New Strategic Thinking in Marketing From the “new normal”, structural breaks, toxic effects and economic webs to choosing ...
<ul><li>Traits of the New Paradigm </li></ul>
New Paradigm in Management Appropriate consumption Jobs to fit people Autonomy encouraged, worker participation Cross fert...
PARADIGM SHIFTS <ul><li>Attention economy </li></ul><ul><li>Experience economy </li></ul><ul><li>Conversation economy </li...
<ul><li>We look for emotional connection and empowerment in all areas of life. </li></ul><ul><li>CONTRASTS CO-EXIST </li><...
<ul><li>GLOBALISATION / GLOCALISATION </li></ul><ul><li>ASIA AND NEW ECONOMICS </li></ul><ul><li>CONVENIENCE TECHNOLOGY </...
Convenience Technology <ul><li>Convenience technology provides today’s people with a tool that empower them and give them ...
Transparency <ul><li>Transparency implies openness, communication, and accountability.  Businesses and governments must ha...
<ul><li>Transparency </li></ul><ul><li>will continue its ascendancy to being the over-arching guiding principle for corpor...
Ageing Population <ul><li>The ticking retirement time bomb is a growing concern -  will it become an unsustainable burden ...
Interactive Platforms <ul><li>Exchange of ideas encouraging co-creation will set tomorrow’s agenda. </li></ul><ul><li>In t...
Navigating the new normal <ul><li>Are we experiencing a conventional economic cycle?  Or did the financial crisis of 2008 ...
The new normal <ul><li>The business landscape has changed fundamentally; tomorrow’s environment will be different, but no ...
The new normal <ul><li>For some organisations, near-term survival is the only agenda item.  Others are peering through the...
<ul><li>Five interconnected themes that highlight the opportunities and challenges faced by global economic integration: <...
<ul><li>Kim and Mauborgne’s (2005) blue ocean metaphor elegantly summarises their vision of the kind of expanding, competi...
<ul><li>Strategy in an Era of global Giants </li></ul><ul><li>The world’s largest corporations are greatly increasing thei...
<ul><li>The “between company” trend </li></ul><ul><li>1)  start-ups </li></ul><ul><li>2) large groups’ acquisition but not...
<ul><li>Beyond the Unbundling Corporation </li></ul><ul><li>In the past companies were built on the principle “ Do more an...
<ul><li>New thinking about strategy comes with a whole lexicon of new buzzwords. Forget about value chain, experience curv...
<ul><li>A company should be viewed not as a member of a single industry but as a part of a  business ecosystem  that cross...
The Future of Management <ul><li>What fuels long-term business success?  Not operational excellence, technology breakthrou...
The Future of Management <ul><li>The management paradigm of the last century – centred on control and efficiency – no long...
Strategy in crisis <ul><li>The past is no longer a guide to the future.  To meet the challenges of discontinuity and to pe...
Strategy in a ‘structural break’ <ul><li>During hard times, a structural break in the economy is an opportunity in disguis...
Strategy in a ‘structural break’ <ul><li>For many managers, the word has become a verbal tic.  Business lingo has transfor...
Strategy in a ‘structural break’ <ul><li>By strategy, I mean a cohesive response to a challenge.  A real strategy is neith...
Hidden flaws in strategy <ul><li>After nearly 40 years, the theory of business strategy is well developed and widely disse...
Hidden flaws in strategy <ul><li>As scientists uncover more of its inner workings through brain-mapping techniques, our un...
The Strategy Paradox <ul><li>Why committing to success leads to failure. </li></ul><ul><li>Unfortunately, the prerequisite...
The Strategy Paradox <ul><li>Realising this, even if only intuitively, most managers shy away from the bold commitments th...
<ul><li>Structured Chaos.  The chaos imposed by today’s misguided mandate for “addition by subtraction” profitability. </l...
<ul><li>Like vinyl records and Volkswagen Beetles, sustainable competitive advantages are back in style – or will be as co...
<ul><li>The next revolution in interactions </li></ul><ul><li>Successful efforts to exploit the growing importance of comp...
<ul><li>Spider versus spider </li></ul><ul><li>Are “webs” a new strategy for information age? </li></ul><ul><li>What are w...
<ul><li>Netscape’s strategy exemplifies a new form of industrial structure “webs”, or clusters of companies that collabora...
Innovation Tournaments <ul><li>An innovation tournament, just like its counterpart in sports, starts with a large number o...
The Sense-and-Respond Enterprise <ul><li>What does it mean to be a “sense-and-respond” organisation? </li></ul><ul><li>Bus...
The Sense-and-Respond Enterprise <ul><li>Five new competencies that an adaptive enterprise is required to have in order fo...
The Sense-and-Respond Enterprise <ul><li>A sense-and-respond organisation is an “effects-based” structure that is designed...
Customer Sensing Sensing potential for  in customer/ user behavior and new customer value  propositions  Business systems ...
Tired of strategic planning? <ul><li>Many companies get little value from their annual strategic-planning process.  It sho...
Tired of strategic planning? <ul><li>Why the mismatch between effort and result?  The annual strategy review frequently am...
<ul><li>Traditional planning processes focus on “ how ” to take your organisation from where it is today to where you want...
<ul><li>In this evolving world of transparency, it makes much more sense to develop a “ why ” based strategy or strategic ...
<ul><li>Because managers have been trained in traditional  how  based strategic planning, it is rare to find widespread un...
By being too over-focused on analysis and extrapolation rather than creativity and invention, strategic planning tends to ...
<ul><li>Marketing is dead. We need to create  movements  instead.  The role of marketers is to find ways to bring optimism...
<ul><li>New Strategic Thinking in Marketing </li></ul><ul><li>The twilight of Interruption, the Dawn of Engagement Marketi...
<ul><li>The frontier between the brand being in control of the conversation (classical marketing) gives way to behind-the-...
Marketing as a Transformational Engine <ul><li>The Decline of Marketing </li></ul><ul><li>Over the past two decades, marke...
Marketing as a Transformational Engine <ul><li>Many CEOs unable to count on their marketing departments for results, have ...
Marketing as a Transformational Engine <ul><li>A true market orientation does not mean becoming marketing-driven; it means...
Marketing as a Transformational Engine <ul><li>The Ubiquity of Marketing Activities </li></ul><ul><li>If one believes that...
Marketing as a Transformational Engine <ul><li>The Networked Organisation </li></ul><ul><li>The tightly specified, vertica...
Marketing as a Transformational Engine <ul><li>Marketing in the Networked Organisation </li></ul><ul><li>Consequently, org...
Adding Value:  The Future of Marketing <ul><li>We stand at the beginning of the next evolution of marketing – one that has...
Adding Value:  The Future of Marketing <ul><li>Some businesses are taking the idea of marketing with meaning a step furthe...
Will meaningful marketing take over? <ul><li>There is a new evolution in marketing that is about improving customers’ live...
<ul><li>Why does is make business sense? </li></ul><ul><li>Meaning Marketing no only improves customer’s lives, it also im...
Will meaningful marketing take over? <ul><li>How do we market with meaning? </li></ul><ul><li>We stop interrupting people ...
<ul><li>First half – essentially strategic;  </li></ul><ul><li>Second half – more tactical (with interaction effects) </li...
<ul><li>Most of the fuss about marketing accountability and effectiveness is a “red herring” because focuses entirely on t...
<ul><li>Lean consumption is not about reducing the amount customers buy or the business they bring. Rather, it is about pr...
Marketing in the Age of Turbulence <ul><li>To get management to move from marketing to “consumering”, will develop better ...
<ul><li>What is preventing the marketing department from taking on a stronger leadership role? </li></ul><ul><li>Most mark...
<ul><li>Most marketing departments are tactical, not strategic.  They can do marketing research and marketing communicatio...
<ul><li>Opportunities lie within the economic downturn.  You can take advantage of them if you start marketing strategical...
<ul><li>Yes, if the marketers cannot provide performance metrics for their expenditures.  Marketers have had it easy in th...
<ul><li>The guess is that only 1 out of 10, maybe only 1 out of 20, advertising campaigns really makes a financial contrib...
<ul><li>Create “Choosing” (Not just “Shopping”) Experiences </li></ul><ul><li>The shopping experience at every store along...
<ul><li>Since we know that increased choice tends to freeze decision making, the result will be consumers who shop more an...
Marketing Planning Management <ul><li>Marketing planning documents will grow shorter in the future. </li></ul><ul><li>Much...
Market-Driving Strategies <ul><li>Today, we see a lot of companies that are being market-driven.  In short, they are being...
<ul><li>Market-driving strategies – as opposed to market-driven strategies – involve the latest development in the marketi...
Two new orientations to Marketplace   (1) Market strategy Segmentation strategy Marketing research focus “ Listen to” Pric...
Two new orientations to Marketplace   (2) Sales Management Channel Management Brand Management Customer Service Product De...
<ul><li>The future of digital will mainly be mobile, be it on computer tablets or smartphones.  Therefore, two key technol...
<ul><li>We do not need to know about people’s lifestyles, or their personal information, to be able to target them with th...
<ul><li>Is This a Golden Era for Marketing Productivity? </li></ul><ul><li>Improving the ways in which a company listens t...
<ul><li>Optimising a different ratio is more relevant when creating a marketing strategy for the business environment toda...
<ul><li>While it is great to think that one day all marketing will be entirely analytical and based on some algorithm some...
International Marketing Trends Diversity  versus  Convergence
Global Individualism (Marketing)    (Manufacturing) Global 1 – to – 1 Marketing Mass  Customization Global individualism
Bottom-up Approach Top-down approach Bottom-up approach Mass Segments of unknown customers with common selection criteria ...
Globalised marketing operations Global concept Global key  accounts  channels Global core communication Cross border Basic...
<ul><li>The death of insist.  </li></ul><ul><li>- I insist you watch this ad.  </li></ul><ul><li>- I insist you visit our ...
<ul><li>Never stop thinking about tomorrow. </li></ul>
<ul><li>VISION WITHOUT ACTION IS A DREAM </li></ul><ul><li>ACTION WITHOUT VISION IS SIMPLY  PASSING THE TIME </li></ul><ul...
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10. new strategic thinking in marketing from the new normal

  1. 1. New Strategic Thinking in Marketing From the “new normal”, structural breaks, toxic effects and economic webs to choosing experiences and transformational engines Professor Luiz Moutinho Foundation Chair of Marketing University of Glasgow, Scotland
  2. 2. <ul><li>Traits of the New Paradigm </li></ul>
  3. 3. New Paradigm in Management Appropriate consumption Jobs to fit people Autonomy encouraged, worker participation Cross fertilisation by specialists seeing wide relevance Identity transcends job description Recognition of uncertainty Cooperation Blurring of work and play Sense of change Qualitative as well as quantitative Spiritual values transcend material gain Transcends polarities Ecologically sensitive Rational and intuitive Recognition that long-range efficiency must take into account harmonious work environment Decentralised operations when possible Attempt to understand the whole, locate deep underlying causes of disharmony Promote consumption at all costs People to fit jobs Imposed goals, top-down decision making Fragmentation in work and roles Identification with job Clock model of company Aggression, competition Work and play separate Struggle for stability Quantitative Strictly economic motives Polarized Emphasis on short-term solutions Centralised operations Allopathic treatment New Paradigm Old Paradigm
  4. 4. PARADIGM SHIFTS <ul><li>Attention economy </li></ul><ul><li>Experience economy </li></ul><ul><li>Conversation economy </li></ul><ul><li>Application economy </li></ul><ul><li>Emotion economy </li></ul><ul><li>A shift from “telling and selling” </li></ul><ul><li>Marketing Evolves from Selling to Citizenship </li></ul>Share- and- compare economy Secret Economy (underground world of P2P search – Metrics Vacuum) AGE OF RECOMMENDATION Silver Economy Participation Economy Speed Economy
  5. 5. <ul><li>We look for emotional connection and empowerment in all areas of life. </li></ul><ul><li>CONTRASTS CO-EXIST </li></ul><ul><li>We live in a multidimensional world where contrast and diversity rule. </li></ul>
  6. 6. <ul><li>GLOBALISATION / GLOCALISATION </li></ul><ul><li>ASIA AND NEW ECONOMICS </li></ul><ul><li>CONVENIENCE TECHNOLOGY </li></ul><ul><li>CONNECTED </li></ul><ul><li>SMART TECHNOLOGY </li></ul><ul><li>TRANSPARENCY </li></ul><ul><li>GLOBAL SUSTAINERS </li></ul><ul><li>RETHINKING ENERGY </li></ul><ul><li>THE CREATIVE CLASS </li></ul><ul><li>AGEING POPULATION </li></ul><ul><li>FEMALE EMPOWERMENT </li></ul><ul><li>HEALTH AND WELLBEING </li></ul>Here are the key trends that are shaping tomorrow:
  7. 7. Convenience Technology <ul><li>Convenience technology provides today’s people with a tool that empower them and give them a degree of ease in a hectic world. We can now control and juggle our life in a way unheard of just 15 years ago. </li></ul>
  8. 8. Transparency <ul><li>Transparency implies openness, communication, and accountability. Businesses and governments must have an attractive ethical dimension and practice a ‘genuine caring attitude’. Tomorrow’s citizen wants fair trade and traceability – he/she wants more meaning. </li></ul>
  9. 9. <ul><li>Transparency </li></ul><ul><li>will continue its ascendancy to being the over-arching guiding principle for corporate behaviour. </li></ul><ul><li>Every corporate boardroom should have a goldfish bowl sitting in the middle of the table, to remind the Directors of the increasing scrutiny under which they operate. </li></ul><ul><li>A return to long-term thinking. In the wake of corporate scandals and a general disgust with greed, the best CEO’s will increasingly focus on long-term, deeper issues… </li></ul>
  10. 10. Ageing Population <ul><li>The ticking retirement time bomb is a growing concern - will it become an unsustainable burden for future taxpayers? Will we have to raise retirement age and work till we are 70? On the positive side we slowly see attitudes shift to a more positive social, cultural and corporate mindset of age and aging. </li></ul>
  11. 11. Interactive Platforms <ul><li>Exchange of ideas encouraging co-creation will set tomorrow’s agenda. </li></ul><ul><li>In the future people will demand a deeper insight into how various products can benefit and truly can empower their everyday lives. </li></ul><ul><li>Nokia: Connecting People and </li></ul><ul><li>Apple: the i-pod generation </li></ul>
  12. 12. Navigating the new normal <ul><li>Are we experiencing a conventional economic cycle? Or did the financial crisis of 2008 and subsequent global economic downturn mark the beginning of a “new normal” characterised by fundamental changes in the use of leverage, trajectory of globalisation, nature of consumption patterns, and appetite for risk taking? </li></ul><ul><li>An environment in which setting strategy has become more complex: planning cycles are shrinking, future growth trajectories are harder to predict, and business assumptions that once seemed indisputable are now coming into question. </li></ul>
  13. 13. The new normal <ul><li>The business landscape has changed fundamentally; tomorrow’s environment will be different, but no less rich in possibilities for those who are prepared. </li></ul><ul><li>It is Increasingly clear that the current downturn is fundamentally different from recessions of recent decades. We are experiencing not merely another turn of the business cycle, but a restructuring of the economic order. </li></ul>
  14. 14. The new normal <ul><li>For some organisations, near-term survival is the only agenda item. Others are peering through the fog of uncertainty, thinking about how to position themselves once the crisis has passed and things return to normal. The question is, “What will normal look like?” While no one can say how long the crisis will last, what we find on the other side will not look like the normal of recent years. The new normal will be shaped by a confluence of powerful forces – some arising directly from the financial crisis and some that were at work long before it began. </li></ul><ul><li>Obviously, there will be significantly less financial leverage in the system. </li></ul>
  15. 15. <ul><li>Five interconnected themes that highlight the opportunities and challenges faced by global economic integration: </li></ul><ul><li>Growth in emerging markets </li></ul><ul><li>Labour productivity and talent management </li></ul><ul><li>The global flow of goods, information and capital </li></ul><ul><li>Natural-resources management </li></ul><ul><li>The increasing role of governments </li></ul>
  16. 16. <ul><li>Kim and Mauborgne’s (2005) blue ocean metaphor elegantly summarises their vision of the kind of expanding, competitor-free markets that innovative companies can navigate. Unlike “red oceans”, which are well explored and crowded with competitors, “blue oceans” represent “untapped market space” and the “opportunity for highly profitable growth”. The only reason more big companies do not set sail for them, is that the dominant focus of strategy work over the past twenty-five years has been on competition-based red ocean strategies, i.e., finding new ways to cut costs and grow revenue by taking away market share from the competition. They urge companies to “focus on the big picture, not the numbers”. </li></ul>
  17. 17. <ul><li>Strategy in an Era of global Giants </li></ul><ul><li>The world’s largest corporations are greatly increasing their scale and scope, and the resulting mega-institutions are fundamentally changing the landscape of business. </li></ul><ul><li>These mega-institutions have disproportionately high profits and market volumes because they understand the link between their profitability and the talents of their professionals and knowledge workers. </li></ul><ul><li>Mega-institutions are pioneering a new model of competitive advantage by using their huge size to develop and exploit intangible assets in novel ways. </li></ul><ul><li>But, are consumers racking up the benefits? </li></ul>
  18. 18. <ul><li>The “between company” trend </li></ul><ul><li>1) start-ups </li></ul><ul><li>2) large groups’ acquisition but not good at radical innovation and </li></ul><ul><li>3) the adoptive brand industry , developing, re-launching and squeezing mature brands, has a strong future as well as providing wonderful employment challenge to the most highly skilled marketers. </li></ul><ul><li>The “within company” trend is the opposite: </li></ul><ul><li>Marketers, top managers, HR, operations and finance will be increasingly brought together by the “marketing dashboard”. </li></ul><ul><li>To drive the business we need a dashboard that incorporates key marketing metrics. </li></ul>
  19. 19. <ul><li>Beyond the Unbundling Corporation </li></ul><ul><li>In the past companies were built on the principle “ Do more and do it cheaper” but today the match words are “fewer, faster and less” (F 2+ L) – fewer assets, faster growth and less activity managed under one roof. </li></ul><ul><li>So far, these goals have inspired three forms of corporate organisation: simple outsourcing, unbundled companies (focusing on specific economic functions, such as manufacturing , product innovation or customer care) and, most recently, networked corporations (collaborative networks of suppliers, distributors, subcontractors and customers). </li></ul><ul><li>Networked companies have created far more value than their industry peers over the past years and have held more robustly in the recent market downturn. </li></ul>
  20. 20. <ul><li>New thinking about strategy comes with a whole lexicon of new buzzwords. Forget about value chain, experience curves, stars and dogs. </li></ul><ul><li>Now, any enlightened discussion of strategy is likely to include talk of “co-evolution” and the “ business ecosystem ” – creating networks of relationships with customers, suppliers and rivals to gain greater competitive advantage. </li></ul><ul><li>In an ecosystem, companies sometimes compete and often cooperate to come up with innovations, create new products and serve customers. </li></ul><ul><li>It changes your vision of the business in the future. You start thinking about how you can get increased value from all the pieces of the company. You have to bring in new voices to the process. </li></ul>
  21. 21. <ul><li>A company should be viewed not as a member of a single industry but as a part of a business ecosystem that crosses a variety of industries </li></ul><ul><li>In a business ecosystem, companies co-evolve capabilities around a new innovation: they work co-operatively and competitively ( coopetition ) to support new products, satisfy customer needs and eventually incorporate the next round of innovations. </li></ul>
  22. 22. The Future of Management <ul><li>What fuels long-term business success? Not operational excellence, technology breakthroughs, or new business models, but management innovation – new ways of mobilising talent, allocating resources, and formulating strategies. Through history, management innovation has enables companies to cross new performance thresholds and build enduring advantages. </li></ul>
  23. 23. The Future of Management <ul><li>The management paradigm of the last century – centred on control and efficiency – no longer suffices in a world where adaptability and creativity drive business success. To thrive in the future, companies must reinvent management. </li></ul><ul><li>The toxic effects of traditional management beliefs. </li></ul><ul><li>Radical principles will need to become part of every company’s “management DNA”. </li></ul>
  24. 24. Strategy in crisis <ul><li>The past is no longer a guide to the future. To meet the challenges of discontinuity and to perform like markets, a corporation must learn to change as rapidly as they do. </li></ul><ul><li>Recession aftershocks, huge new risks, persuasive uncertainty – the challenges defining today’s business environment place a greater premium than ever on good corporate strategy. Yet the strategic-planning approaches that many corporations devised for such times are ineffective. </li></ul>
  25. 25. Strategy in a ‘structural break’ <ul><li>During hard times, a structural break in the economy is an opportunity in disguise. To survive – and, eventually, to flourish – companies must learn to exploit it. </li></ul><ul><li>There is nothing like a crisis to clarify the mind. In suddenly volatile and different times, you must have a strategy. I do not mean most of the things people call strategy – mission statements, audacious goals, three- to five-year budget plans. I mean a real strategy. </li></ul>
  26. 26. Strategy in a ‘structural break’ <ul><li>For many managers, the word has become a verbal tic. Business lingo has transformed marketing into marketing strategy, data processing into IT strategy, acquisitions into growth strategy. Cut prices and you have a low-price strategy. Equating strategy with success, audacity, or ambition creates still more confusion. A lot of people label anything that bears the CEO’s signature as strategic – a definition based on the decider’s pay grade, not the decision. </li></ul>
  27. 27. Strategy in a ‘structural break’ <ul><li>By strategy, I mean a cohesive response to a challenge. A real strategy is neither a document nor a forecast bur rather an overall approach based on a diagnosis of a challenge. The most important element of a strategy is a coherent viewpoint about the forces at work, not a plan. </li></ul>
  28. 28. Hidden flaws in strategy <ul><li>After nearly 40 years, the theory of business strategy is well developed and widely disseminated. Most senior executives have been trained in its principles, and large corporations have their own skilled strategy departments. </li></ul><ul><li>Yet the business world remains littered with examples of bad strategies. Why? What makes chief executives back them when so much know-how is available? Flawed analysis, excessive ambition, greed, and other corporate vices are possible causes. One contributing factor that affects every strategist: the human brain. </li></ul>
  29. 29. Hidden flaws in strategy <ul><li>As scientists uncover more of its inner workings through brain-mapping techniques, our understanding of its astonishing abilities increases. But the brain is not the rational calculating machine we sometimes imagine. Over the millennia of its evolution, it has developed shortcuts, simplifications, biases, and basic bad habits. </li></ul>
  30. 30. The Strategy Paradox <ul><li>Why committing to success leads to failure. </li></ul><ul><li>Unfortunately, the prerequisites of success are almost always the ingredients of failure, too. The sad truth is that most companies have left their futures almost entirely to chance, and do not even realise it. The reason? Managers feel they must make choices with far-reaching consequences today, but must base those choices on assumptions about a future they cannot predict. It is this collision between commitment and uncertainty that creates THE STRATEGY PARADOX. </li></ul>
  31. 31. The Strategy Paradox <ul><li>Realising this, even if only intuitively, most managers shy away from the bold commitments that success seems to demands, choosing instead timid, unremarkable strategies, sacrificing any chance at greatness for a better chance at mere survival. </li></ul>
  32. 32. <ul><li>Structured Chaos. The chaos imposed by today’s misguided mandate for “addition by subtraction” profitability. </li></ul><ul><li>Focusing on profits can destroy even well-run corporations. Companies should expand by being “disruptors” who are able to outpace their entrenched competition. </li></ul>
  33. 33. <ul><li>Like vinyl records and Volkswagen Beetles, sustainable competitive advantages are back in style – or will be as companies turn their attention to making their most talented, highly paid workers more productive. For the past 30 years, companies have boosted their labour productivity by re-engineering, automating, or outsourcing production and clerical jobs. But any advantage in costs or distinctiveness that companies gained in this way was usually short lived, for their rivals adopted similar technologies and process improvements and thus quickly matched the leaders. </li></ul>
  34. 34. <ul><li>The next revolution in interactions </li></ul><ul><li>Successful efforts to exploit the growing importance of complex interactions could well generate durable competitive advantages. </li></ul>
  35. 35. <ul><li>Spider versus spider </li></ul><ul><li>Are “webs” a new strategy for information age? </li></ul><ul><li>What are webs? </li></ul><ul><li>An economic web is a set of companies that use a common architecture to deliver independent elements of an overall value proposition that grows stronger as more companies join. </li></ul><ul><li>Think of Netscape. If you consider how quickly it has mobilised other companies to support and implement its technology, you begin to see why the excitement may be justified. </li></ul>
  36. 36. <ul><li>Netscape’s strategy exemplifies a new form of industrial structure “webs”, or clusters of companies that collaborate on a particular technology. Webs are a natural response to environments fraught with risk and uncertainty – which is why they are prevalent in high-technology arenas. They create powerful new ways to think about strategy, risk, technological uncertainty, and innovation. Webs help us see why the “virtual company” may be more than just an abstract concept. They influence management focus, organisational structure, performance measurement, and information systems. Webs may even represent the opening salvo in the transition from industrial-age to information-age strategies. </li></ul>
  37. 37. Innovation Tournaments <ul><li>An innovation tournament, just like its counterpart in sports, starts with a large number of candidates, with opportunities as the players. These opportunities are pitted against each other until only the exceptional survive. </li></ul>
  38. 38. The Sense-and-Respond Enterprise <ul><li>What does it mean to be a “sense-and-respond” organisation? </li></ul><ul><li>Businesses and organisations should be designed and manages as systems linked by cross-enterprise processes – as opposed to hierarchical structures or authority. </li></ul><ul><li>The new sense-and-respond business mode is helping companies systematically cope with the unexpected. </li></ul>
  39. 39. The Sense-and-Respond Enterprise <ul><li>Five new competencies that an adaptive enterprise is required to have in order for it to be considered truly a sense-and-respond business model. These five competencies include: 1) knowing earlier, 2) managing-by-wire, 3) designing a business as a system, 4) dispatching capabilities from the customer request back (e.g., coordination), and 5) context-giving leadership. </li></ul>
  40. 40. The Sense-and-Respond Enterprise <ul><li>A sense-and-respond organisation is an “effects-based” structure that is designed as a “roles and accountability” system. </li></ul><ul><li>This customer-centric (or customer-back ) philosophy provides the foundation for the S&R adaptive business design. </li></ul>
  41. 41. Customer Sensing Sensing potential for in customer/ user behavior and new customer value propositions Business systems infrastructure Sensing Sensing the potential for value system (re)configuration, including new and challenging organisational structures Economic/profitability Sensing Sensing the economy feasi- bility and profitability of the proposed business models B USINESS M ODEL R EINVENTION Technology Sensing Sensing the strength direction and impact of technology Economic payback Incentives to switch Profitability New customer values New effectiveness Delay rapid obsolescence Improving customer benefits Persuasion requirements (Adapted from Voelpel, Leibold, Tekie and von Keogh, 2005) New business network roles Improved business network effectiveness The Sense-and-Respond Model – Use testing key elements of business models for industry Reflection
  42. 42. Tired of strategic planning? <ul><li>Many companies get little value from their annual strategic-planning process. It should be redesigned to support real-time strategy making and to encourage ‘creative accidents’. </li></ul><ul><li>The extraordinary reality is that few executives think this time-consuming process pays off, and many CEOs complain that their strategic-planning process yields few new ideas and is often fraught with politics. </li></ul>
  43. 43. Tired of strategic planning? <ul><li>Why the mismatch between effort and result? The annual strategy review frequently amounts to little more than a stage on which business unit leaders present warmed-over updates of last year’s presentations, take few risks in broaching new ideas, and strive above all to avoid embarrassment. They do not prepare executives to face the strategic uncertainties ahead or serve as the focal point for creative thinking. </li></ul>
  44. 44. <ul><li>Traditional planning processes focus on “ how ” to take your organisation from where it is today to where you want it to be in the future. The problem with traditional planning processes is that they fail when imperfect knowledge, unintended consequences, uncertainty, luck or internal resistance block the approach outlined in the strategy or plan. </li></ul>
  45. 45. <ul><li>In this evolving world of transparency, it makes much more sense to develop a “ why ” based strategy or strategic plan leaving flexibility in how. Why based plans include input from all the stakeholders greatly increasing the inputs (eliminating the need for P.E.S.T.L.E. and S.W.O.T. ) and thereby creating more choices. The involvement of more people, means a more bottom-up approach and the greater the support for the resulting plan. Acceptance of why based plans results in empowerment with people finding new ways to reach the goal when obstacles appear. </li></ul>
  46. 46. <ul><li>Because managers have been trained in traditional how based strategic planning, it is rare to find widespread understanding and acceptance in most organisations. </li></ul>
  47. 47. By being too over-focused on analysis and extrapolation rather than creativity and invention, strategic planning tends to create the illusion of certainty in a world where certainty is anything but guaranteed.
  48. 48. <ul><li>Marketing is dead. We need to create movements instead. The role of marketers is to find ways to bring optimism and joy to people, to improve people’s lives. When we think about ROI for the consumer, we are not thinking of return on investment any longer, but return on involvement… all the time you are creating your strategy just think, “how can I put myself at the heart of the consumer?”. </li></ul><ul><li>Consumer Generated Marketing (CGM) </li></ul>
  49. 49. <ul><li>New Strategic Thinking in Marketing </li></ul><ul><li>The twilight of Interruption, the Dawn of Engagement Marketing. </li></ul><ul><li>Conventional interruptive marketing no longer has the benefit of authenticity and therefore retains very little credibility. </li></ul>
  50. 50. <ul><li>The frontier between the brand being in control of the conversation (classical marketing) gives way to behind-the-line power, enabling the customer to take charge. </li></ul>
  51. 51. Marketing as a Transformational Engine <ul><li>The Decline of Marketing </li></ul><ul><li>Over the past two decades, marketing as the company’s growth engine has sputtered amid increased market fragmentation, strong global competitors, product commoditisation, increasingly shorter product life cycles, skyrocketing customer expectations, and powerful channel members. As a result, the ability of marketing to deliver significant growth has been severely constrained and marketing productivity has declined. Not surprisingly, in many companies, doubts have begun to surface about the value of contemporary marketing. </li></ul>
  52. 52. Marketing as a Transformational Engine <ul><li>Many CEOs unable to count on their marketing departments for results, have had to turn instead to operations and finance, cutting costs and reengineering the supply chain to increase profitability and mergers and acquisitions to grow revenues. Research now demonstrates that, at large companies, only 10 percent of executive meeting time is devoted to marketing. </li></ul><ul><li>Marketing as a function is in some danger of being marginalised… </li></ul><ul><li>It is about marketers doing better things rather than simply doing things better. </li></ul>
  53. 53. Marketing as a Transformational Engine <ul><li>A true market orientation does not mean becoming marketing-driven; it means that the entire company obsesses over creating value for the customer and views itself as a bundle of processes that profitably define, create, communicate, and deliver value to its customers. </li></ul>
  54. 54. Marketing as a Transformational Engine <ul><li>The Ubiquity of Marketing Activities </li></ul><ul><li>If one believes that everyone in the organisation should serve the customer and create customer value, then obviously everyone must do marketing regardless of function or department. In fact, most of the traditional activities under the control of marketing, such as market research, advertising, and promotions, are perhaps the least important elements in creating customer value. </li></ul>
  55. 55. Marketing as a Transformational Engine <ul><li>The Networked Organisation </li></ul><ul><li>The tightly specified, vertical functional, divisional, and close organisation is slowly becoming relatively loose, horizontal, flexible, dynamic, and networked. </li></ul>
  56. 56. Marketing as a Transformational Engine <ul><li>Marketing in the Networked Organisation </li></ul><ul><li>Consequently, organisations are emphasising integration over specialisation. But traditionally, marketing has systematically prioritised specialisation over generalisation, rewarding its academics and practitioners, alike for knowing more and more about less and less. </li></ul><ul><li>Faith-based marketing is no longer an option </li></ul>
  57. 57. Adding Value: The Future of Marketing <ul><li>We stand at the beginning of the next evolution of marketing – one that has more in common with the past than it does the present. </li></ul><ul><li>People have learned to ignore the 3,000 ad messages that they are bombarded with daily. Event if they do see your carefully crafted advertisement, they are likely to doubt its claims – and defer instead to the wisdom of crowds online. </li></ul><ul><li>Talking holograms will not save the ‘old guard’, interruptive advertising model. We must create marketing that adds value to people’s lives. </li></ul>
  58. 58. Adding Value: The Future of Marketing <ul><li>Some businesses are taking the idea of marketing with meaning a step further, purposely preventing customers from incurring high fees and bills. By actively stopping poor buying decisions – especially at the risk of lost sales – these businesses build enormous trust, earn loyalty for life and generate positive word-of-mouth marketing both online and offline. </li></ul>
  59. 59. Will meaningful marketing take over? <ul><li>There is a new evolution in marketing that is about improving customers’ lives. It is called meaningful marketing or marketing with meaning. Economic and social forces are colliding to fuel the staying power of meaningful marketing. </li></ul><ul><li>Marketing with meaning is about improving customers’ lives through the marketing itself. </li></ul>
  60. 60. <ul><li>Why does is make business sense? </li></ul><ul><li>Meaning Marketing no only improves customer’s lives, it also impacts the bottom line. According to research companies that practice meaningful marketing are twice as likely to deliver sustained success and four times less likely to require significant price discounting. </li></ul>Will meaningful marketing take over?
  61. 61. Will meaningful marketing take over? <ul><li>How do we market with meaning? </li></ul><ul><li>We stop interrupting people to tell them how great our products are and we start doing something to prove our greatness. At its core meaningful marketing is about creating value. And when we ‘Do’ versus ‘Declare’, we create more of it. </li></ul><ul><li>Brands that are improving peoples’ lives in a meaningful way. </li></ul>
  62. 62. <ul><li>First half – essentially strategic; </li></ul><ul><li>Second half – more tactical (with interaction effects) </li></ul><ul><li>If the two halves of Marketing become separated, then Marketing is reduced to its common role as a tactical corporate entity </li></ul><ul><li>The issue marketers need to address is not communication but value . Value goes right to the heart of what the organisation does and how it does it. </li></ul>(Adapted from A. Mitchell, December 2005) <ul><li>Marketing has 2 core functions: </li></ul><ul><ul><li>internalising signals from the market and </li></ul></ul><ul><ul><li>presenting the outputs of the resulting activities to the outside world </li></ul></ul>
  63. 63. <ul><li>Most of the fuss about marketing accountability and effectiveness is a “red herring” because focuses entirely on the second half – communication – in isolation from the first half. </li></ul><ul><li>99/100 times, value parity is either imagined or breakable. The fuss about “Marketing” (e.g., communication) effectiveness is mainly a displacement activity for the real problem which is “ value effectiveness ” </li></ul><ul><li>(Adapted from A. Mitchell, December 2005) </li></ul><ul><li>A business is a value delivery system! </li></ul>
  64. 64. <ul><li>Lean consumption is not about reducing the amount customers buy or the business they bring. Rather, it is about providing the full value that consumers desire from their goods and services, with the greatest efficiency and least pain. </li></ul><ul><li>The key word here is “ process ”. Think about consumption not as an isolated moment of decision about purchasing a specific product, but as a continuing process linking many goods and services to solve consumer problems. </li></ul><ul><li>Some companies – along with their customers – have started the culture shift that will make lean consumption possible. And they are finding that everybody wins. </li></ul>Lean consumption
  65. 65. Marketing in the Age of Turbulence <ul><li>To get management to move from marketing to “consumering”, will develop better ways to get customer insight, will develop better metrics for measuring the impact of different marketing efforts, will protect and enhance the company’s brands, and will bring in new marketing technologies and skills to the marketing department. </li></ul>
  66. 66. <ul><li>What is preventing the marketing department from taking on a stronger leadership role? </li></ul><ul><li>Most marketers have been hired into a marketing department because they are right-brain trained – that is, creative. They are less well-trained in their left brain, the part that thinks about numbers, finance, and evidence. But they have to deal with managers who by and large are left-brain trained. The key need then is to put into the marketing department some sharp left-brain people or two-brain people who can work with the other managers. Once department managers begin to deal with some two-brain strategic marketing managers, marketing will play a stronger leadership role. </li></ul>Marketing in the Age of Turbulence
  67. 67. <ul><li>Most marketing departments are tactical, not strategic. They can do marketing research and marketing communications (ads, brochures), and have other skills for developing and launching a product. But they do not really drive the company’s growth strategy. </li></ul>Marketing in the Age of Turbulence
  68. 68. <ul><li>Opportunities lie within the economic downturn. You can take advantage of them if you start marketing strategically instead of blindly. </li></ul><ul><li>In these troubled times, companies are cutting their marketing budgets – in fact, marketing is one of the first departments to be cut. Do you think it is a wise move to cut the marketing budget? </li></ul>Marketing in the Age of Turbulence
  69. 69. <ul><li>Yes, if the marketers cannot provide performance metrics for their expenditures. Marketers have had it easy in the past, getting lots of money for 30-second commercials without having to produce any evidence of their sales or profit impact. Advertising was a matter of faith, not reason. The plot was to get a large share of voice so that the brand was locked in the customers’ memories. Hopefully the message promised something distinctive and the customer who wanted that point of difference would automatically choose that brand. </li></ul>Marketing in the Age of Turbulence
  70. 70. <ul><li>The guess is that only 1 out of 10, maybe only 1 out of 20, advertising campaigns really makes a financial contribution. That means that the average company has only 1 chance in 10 or 20 that its ad campaign will create a memorable and motivating message. </li></ul><ul><li>If advertisers spent the same amount of money on improving their products as they do on advertising, the would not have to advertise them. Heavy advertising spending is often on products that have little distinction. The company would be smarter to save that money and use it to build a better product. </li></ul><ul><li>A down period introduces as much opportunity as it does chaos. Some companies see cracks of sunshine in this otherwise gloomy picture. </li></ul>Marketing in the Age of Turbulence
  71. 71. <ul><li>Create “Choosing” (Not just “Shopping”) Experiences </li></ul><ul><li>The shopping experience at every store along this route is pretty much the same. The only difference is how much each merchant is willing to cut its prices: by 20%, 40% or even 75%. None of them has created a choosing process – in which customers’ actions are guided by known principles of behavioural economics that help them make a purchase, not just look around. Instead, the retailers simply stuff the shelves, windows, and hallways with option after option after option, driving more shopping and less choosing. </li></ul>
  72. 72. <ul><li>Since we know that increased choice tends to freeze decision making, the result will be consumers who shop more and more and choose less and less. </li></ul><ul><li>Is your sales process increasing choosing behaviour or simply fomenting increased shopping? If your answer is the latter, you need to start designing a customer-choosing process. </li></ul>
  73. 73. Marketing Planning Management <ul><li>Marketing planning documents will grow shorter in the future. </li></ul><ul><li>Much of the historical detail will be consigned to product fact books (PFB). </li></ul><ul><li>Marketers: Bid farewell to strategy </li></ul><ul><li>based on old 4 Ps… </li></ul>
  74. 74. Market-Driving Strategies <ul><li>Today, we see a lot of companies that are being market-driven. In short, they are being led by the market. Now, that is not a good place to be. </li></ul><ul><li>Businesses can now become market driving. But mind YOU, this is not a once a year activity. </li></ul><ul><li>Market-Driving Strategies are ‘everyday mindsets’. </li></ul><ul><li>Market-Driving Strategies shape the market. These strategies define how a firm embraces innovative changes in industry logic and business system. </li></ul>
  75. 75. <ul><li>Market-driving strategies – as opposed to market-driven strategies – involve the latest development in the marketing discipline. </li></ul><ul><li>Unfortunately, most companies are still practicing their traditional ways, still trapped in their old paradigm of customer satisfaction. </li></ul><ul><li>Market-driving strategies have one critical pillar. </li></ul><ul><li>Value creation, whereby instead of following the traditional logic of industry, firms can learn from the logic of strategy by being different instead of merely being better, breaking industry rules by redefining both the value proposition and marketing activities. </li></ul>
  76. 76. Two new orientations to Marketplace (1) Market strategy Segmentation strategy Marketing research focus “ Listen to” Price Management Relationship Marketing Segments of one Customers sensing Voice of the customer Bundling/unbundling Revolutionary marketing (how to change the rules of the game) Re-draw the segmentation philosophy Forward sensing (how can the marketplace evolve) Minding Data Seeing differently Curiosity Driven research New price points Customer Driven Market Driving
  77. 77. Two new orientations to Marketplace (2) Sales Management Channel Management Brand Management Customer Service Product Development Sell solutions Multiplex systems Dialogue for corporate equity Strategic weapon Integrating product/ service platforms Providing concepts and co-creation Channel reconfiguration Exploit “Buzz network” Overwhelm expectations Radical innovation Customer Driven Market Driving
  78. 78. <ul><li>The future of digital will mainly be mobile, be it on computer tablets or smartphones. Therefore, two key technologies will change the digital world: location-based services (especially from a social networking point of view) and augmented reality. The digital experience will be transformed. </li></ul><ul><li>“ Marketing that doesn’t seem like marketing” works as long as it does not try to disguise its commercial origins. Be transparent about commercial messages. Be open about which data is collected, what it is used for. </li></ul>
  79. 79. <ul><li>We do not need to know about people’s lifestyles, or their personal information, to be able to target them with the kind of offers they want to see. </li></ul><ul><li>There is quiet revolution going on, in which the word of a complete stranger can influence purchasing decisions more than any marketing. We still talk about targeting customers, when we should be talking about people. And we should not be targeting them – we should be talking with them. </li></ul>
  80. 80. <ul><li>Is This a Golden Era for Marketing Productivity? </li></ul><ul><li>Improving the ways in which a company listens to its customers and actually implements the customers’ ‘voice’ into action is the way to reach a ‘golden era’ in marketing productivity. </li></ul><ul><li>The future of marketing productivity may well be determined by the extent to which products can improve the quality of life in a holistic sense, rather than trying to create needs where none exist. </li></ul>
  81. 81. <ul><li>Optimising a different ratio is more relevant when creating a marketing strategy for the business environment today. The 5/95 ratio is the percentage of voices of unsatisfied customers actually reaching management’s ears. </li></ul>
  82. 82. <ul><li>While it is great to think that one day all marketing will be entirely analytical and based on some algorithm somewhere in the computing cloud, we have to remember that we live and work in the real world of human wants, needs, desires, psychology, sociology and physiology. If managers can learn to manipulate these variables, they may very well create the next golden rectangle. </li></ul>
  83. 83. International Marketing Trends Diversity versus Convergence
  84. 84. Global Individualism (Marketing) (Manufacturing) Global 1 – to – 1 Marketing Mass Customization Global individualism
  85. 85. Bottom-up Approach Top-down approach Bottom-up approach Mass Segments of unknown customers with common selection criteria (demographic, lifestyle…) Fragments of unknown customer STABLE Global Individualism Portfolios (tribes) of known clients with common behaviour Individualised known clients FLEXIBLE
  86. 86. Globalised marketing operations Global concept Global key accounts channels Global core communication Cross border Basic pricing Flexible systems Hybrid distribution channels Direct interactive communication Hyperflexible pricing Individualised specific offer Global core offer
  87. 87. <ul><li>The death of insist. </li></ul><ul><li>- I insist you watch this ad. </li></ul><ul><li>- I insist you visit our store. </li></ul><ul><li>- I insist you try our new product… </li></ul>The future of Marketing? (Seth Godin)
  88. 88. <ul><li>Never stop thinking about tomorrow. </li></ul>
  89. 89. <ul><li>VISION WITHOUT ACTION IS A DREAM </li></ul><ul><li>ACTION WITHOUT VISION IS SIMPLY PASSING THE TIME </li></ul><ul><li>ACTION WITH VISION IS MAKING A POSITIVE DIFFERENCE! </li></ul>(Joel Baker)

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