securing the rights to the data and in transmitting, storing, and analyzing it Firms must determine how each type of data creates tangible value for functionality Types of data that a firm decides to collect and analyze depends on its core strategy Capturing Data © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Risks Involved in Choosing Smart, Connected Products © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Adding product features that customers do not need or value Underestimating security and privacy risks Failing to anticipate or recognize new competitive threats Moving slowly and allowing competitors to gain a foothold Overestimating internal skills and capabilities Represents the place that a product occupies in a particular market Found by measuring buyers’ perceptions and preferences in relation to competitors Product Positioning 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Figure 7.4 - Positioning Process © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Discontinuous innovations New products or services that require the end-user and the marketplace to change their past behavior, with the promise of gaining equally dramatic new benefits Common in computer-electronics industry Technology Adoption Life Cycle © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Types of Customers in Technology Adoption Life Cycle Customer Profile Technology enthusiasts (innovators) Interested in exploring the latest innovation, these consumers possess significant influence over how products are perceived by others in the organization but lack control over resource commitments Visionaries (early adopters) Desiring to exploit the innovation for a competitive advantage, these consumers are the true revolutionaries in business and government who have access to organizational resources but frequently demand special modifications to the product that are difficult for the innovator to provide © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Types of Customers in Technology Adoption Life Cycle (continued) Customer Profile Pragmatists (early majority) Making the bulk of technology purchases in organizations, these individuals believe in technology evolution, not revolution, and seek products from a market leader with a proven track record of providing useful productivity improvements Conservatives (late majority) Pessimistic about their ability to derive any value from technology investments, these individuals represent a sizable group of customers who are price sensitive and reluctantly purchase high-tech products to avoid being left behind Skeptics (laggards) Rather than potential customers, these individuals are ever-present critics of the hype surrounding high-technology products © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Bowling alley - Push from hitting one segment successfully carries over into surrounding segments Product gains acceptance from mainstream market segments but is yet to be adopted widely Tornado - Technical or infrastructure buyers in organizations who focus on the vast number of new customers entering the market at the same time Strategies for the Technology Adoption Life Cycle © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Main street Represents a period of aftermarket development Focuses on developing niche-specific extensions to the basic platform for existing customers Aims to develop value-based strategies targeted to particular end-user segments Strategies for the Technology Adoption Life Cycle (continued) © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 0 Chapter 5 Business Marketing Planning: Strategic Perspectives © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 12e Marketing’s strategic role in corporate strategy development The multifunctional nature of business marketing decision making The components of a business model that can be converted into superior positions of advantage in the business market Chapter Outline 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. The way in which a new class of smart, connected products is transforming competition A valuable framework for detailing the processes and systems that drive strategy success Chapter Outline (continued) 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Market-driven organizations: Center on customers Take an outside-in view of strategy Demonstrate an ability to sense market trends ahead of their competitors Marketing’s Strategic Role 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Hierarchy of Strategies 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Corporate strategy Business-level strategy Functional strategy Defines the businesses in which a company competes, in a manner that uses resources to convert distinctive competence into competitive advantage Role of marketing Assessing market attractiveness and the competitive effectiveness of the firm Promoting a customer orientation to the various constituencies in management decision making Formulating the firm’s overall value proposition and articulating it to the market Corporate Strategy © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Centers on how a firm competes in a given industry and positions itself against its competitors Competition is between individual business units Strategic business unit (SBU): Single business or collection of businesses that has: A distinct mission A responsible manager Its own competitors and that is relatively independent of other business units Business-Level Strategy 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Centers on how resources allocated to the various functional areas can be used most efficiently and effectively to support the business-level strategy Focus of marketing strategy is to allocate and coordinate marketing resources and activities to achieve the firm’s objective within a specific product market Functional Strategy 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Interplay between the three levels of strategic formulation: Cuts across functional areas Involves issues related to long term objectives Involves allocating resources across SBUs and/or product markets Include decisions about the direction of corporate strategy, application of technology, and choice of alliance partners Strategic Formulation and the Hierarchy of Strategies 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Figure 5.1 - Strategic Decision Processes © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Different meanings assigned to a proposed strategy are motivated by deeper differences in organizational subcultures Subcultures exist when one subunit shares different values, beliefs, and goals than another subunit, resulting in different thought-worlds Functional managers are likely to resist strategic changes that threaten their field Conflicts in Strategy Formulation Process © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Collective decisions emerge from negotiation and compromise among partisan participants Choices must be negotiated with each interest group attempting to achieve its own ends Results of collective decisions tend to develop incrementally and depend on the partisan values and influence of the various interest groups Negotiated Outcomes © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Marketing managers should: Be sensitive to the likely response it may arouse in other interest groups Develop and use a communication network that includes organizational members who have a major stake in the decision Be able to use the personal networks to understand the interests of other stakeholders, communicate their own interests clearly and sensitively 13 Implications for Marketing Managers 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Successful marketing managers know how to integrate functional areas Understand the capabilities of manufacturing, R&D, and customer service Capitalize on the strengths in developing marketing strategies Facilitate strategies that are responsive to customer needs Assume a central role in strategy implementation Functional Integrated Planning 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Approach that can classify decision-making roles and highlight the multifunctional nature of business marketing decision making Responsible (R) - Manager takes initiative, analyzes situation, develops alternatives, consults with others, makes initial recommendation Approve (A) - Manager accepts or rejects decisions Consult (C) - Manager offers input Responsibility Charting 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Implement (M) - Manager is accountable for implementing decision Inform (I) - Manager is informed of the decision Responsibility Charting (continued) 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Constitutes members of the organization involved in the business marketing decision-making process Representatives may assume more than one role Roles evolve during the marketing strategy development process Composition is not strictly prescribed by the organization chart Needs of a particular strategy situation influence the composition of the strategy center Marketing Strategy Center 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Minimizing interdepartmental conflict is a challenge for marketer Individual strategy center participants are motivated by personal and organizational goals Organizational objectives may be different for different functional areas Managing conflict, promoting cooperation, developing and coordinating strategy is a fundamental responsibility for marketing managers Managing Strategic Interdependencies 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Figure 5.2 - Components of a Business Model 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Elements of Customer Interface 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Fulfillment and support Channels a firm uses to reach and support customers Information and insight Knowledge captured from customers and the degree to which this information is used Relationship dynamics Nature of the interaction between the firm and its customers Pricing structure Pricing choices offered by a business concept Determines how the firm chooses to compete Elements Business mission: Describes overall strategic objective, sets course direction, and defines performance criteria to measure progress Product/market scope: Defines where the firm competes Basis for differentiation: Captures the essence of how firm competes differently than its rivals do Core Strategy 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Business is differentiated when its value-adding activities are perceived as superior and profitable Value-added features need to motivate customers to pay a higher premium than the cost of superior performance Differentiation of Products and Services 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Core competencies Set of skills, systems, and technologies that create uniquely high value for customers Strategic assets Tangible requirements for advantage that enable a firm to exercise its capabilities Core processes Methodologies and routines that companies use Strategic Resources 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 23 Complements and enriches the firm’s research base Includes: Suppliers Strategic alliance partners Coalitions Value Network 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Figure 5.3 - Strategic Positioning 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Cloud computing: Scalable and elastic IT-related capabilities are provided as a service to external customers using Internet technologies Internet of Things (IoT): Connects devices such as everyday consumer objects and industrial equipment onto the network Big Data: Massive amounts of data collected over time that are difficult to analyze and process using common database management tools Smart, Connected Products © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Big Data Analytics: Process of examining large data sets containing a variety of data types To uncover hidden patterns, unknown correlations, market trends, customer preferences, and other useful information Smart, Connected Products (continued) © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Continuous monitoring of a product’s condition, operation, usage, and external environment through sensors and external data sources Control through remote commands or algorithms that are incorporated into the device or reside in the product cloud Application of algorithms and analytics to product usage data to enhance product performance Capabilities of Smart, Connected Products © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Preventative maintenance when failure is imminent and completes repairs remotely Smart, connected products: Operate autonomously Self-diagnose their own service needs Adapt to users’ preferences Self-coordinate with other products and systems Capabilities of Smart, Connected Products (continued) © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Marketing strategists can secure new insights into how products create value for customers by gathering and analyzing product usage data By capitalizing on the rich data flows from customers, managers can: Create product and service bundles that provide greater value to each segment Price the bundles to capture a greater share of that value Effect of Smart, Connected Products on Marketing Strategies © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Product usage and performance data offer improvements in predictive maintenance and service productivity Product data can signal existing and future problems and enable firms to make timely equipment repairs Effect of Smart, Connected Products on Marketing Strategies (continued) © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Figure 5.4 - The Management System 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Comprehensive system for converting a company’s vision and strategy into a tightly connected set of performance measures Combines financial measures of past performance with measures of the drivers of performance Balanced Scorecard 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Figure 5.5 - Balanced Scorecard © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Market share Represents the proportion of business in a given market (in terms of number of customers, dollars spent, or unit volume sold) that a business unit sells. Customer acquisition Tracks, in absolute or relative terms, the rate at which a business unit attracts or wins new customers or business. Customer retention Tracks, in absolute or relative terms, the rate at which a business unit retains customers. Customer satisfaction Matches the satisfaction level of customers on specific performance criteria such as quality, service, or on-time delivery reliability. Customer profitability Assesses the net profit of a customer, or segment, after deducting the unique expenses required to support that customer or segment. 35 Customer Perspective: Core Measures 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Aligning Internal Business Processes to the Customer Strategy Customer Strategy The Focus of Internal Business Processes Operations Management Customer Relationship Management Innovation Management Low-total-cost strategy Highly efficient operating processes efficient, timely distribution Ease of access for customers; superb post-sales service Seek process innovations gain scale economies Product leadership strategy Flexible manufacturing processes rapid introduction of new products Capture customer ideas for new offering educate customers about complex new product/services Disciplined, high-performance product development first-to-market © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Aligning Internal Business Processes to the Customer Strategy (continued) Customer Strategy The Focus of Internal Business Processes Operations Management Customer Relationship Management Innovation Management Complete customer solutions strategy Deliver broad product/ service line create network of suppliers for extended product/ service capabilities Create customized solutions for customers build strong customer relationships develop customer knowledge Identify new opportunities to serve customers anticipate future customer needs Lock-in strategies Provide capacity for proprietary product/service reliable access and ease of use Create awareness influence switching costs of existing and potential customers Develop and enhance proprietary product increase breadth/applications of standard © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Tool for visualizing a firm’s strategy as a chain of cause-and-effect relationships among strategic objectives Enables an organization to describe and illustrate its objectives, initiatives, and targets Strategy Map © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Figure 5.6 - Strategy Map © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.