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2) How can we define relevant market space?
3) What are the potential opportunities emerging
from the market space?
4) What business capabilities and infrastructure
required?
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SPACE
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OPPORTUNITIES
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COMPETENCY
Market
Offerings
COGNITIVE
SPACE
CUSTOMER
VALUE
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SPACE
BUSINESS
DOMAIN
Business
Architecture
BUSINESS
PARTNERS
CRM ERP
RESOURCE
SPACE
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Marketing
Activities
Operational
System
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Market
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Number of
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Y O G U R T S M A R K E T
Time
93. “This time like all times is a good
one, if we but know what to do with
it.”
Ralph Waldo Emerson THANK YOU!
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Editor's Notes
Welcome.
I appreciate being invited to speak in India. I spent 9 months in India many years ago and have made several re-visits since then. This is not to lay claim that I am an expert. Nobody is an expert on India.
On past visits, I described India as a caged tiger. Today the cage door is open and you are coming out.
In an article by Jeffrey Sachs entitled “Welcome to the Asian Century,” he estimates that by 2050 China and India will each overtake the U.S economy in size. China’s GNP has grown about 10% a year since the 1970s and India’s about 6% while U.S. economic growth as run around 3.5%. Both countries are relatively well managed politically and economically and are attracting foreign investment and developing high tech capabilities.
In fact, we are seeing the rise of an integrated Asian economy linking Southeast Asia and southern Asia and Northeastern Asia.
This news is both good and bad for the U.S. The concept that the U.S. is the world’s sole superpower and manager—the new Rome--will have to be abandoned.
The good news is that world prices will be held down. We will also see more scientific and technological advances coming from Asia. Already many of the best scientists and engineers in the U.S. are from India.
I am going to describe what India needs to know to grow and prosper.
Drucker, Yogi Berra, A Chinese Proverb, William Davidow, David Packard
Wal-Mart Strategy
Objective: Win by owning lowest price end of the market.
Strategy: Find ways to lower all important costs of doing business.
Tactics:
Build the stores at the lowest cost by causing landowners and towns to compete by giveaways
Maintain the lowest inventories by developing a real time information system to order only for restocking
Pay low wages by offering other benefits to attract workers and keep out unions
Carry fewer brands and extract best deals from these brands based on volume; after a brand depends on us, press them for reduced prices.
Don’t spend money in expensive advertising
Southwest Airlines
Objective: Win by charging the lowest prices in order to attract not only passengers of other airlines but also car drivers
Strategy: Bring down all critical costs
Tactics:
Develop short-distance routes connecting high traffic inter-cities
Use only one airplane type to simplify training and inventory
Don’t serve food and therefore reduce cabin crew size
Don’t use travel agents; sell tickets directly
Don’t offer to transfer luggage
Don’t offer higher classes of service
Southwest Airlines - Activity System (Porter)
Ikea
Objective: Win by offering good quality furniture at the lowest price
Strategy 1: Reduce all the important costs of doing business
Tactics:
Reduce shipping costs by developing knock-down furniture
Get customers to locate and load their own purchases
Get customers to carry home their purchases
Don’t advertise
Strategy 2: Make the store an attractive destination
Tactics:
Add a good value restaurant
Add a day-care center
Strategy 3: Create a membership program
Tactics:
Send regular catalogs to members
Set up discounts below normal price for members
Nike
Objective: Win by creating the largest volume and deepest profit margin
Strategy 1: Create the most exciting shoes
Tactics:
Hire famous name athletes and design shoes around them
Design and test shoes for highest performance
Strategy 2: Create exciting retailing
Tactics:
Niketown
Strategy 3: Produce shoes at lowest cost
Tactics:
Outsource production in the Far East
Harley-Davidson
Objective: Become a cult product
Strategy: Win by creating a community as well as a legendary product
Tactics:
Develop a membership program (HOGS) with many benefits
Sponsor many events for owners to congregate and travel together
Keep production volume low so that customers have to wait for the motorcycle
Enterprise Rent-a-Car
Objective: Grow volume by renting cars at the lowest cost
Strategy: Reduce the costs of running a car rental firm
Tactics:
Stay away from high rentals in airports
Open in low cost areas near automobile dealers and good traffic
Get close to car repair companies
In the mid-1990s, the RBC decided to restructure into a customer-centric enterprise. The Bank asked these questions:
How long would it take for the system to be operational?
How much will it cost?
How much will the incremental revenue be per year?
The bank invested and developed a centralized customer database that could project:
customer lifetime values
customer “growability” to offers
customer vulnerability in order to take preventive action.
Halifax: As tellers conduct customer transactions, their system suggests relevant products based on PA. Teller tells about offer and if customer accepts brochure, he/she is contacted later.
Consumer expectations are changing.
Consumers used to “lean back” – as passive recipients of one-way broadcast messages. Today, they “lean forward.”
Consumers want a conversation, to dialogue, to participate, to be more in control.
Consumers expect more personal attention – communication, products and services that are tailored to their wants and needs. Consumers will expect customization, so products and services reflect their unique wants and needs.
Marketing is being redefined. We’re going from one-dimensional, product-myopic marketing to three-dimensional marketing – that offers better solutions – product and/or service solutions – more delightful experiences – shopping, usage, total brand experiences…and the opportunity for on-going relationships – meaningful relationships between an individual and his or her brand.
Alan Lafley, CEO, P&G
Sponsorships. Companies have put their names on stadiums, whole teams and on individual athletes in gain attention.
Mentions on talk shows. David Letterman during his evening show sent a camera crew out to get Snickers candy bars and ended up talking about it on three subsequent occasions.
Product placement. James Bond in Die Another Day drove an Aston Martin, used a Sony cellphone, and prominently featured an Omega wristwatch.
Street-level promotion. Companies have hired actors and actresses to walk in busy areas and ask passerbyers to take a picture of them using their new camera phone.
Celebrity endorsements. Michael Jordan gave a boost to Nike shoes, McDonald’s, Hanes underwear, and Rayovac batteries.
Body advertising. College kids agreed to paste Dunkin’ Donuts logos on their foreheads during an NCAA basketball tournament.
Mobile billboards.