Customer Mix: Strategic Marketing & Communication

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The New Marketing Mix: From Products to Customer Relationships

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Customer Mix: Strategic Marketing & Communication

  1. 1. The New Marketing Mix: From Products to Customer Relationships Carlos F. Camargo
  2. 2. Every Organization Faces Transition Where We Are Transition Where We Need To Be
  3. 3. Much of the Problem Is Where We’ve Been
  4. 4. 1940 1930 1920 1950 1960 Marketplace Transitions Product Development Nationalization Distribution Depression War Years Re-Construction Baby-Boom Development of Marketing
  5. 5. 1980 1970 1960 1990 2000 Marketplace Transitions Re-emergence of competition Globalization Rise of Quality Price Competition Cost-Cutting Re-engineering Logistics/ Digitalization Transition of Information Technology 21st Century Marketplace
  6. 6. Three Types of Organizations Evolved Customer Historical Current 21st Century Product Distribution
  7. 7. Because of Where We’ve Been, Marketing and Communications Are Unnatural Acts for Many Organizations!
  8. 8. Most Product-Focused Firms Are Managed with the 4Ps <ul><li>Product - “best in class” </li></ul><ul><li>Price - constant adjustments </li></ul><ul><li>Place (Distribution) - field sales/channels </li></ul><ul><li>Promotion - deals, discounts and Super Bowls </li></ul>
  9. 9. In a 4Ps-Managed Firm, You Don’t Need Brands or Marketing or Communications
  10. 10. All You Need Is a Superior Product, Lowest Price, Best Distribution, Most Exciting Promotion, Or, Some Combination of Those Elements!
  11. 11. Product Driven Raw Materials Technology Facilities Money Distribution Location Distribution Aggregation Needs/ Wants Purchasing Power Consumer Media Channel Marketer Information
  12. 12. Or, If You’re a Distribution-Driven Firm, All You Need Is Location, Location, Location And, Channels, Channels, Channels!
  13. 13. Distribution-Driven Distribution Concentration Locations Technology Consumer Media Mktr. Mktr. Mktr. Channel (Logistics) Information
  14. 14. Those Were Before the Transition of Information Technology
  15. 15. That Created a Totally New, Interactive Marketplace
  16. 16. 1980 1970 1960 1990 2000 Marketplace In Transition Re-emergence of competition Globalization Rise of Quality Price Competition Cost-Cutting Re-engineering Logistics/ Digitalization Transition of Information Technology 21st Century Marketplace
  17. 17. Customer-Driven Needs/Wants Choice Purchasing Power Technology Customer Channel Mktr. Mktr. Mktr. Channel Information Media Media Media
  18. 18. Customer Media Channel Marketer Information Product Marketers Customer Information Channel Mktr. Mktr. Mktr. Distribution Marketers Media Customer Channel Mktr. Information Mktr. Mktr. Channel Media Media Customer Marketers Media
  19. 19. Customer Media Channel Marketer Information Product Marketers Customer Information Channel Mktr. Mktr. Mktr. Distribution Marketers Media Customer Channel Mktr. Information Mktr. Mktr. Channel Media Media Customer Marketers Media
  20. 20. Information Technology Transition Shifts Marketplace Power
  21. 21. Customer Media Channel Marketer Information Product Marketers Customer Information Channel Mktr. Mktr. Mktr. Distribution Marketers Media Customer Channel Mktr. Information Mktr. Mktr. Channel Media Media Customer Marketers Media
  22. 22. The New Marketplace <ul><li>Customer knowledge and choice </li></ul><ul><li>Time and distance no longer relevant </li></ul><ul><li>Perfect global information on prices and alternatives </li></ul><ul><li>Speed of response demanded </li></ul>
  23. 23. Customer-Driven Needs/Wants Choice Purchasing Power Technology Customer Channel Mktr. Mktr. Mktr. Channel Information Media Media Media
  24. 24. A New Role for Marketing and Communication and Brands
  25. 25. Basis: <ul><li>Best Practices in IMC - 1997 </li></ul><ul><li>Brand Communication ROI - 1997 </li></ul><ul><li>Best Practices in Branding - 1998 </li></ul><ul><li>Holistic Use of Data - 2000 </li></ul>
  26. 26. Best Practices in IMC <ul><li>Major Finding - Four stages </li></ul>
  27. 27. The 4 Levels of Integrated Marketing Communications Tactical Coordination Level 1: Level 2: Redefining Scope of Marketing Communication Level 3: Application of Information Technology Level 4: Financial and Strategic Integration
  28. 28. Key IMC Findings: <ul><li>Communication as core competency </li></ul><ul><li>Gathering and sharing data </li></ul><ul><li>Resource allocation based on customer value </li></ul><ul><li>Marcom at higher level - credibility </li></ul>
  29. 29. Brand Communication ROI <ul><li>Managing customer and prospect income flows </li></ul><ul><li>Closed-loop systems </li></ul><ul><li>Incremental returns </li></ul><ul><li>Marginal cost and revenue </li></ul>
  30. 30. Closed Loop Systems Measurable Customer Behavior Present Customer Database Measurable, Marketer-Controlled Brand Activities Effects Measures Uncontrollable Brand Marketing From Environment Base Measure $ Income Flows
  31. 31. Basic R-O-C-I Process
  32. 32. Brands and Branding <ul><li>Management leadership </li></ul><ul><li>Clearly defined brand structures </li></ul><ul><li>Clearly articulated brand promise/value proposition </li></ul><ul><li>Holistic communication - 360 degree view </li></ul>
  33. 33. 5 Key Success Factors in Branding <ul><li>Self knowledge and absolute clarity on what the brand is, what it stands for, and what it represents …. </li></ul><ul><li>Based on information gathered from all parties: customers, management, employees, and other relevant stakeholders … </li></ul>
  34. 34. 5 Key Success Factors (cont.) <ul><li>Communicated clearly and consistently to diverse audiences ... </li></ul><ul><li>Supported by products/services, business systems and policies that enable consistent delivery on the core promise ... </li></ul><ul><li>Instilled at all levels of the organization. </li></ul>
  35. 35. How Can We Relate These Best Practices to the Challenges We all Face in Getting Noticed and Promoting Loyalty
  36. 36. A New View: What Can Brands, Marketing And Communication Do to Build Your Business?
  37. 37. Radical Ideas: <ul><li>Marketing from a cost to a profit center </li></ul><ul><li>Focusing on outcomes, not outputs </li></ul><ul><li>Managing income flows, not marketing programs </li></ul>
  38. 38. Four Goals of Businesses <ul><li>Increase cash flows </li></ul><ul><li>Accelerate cash flows </li></ul><ul><li>Stabilize cash flows </li></ul><ul><li>Build brand equity or shareholder value </li></ul>
  39. 39. You Can Do That With: <ul><li>Productivity </li></ul><ul><li>Quality </li></ul><ul><li>Processes </li></ul><ul><li>New products </li></ul><ul><li>Brands, marketing and communication </li></ul>
  40. 40. My Argument: <ul><li>Marketing and customer focus </li></ul><ul><li>Integration and holistic views </li></ul><ul><li>Brands and branding </li></ul><ul><li>Dialogs and communication </li></ul><ul><li>On-going relationships </li></ul>
  41. 41. In Short, Use Marketing, Brands and Communication as Value Drivers and Value Builders
  42. 42. Companies With Strong Brand Relationships <ul><li>Get higher “share of wallet” - (increased revenues) </li></ul><ul><li>Get a price premium - (increased revenues) </li></ul><ul><li>Achieve faster acceptance of new offerings, I.e. “time to market” and “time to money” </li></ul><ul><li>Have less cash flow volatility, less risk - (steady cash flow) </li></ul><ul><li>Keep their market share with less resources allocated to marketing and communication - (decreased costs) </li></ul>Source: Storbacka, CRM
  43. 43. Brands, Marketing and Communication Must Contribute to Business Goals Must Provide Returns, Not Just Expenses
  44. 44. Only Customers Can Increase, Accelerate, Stabilize Cash Flows or Build Market Value
  45. 45. Marketers Should Manage for The Best Customer Mix, Not The Best Product Mix
  46. 46. To Turn Marketing, Brands And Communication Into Value Drivers, We’ll Need: <ul><li>Processes, not functions </li></ul><ul><li>Strategies, not more tactics </li></ul><ul><li>Integrated planning approaches </li></ul><ul><li>Financial measurement systems </li></ul>
  47. 47. External/Internal Alignment Prod- uction Sales Mar- keting External Suppliers Internal Oper- ations External Activities Customers Integrating the System, Not the Pieces and Parts
  48. 48. The 5-Step Integrated Brand Communication Process 1. Customer Identification from Behavioral Database 2. Valuation of Customers/ Prospects 3. Creating and Delivering Brand Communication 4. Estimating Return-on-Customer- Investment 5. Budgeting, Allocation & Evaluation IBC
  49. 49. Every Organization Faces Transition Where We Are Transition Where We Need To Be
  50. 50. Customer Media Channel Marketer Information Product Marketers Customer Information Channel Mktr. Mktr. Mktr. Distribution Marketers Media Customer Channel Mktr. Information Mktr. Mktr. Channel Media Media Customer Marketers Media
  51. 51. The Challenge: <ul><li>Become customer-focused </li></ul><ul><li>Market through brands and relationships </li></ul><ul><li>Turn communication into a value-driver </li></ul><ul><li>Measure financial returns </li></ul>
  52. 52. That’s the Challenge of the 21st Century Marketplace
  53. 53. Thank You for Your Time, Your Attention and Hopefully, Your Interest
  54. 54. Carlos’ email Address <ul><li>[email_address] </li></ul>

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