Strategic marketing

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  • 1. MARKETINGIn Technology Based Business Prof. Dr. A.J.Groen Professor of Innovative Entrepreneurship a.j.groen@utwente.nl
  • 2. NIKOS Prof. Dr. Aard J. Groen Professor of Innovative Entrepreneurship Full professor of Innovative Entrepreneurship, major interest are market oriented entrepreneurship in networks with technological core element of competititive advantage, support systems of entrepreneurship, innovation and business development in existing companies (including corporate entrepreneurship/venturing) Department chair business administration (2012>) /director NIKOS (2001>) @ School of Management & Governance Leader research group lnnovation & Entrepreneurship @ IGS Institute for Innovation and Governance Studies Associate editor Technovation Journal for technology entrepreneurship and innovation management. (Impact factor 2.995, 2010) Project leader Venture Lab Twente Activity lead Entrepreneurship support system EIT-ICT-Labs Contact: a.j.groen@utwente.nl 2
  • 3. NIKOSHigh Tech markets Market Uncertainty Technological Uncertainty High-Tech Products/ Services Competitive Volatility
  • 4. NIKOS Probability of Success of Innovationprocesses Probability of Probability of Overall Probabilityprobabilityof success = of technical completion X given technical completion X commercialization economic success given commercialization
  • 5. NIKOSCase Video 2000 Best product in class 8 hours of perfect picture video, quick search system, mr Philips: “people like to tape a football game” But…. Standard was closed, so competitors could not build it VHS and Betamax were more open The EU standard for TV (PAL SECAM) is not the same as US standard NTSC no relative advantage for Video 2000 quality there No Porn movies to play on Video 2000, but available in video rental shops for VHS VHS worldstandard
  • 6. NIKOSWhat if you want to develop new products or services?
  • 7. NIKOS So what do we expect from a marketing perspective?  Product orientation  Market orientation The best product is best garantuee for  Serving the need of the customer profit drives profit A better technological developed  Knowing and reacting to the product will drive profit on long run competitors market behavior supports Every part of the organization have to do long term profit the best they can regarding their goals  Interfunctional coördination is necessary for optimal value creation
  • 8. NIKOS Contingency Theory of High-Tech Marketing Marketing New Product Strategy Success Type of Innovation -Breakthrough -IncrementalType of marketing strategy is contingent upon the nature of the innovation.
  • 9. NIKOS Implications of Contingency Theory: Examples Breakthrough IncrementalR&D/Marketing R&D leads; Marketing leads; Interaction “technology push” “customer pull” Type of Lead users; Surveys; focus Marketing empathic design groups Research Selective Role of Primary demand; demand; build Advertising customer education image Pricing May be premium More competitive ©2010 Pearson Education, Inc. publishing as Prentice Hall
  • 10. NIKOSTechnology based perspective Radical I-pad lab on chip for personal medicationSustaining Disruptive OV-chip card electronic thermometer Incremental
  • 11. NIKOSHow to understand competitive advantage of firms? The invisible hand of the market will do its work, those firms delivering most efficiently products for a certain demand will survive. Co-ordinate many visible hands by building value creating networks Services versus products Role of Innovation & Entrepreneurship
  • 12. NIKOSManagement orientations on marketing Strategic marketing (1983-) ‘The marketing function initiates, negotiates and manages acceptable exchange relationships with key interest groups, or constituencies in the pursuit of sustainable competitive advantages, within specific markets, on the basis of long run consumer and channel franchises (Day & Wensley, 1983) Being market oriented implies: 1. Customer orientated 2. Competitive oriented 3. Interdisciplinary / integrated thinking about the business functions
  • 13. NIKOSManagement orientations on marketing Being market orientated implies:1. Customer orientation: Products are designed on the basis of a perceived customer demand; market research is done; Making a buy is simple; Reasonable promises are made and kept; Adequate reaction on mistakes; Measure and improve costumer satisfaction; The company is accessible and provides fast and reliable information. Interaction with the customer is a central concern!
  • 14. NIKOSManagement orientations on marketing Being market oriented implies:2. Competitor orientation: An analysis of the competitors behavior is made and the obtained knowledge is applied in relevant parts of the marketing process; It is known what instrument competitors use; It is known how to react on actions of competitors; Competitive Strategies are made explicit in plans, which are authorized by top management Sustainable competitive advantage is searched for .
  • 15. NIKOSManagement orientations on marketing Being marketoriented implies;3. Interdisciplinary / integrated network-aimed thinking about business functions, e.g.: Thinking about the achievement of added value is process orientated and if necessary, internal and external contact are involved; Customer information is passed on in the network; Relevant information is shared; Use of each others instruments; Partial strategies for departments are being harmonized; Successes and mistakes are shared; The entire organization is market orientated!
  • 16. NIKOSassignment Fill out questionair on market orientation Think about why you think one side is more important then the other? What consequence might it have for your market approach? Do you need to change your organization?
  • 17. NIKOS Three basic preference patterns for Ice CreaminessCreaminess Creaminess Sweetness Sweetness Sweetness
  • 18. NIKOS Segmentation The act of identifying and profiling distinct groups of buyers who might require separate products and/or marketing mixes Identify segmentation variables and segment the market Develop profiles of resulting segments
  • 19. Segmentation variables Bases Descriptors specific; what, why, when, where General; who and where is the and how buys the customer? client?  Product use  ‘Benefits’ (unmet needs) Geografic  Perceptions and preferences Demografic  Sensibility for marketing Social-economic instruments PsychograficBut, are these segments different But, are these segmentsin buying behavior? identifiable and reachable?
  • 20. NIKOSSegmentation on basis of processes of customers Which actors are involved? What sources do they use? Which activities are performed? Dependencies between these categories? (Hakansson, 1987) Example pressure measurement and adjustement of wheelchairs against decupitis
  • 21. NIKOSDemands on segments1. Homogeniety: having the same set of preferences and sensibility for the offering.2. Identifiable: can we establish who and where the clients are?3. Substantial: is the expected size of the segment large enough to warrant investments?4. Measureable: can we measure how much of the market we have reached?5. Reachable: Are the clients open for contact with us?
  • 22. NIKOSFour levels of segmentation Mass marketing Segmented markets Niche marketing Micromarketing
  • 23. NIKOSMarketing is changing: Consequences forSegmentation Micro Segmentation (Micro Marketing) Mass Customization (My adidas, My Dell etc)
  • 24. NIKOSTargeting The act of selecting one or more segments to enter Evaluate the attractiveness of each segment Select the target segment(s)
  • 25. NIKOS PositioningThe act of designing the company’s offering and image so that it occupies a distinct and valued place in the customer’s mind Identify possible positioning concepts for each target market Select, develop, and communicate the chosen positioning concept
  • 26. NIKOSThree generic value propositions  Operational excellence  Customer intimacy  Product leadership
  • 27. NIKOSWhat is Strategic Marketing Management? Business Definition?
  • 28. NIKOSWhat is Strategic Marketing Management? Business Definition?
  • 29. NIKOSWhat is Strategic Marketing Management? Consists five complex and interrelated processes: Defining the organization’s business, mission, and goals Identifying and framing organizational growth opportunities Formulating product-market strategies Budgeting marketing, financial, and production resources Developing reformulation and recovery strategy