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AN INTRODUCTION TO DIFFERENTIATED LEARNING TOOLS
Participants in flexible learning programs have limitations on the nature of the
time they can spend on learning. Typically they are employed fully or partially,
pursuing higher studies or have other social and familial responsibilities.
Availability of time is a great constraint to these students.
To aidthe participants,we have developedfour unique learningtools as below:
 Bullet Notes : Helps in introducing the important concepts in each unit
of curriculum, equip the
student during preparation of
examinations and
 Case Studies : Illustrate the concepts through real life experiences

 Workbook : Helps absorption of learning through questions based on reallife nuggets
 PEP Notes :Sharing notes of practices and experiences in the Industry will help the student to
rightly perceive and get inspired to learn concepts at the cutting edge
application level.placementinterviews
Why are these needed?
 Adults learn differently from B. School or college going
students who spend long hours at campus.
 Enhancing analytical skills through application related learning
kits trigger experiential learning
 Availability of time is a challenge.
 Career success increasingly depends on continuous learning
and success
What makes it relevant?

How is it useful?


Where does this lead to?
As and when you get 5 to 10 minutes you can read one of these and absorb and comprehend.
Spending more time is your choice.
You can use the time in travel, waiting for meetings, lunch time, small breaks or at home
usefully.
Through these tools, the learning bytes are right sized for ease of learning for time challenged
participants.
The content starts from practice and connect to precept making it easy to connect to industry
and retain.
They can be connectedto continuous assessment process of the academic program.
Practitioners can use their real life knowledge and skill to enhance learning skills.
Immediate visualization of the practical dimension of the concept will offer a rich learning
experience.

 Easier to move ahead in the learning process.

 Will facilitate the student to complete the program earlier than
otherwise.Helpsstay motivated and connected.
When is it useful?


PEP Notes
Marketing
Management
 

© The ICFAI Foundationfor Higher Education (IFHE),
Hyderabad,March, 2015. All rights reserved
No part of this publication may be reproduced, stored in a retrieval system, used in a
spreadsheet, or transmitted in any form or by any means – ele ctronic, mechanical,
photocopying or otherwise – without prior permission in wri ting from The ICFAI
Foundation for Higher Education (IFHE), Hyderabad.
Ref. No. MM-PN-IFHE – 032015
For any clarification regarding this book, the students may please write to The ICFAI
Foundation for Higher Education (IFHE), Hyderabad giving the above reference
number of this book specifying chapter and page number.
While every possible care has been taken in type-setting and printing this book, The
ICFAI Foundation for Higher Education (IFHE), Hyderabad welcomes suggestions
from students for improvement in future editions.
Our E-mail ID: cwfeedback@icfaiuniversity.in
ii

INTRODUCTION
Participants in ICFAI University Programs are eager to apply theory to practice. They realize that
application orientation can enhance their learning and subsequent usage of management precepts and
practices. Picking out the principle behind real world events is critical to this learning. Towards th is end
the institution has introduced the PEP Notes.
The PEP Notes (Practice, Experience and Perspective Notes) is a collection of annotative notes on
practices, experiences and perspectives from industry as appearing in articles fromreputed sources such
as Harvard Business Review, Economist, Mckinsey Quarterly, Accenture, Bain Consulting etc.
Practice : Organizations follow practices based on their past learning
Experience: Based on changing context, they face fresh experiences
Perspective: Organization learns from the experience and the practice to gain fresh perspective
These notes connect the three dimensions of the real world to key concepts in the subject. Each note is
brief – about one to two pages and is adapted from the article referred to in the note. The concept
underlying the note is highlighted in a box. The concept is also connected to the article through an
introductory abstract in a boxat the beginning.
The learning outcomes expected are:
1. Real world Application based approach significantly enhances absorption and retention.
2. Exposure to the current trends,practices with illustrations connect back to theory.
3. Thoughts from leading sources.
The PEP Notes may be used for Assessment.
iii

CONTENTS
Block 1: Understanding Marketing Management and Buyer Behaviour 6
1. Customer Orientation: The Soul of Amazon 7
2. Email Dominated Online Customer Acquisition 8
3. Airlines Industry: "British Airways’ Way" 9
4. Amazon’s Business Process Innovation 10
5. Tilting of Marketing Locus: Product to Customer 11
6. Social Media as Catalyst for Change Management 13
7. Business Scenario in Emerging Markets 14
8. Men Were Impulsive to Buy Apparel: Ads have little impact 15
9. Affluent Luxury Buyers’ Extensive Problem Solving Behavior 16
10. Consumer Buying Decision Journey on Social Media 17
11. Customers are Impatient: Focus on Customer Journey in Totalilty 18
Block 2: Market Analysis and Marketing Strategies 19
12. Healthcare Emergency Room Design: Ethnography Research 20
13. Four Faces of Diaspora: What is viable for Global Brand? 21
14. Catch Superconsumers: Who Give Life to Dying Brands 23
15. Do You Know, Who is Your Right Customer? 24
16. Summarizing Strategy Statement in 15-Words: Acid Test for Success 26
17. Customer Participation: The Apple Way 27
18. Strategy is Making Choice Under Uncertainty 28
19. Business is Not War or Sport: Strategy is about Customers, not Competitors 29
20. Is Core Competence ‘Core’ of the Business? 31
21. Nike’s FuelBand: Anyone Who Has a Body Really is an Athlete 32
Block 3: The Marketing Mix - I 33
22. Bundling Strategy is the Best for IT Companies 34
23. Dimensionality of Corporate Logo 35
24. Reebok: New Avatar in India 37
25. Innovation in Patient-Centered Medical Devices: Israel’s Leadership 38
26. Panchsheel(5-ways) for Consistent Innovation 39
27. New Product Development through Design Thinking 41
28. Leveraging Social Media for Product Development 43
29. Humanize Brands for Better Brand Equity 44
30. Deeper Emotions Do Matter in Branding 45
31. Treat Different Customers Differently: Delta’s Customer Centricity Strategy 47
iv

Block 4: The Marketing Mix - II 48
32. Lifestyle Diseases:Over- the- Counter (OTC) Opportunity 49
33. Retail Industry Growth 51
34. Retail strategy Mix of Indian Retailing 52
35. Leverage Indian Retail Through Better Market Decisions 54
36. Global Trends in Retailing 56
37. The Landscape of Indian Organized Retail 58
38. Sustainable Consumption: Communication Strategies 60
39. Good Cartoon, Pithy Caption, and Creative Art: Levers for Customer Engagement 61
40. Mahindra and Mahindra’s Tractors: Customer Engagement Strategies 62
41. The Science of Persuasion: Six Basic Laws 63
42. Sales Linguistics for Persuasive Presentation 65
43. The Process of Developing an Effective Presentation 67
44. Triple Sales Talent Strategies of Leading Companies 69
45. Talent Management Lifecycle: Strategic Enablers of Sales Force 71
Block 5: Additional Topics in Marketing Management 73
46. The Future of Medical Tourism: Is Healthcare Shopping in Reverse? 74
47. The Tata Group in Aviation Market: Two Distinct Joint Venture Strategies 76
48. Changing Social Media Trends 77
49. Vine for Compressed Brand Story 78
50. Unleash Social Media in Four Steps 79
51. Triple Capabilities for Rich Social Media Space 80
52. Mobile: First Moments-of-Truth for Branding 82
53. Loyalty Sinks as Customer Data Grows: Personalize in Impersonal Age 83
54. Starbucks is 10 times more Popular than Coffee on Social Media 84
55. Bazaar Experience in E-Commerce 85
56. McDonald’s Business Model in India: Localized Paradigm 87
57. Drivers of Patient Satisfaction: Four Dimensions 89
58. Indian Affordable and World-Class Health Care Models 91
59. Patient-Centered Health Care Practices for Better Treatment 93
60. Private to Sponsored Story on Facebook: User’s Privacy at Threat 94
v

Block 1:
Understanding Marketing Management and Buyer
Behaviour
1. Customer Orientation: The Soul ofAmazon
2. Email Dominated Online Customer Acquisition
3. Airlines Industry: “British Airways’ Way”
4. Amazon’s BusinessProcess Innovation
5. Tilting of Marketing Locus: Product to Customer
6. Social Media as Catalyst for Change Management
7. Business Scenario in Emerging Markets
8. Men Were Impulsive to Buy Apparel: Ads have little impact
9. Affluent Luxury Buyers’ Extensive Problem Solving Behavior
10. Consumer Buying Decision Journey on Social Media
11. Customers are Impatient: Focus on Customer Journey in Totalilty
6

1. Customer Orientation: The Soul of Amazon
‘Customer orientation’ was making Amazon ‘the everything store’.
Amazon became the ‘everything store’ by focusing on custome r orientation and responding inno vatively
to create and serve the market. Amazon treated customers as the soul through the following steps:
Amazon founder, Jeff Bezos connected to the customers directly with his public e-mail ID
jeff@amazon.com just to listen to the customer voice. He forwarded the customer mail to the
concerned employee with a question mark to demand the response in a few hours.
Customer response was considered as an audit on internal processes.Every bit of customer
feedback was treated as precious source of business intelligence.
Every decision was measured against metrics whether the new process rooted out inefficiency or
not while serving customer.
Amazon became the ‘Everything Store’ with $75 billion annu al revenue and $140 billion
market value to serve all types of customers.
Bezos simplified the message. He took a red pen to press releases,product descriptions,
speeches and struckoff unnecessary stufffor easy customer comprehension
Bezos’s dream venture, ‘Blue Origin’, rocket ship Company, offe red space travel to widest
target customers at affordable cost.
Amazon had a clandestine group which focused on purchasing large volume of goods from
competitors to measure quality and speed of service to betterserve customers.
Amazon followed 14 leadership principles: customer obsession; ownership; invent and simplify;
are right, a lot (leaders are right a lot); hire and develop the best; insist on the highest standards;
think big; bias for action; frugality; vocally self-critical; earn trust of others; dive deep; have
backbone, disagree and commit; deliver results
Employees filed patents and there was a fierce competitiveness in what they could do to provide
better customer value
Amazon had been nurtured by Bezos for over 20 years despite low profit margins and s evere
competition.
‘Customer orientation’ is defined as an approach to sales and customer-relations in which staff
focused on helping customers to meet their long-term needs and wants. Firms constantly needed to
change and modify their products, to satisfy the varying needs and preferences of the customer.
Discussion Questions
1. Discuss how Amazon was customer-oriented?
(Hints: direct customer interaction-importance to customer audit)
2. What was the significance of customer-orientation to an organization?
(Hints: fulfilled customer’s long-term needs –allowed product modific ation)
Source: Brad Stone, “The Secrets of Bezos: How Amazon Became the Everyt hing Store,” Bloomberg Business
Week, Oct 10, 2013
Topic Course
Customer Orientation: The development of a concept: Unit 1.4 Marketing Management
7

PEP Notes: Marketing Management
2. Email Dominated Online CustomerAcquisition
Marketershad to respond in a meaningful way based on ‘customer database’
while providing customized service.
Mckinsey’s iConsumer survey 2012 revealed that email was 40 times more effective than Facebook and
Twitter combined; when it came to customer acquisition. It was three times more effective than all the
social media combined. And what was more; the order value was 17% higher.
This was despite a 20% decrease in email usage between 2008 and 2012.
Three steps that could make email more effective:
1. Focus on the journey, not the click:The users’journeyafterthe clickwas important.
Customized landing pagesincreased the probability ofconversion by 25%.
45% of emails were viewed on mobile phones.Landing pages should be optimized for mobile
phones in order to reduce difficulties in accessibility. 61% with accessibility problems never
returned and 40% would drift to other competitors..
2. Share the lessons: Each campaign should be used to learn more about the customers.. For each
campaign, learning objectives should be specified and the data should be collected, discussed and
shared, periodically.
3. Get personal: The sale site should be made more prominent. Gilt Groupe sent 3000 PLUS variations
of its daily mail customized on a click using browsing and purchase history. The company’s
capabilities and infrastructure needed development in order to introduce such personalized measures.
Conversions could multiply. A CRM package with rich customer database may send the right
message to the right customer at the right time.
‘Customer database’ was used by companies to generate personalized communications in order to
promote a product or service for marketing purposes. Companies used data warehousing to create a
database of their customers. Companies based their strategies and developed their products, in tune
with the requirements of the customers.
1. Discuss the importance of customer database for organizations.
(Hints: personalized communication-strategies to meet customer’s requirements)
2. What measures could be taken to increase the effectiveness of emails?
(Hints: focus on journey- learn about the customers-share lessons)
Source: Nora Aufreiter, Julien Boudet and Vivian Weng, “Why M arketers Should Keep Sending you E-
mails,” http://www.mckinsey.com/insights/marketing_sales/why_marketers_should_keep_sending_you_emails, January 2014
Topics Covered Course
Customer database:The development of a concept : unit 1.5 Marketing Management
8

Block 1: Understanding Marketing Management and Buyer Behaviour
3. Airlines Industry: “British Airways’ Way”
‘Airlines industry’ playersdeveloped marketing strategies to build long-term
relationship with customers.
The competition in the airlines industry forced players to attract customers with their marketing
strategies. British Airways adopted an innovative strategy for building customer relationships. It
connected passengers with business and pleasure opportunities around the world. It wanted its passengers
to exploit business and pleasure opportunities upwelling across the world. It developed sustainable
business relationships for their growth and pleasure. It persuaded passengers through a TVad campaign.
This campaign consisted of 9 TV spots which highlighted the global business events being conducted
across the globe such as Lakme Fashion Week in Mumbai, India, Canton Fair in Guangzhou, China,
Carnival in Venice, and the Las Vegas Rodeo in Las Vegas etc.
The marketing communications through TV ads were designed to show the multiple opportunities that
existed around the world. Out of the 9 TV spots, 8 targeted UK passengers and 1 targeted the US market.
The first TV spot highlighted the launch of the Lakme Fashion Week in Mumbai, India. It portrayed the
possibilities one could exploit by visiting India during the Fashion Week. A voiceover in the ad said,
“right now somewhere in the world is a great business o pportunity. And no one can fly you to Oregon
direct from the UK than British Airways”. Other TV spot s highlighted other events that were taking
place at several destinations across the globe.
The integrated marketing communications were designed to steer people to the company’s website which
was updated with content. It also advised consumers to leverage the opportunity available both for
business and for pleasure across the world. The campaign included print, cinema and radio commercials
but avoided outdoor promotions which did not allow for frequent updates and alterations. British
Airways had developed a customer recognition program ‘Know Me’ to collect data of customer
experience and translate it into a meaningful service. The customer data so collected enabled crew
members to greet important passengers and to personalize their service in the next trip. The purpose was
to recreate the feeling of recognition one received in a restaurant while one is welcomed.
‘Airline industry’ was defined as the industry that dealt with the design, manufacture, use, or
operation of aircraft(s). Intense competition forced players to adopt unique marketing strategies to
attract customers. British Airways used a 9 spot TV ad campaign highlighting global business events
to lure customers.
1. Discuss the characteristics of the airline industry.
(Hints: fiercely competitive- airline companies were required to design unique marketing and
promotional strategies)
2. What strategies did British Airways adopt to attract customers?
(Hints: focused on building sustained customerrelationships-used television ad campaigns to attract
customers by showcasing the numerous travel opportunities)
Sources: (i) Faheem H, Yadav N and Purkayastha , “British Airways’ Adver tising Campaign in the UK,” IBS
Center for Management Research, www.icmrindia.org, 2009
(ii) “British Airways Launches Customer Recognition Program,” h ttp://enterpriseinnovation.net/article/british-
airways-launches-customer-recognition-program, October 30, (2012)
Topics Covered Course
Airlines Industry: The development of a concept:Unit 1.6 Marketing Management
9

4. Amazon’s Business ProcessInnovation
‘Business process innovation’ radically altered the older paradigms,
principlesand conventionsto create and deliver better customer value.
Amazon was a consistent business process innovator because it questioned its existing processes. It
believed that today’s strength could become tomorrow’s weakn ess. Amazon wanted to attack growth -
induced stagnation and irrelevance of existing business processes with the axe of innovation. Many
companies rely solely on the founder’s wisdom but innovator s like Amazon did not fixate themselves on
the icons of yesterday. Amazon questioned and broke its existing processes to allow fresh breath into
new processes as follows:
2013:Developed Fulfilment Capabilities: Sunday Package Delivery
Model Increased number ofwarehouses with 50 new warehouse facilities
Business process: This brought the US population in the ‘same day delivery’
catchmen area
2006: Fulfilment by Amazon Model
Independent sellers could use Amazon’s warehouses to fill orders and logistic
support Business process: Amazon became a distributor for independent sellers
What was outsourced in 1995 became the core proposition
2000:Sell All, Carry More Model
Expanded the warehouses to more than 10 and stocked more because catchment
area got expanded beyond dealers
Business process: Excellent delivery performance and efficient logistics
1995:Sell All, Carry Few Model
Offering more than a million books but stocked only 2,000
Amazon forwarded customer orders to book wholesalers/publishers who ship the products
with Amazon’s packaging material and labels
Business process: Effective dealer relationship
The manner in which the flow of work occurred is called ‘ process’ . Amazon consistently assessed
and questioned its existing processes. To avoid growth-induced stagnation, the company worked on
ways and means to constantly innovate it processes.
1. Discuss Amazon’s strategy of business process innovation .
(Hints: did away with irrelevant processes-questioned existing methods)
2. Discuss the importance of business process innovation to organizations.
(Hints: business growth-avoids stagnations-improved existing processes)
Source: Karan Girotra and Serguei Netessine, “Amazon Constantly Audits Its Business Model,” HBR Blog
Network, November 15, 2013
Topic Course
Process: Delivering customer values and satisfaction: Unit 2.3 Marketing Management
10

5. Tilting of Marketing Locus:Product to Customer
Customer-related activities were more strategic than product-related
activities in ‘ value chain’.
The locus of competitive advantage had moved from upstream activities to downstream activities.
Upstream activities were product-related such as sourcing, production, logistics and product-related
innovation. Downstream activities were customer-related such as shaping customer perception, reducing
customer costs and customer networking.
“What else could we do for our customer?” had become the core of marketing strategy.Less
successfulcompanies were focusing more on “what else could we make and sell?
Customers and the market –not the product and factory—hadbecome the core of marketing
strategy
The shift in ‘marketing thinking’ questioned the assumptions of traditional marketing strategy as follows:
 Does the competitive advantage lie within the firm? If a company considered that its
competitive advantage lay in its production processes or R&D, then the company restricted
plant visits and increased security around research labs.

Successful companies’ competitive advantage lay outside of the firm i.e. in customer networks,
channel members and complementors. The advantage was embedded in customer relationships,
market knowledge and customer behavior.

For e.g, Coca Cola raised finance easily to start afresh despite having lost its tangible, physical
assets. This would be possible because of the strong customer knowledge and immense market
knowledge that the company enjoyed.

 Is listening to customers enough? Companies were finding success not by listening to
customers but by defining and shaping customer’s criteria of purchase. For e.g. Zara, the fast-
fashion retailer kept only small number of products on the shelf for less time to define the
fashion and shape of customer expectations

 Does competitive advantage get diluted over time? Traditional thinking believed that as rivals
increased, competitive advantage erodes. In successful companies, the advantage grew with
time and the number of customers i.e. competitive advantage actually accumulated with time
and the customers. For e.g. Facebook with its 1 billion accounts represented the most valuable
networking effect, which is accumulative over time

 Can we make a choice of competitors? Traditional thinking stated that companies were stuck
with the existing competitors or needed to emerge independently. One could choose competitors
if companies focused on downstream activities. Three critical decisions decided your
competitors such as positioning, placing yourself within the distribution channel and pricing.
For e.g. Brita filters had different set of competitors when they were placed in the kitchen
appliances section at big-box stores. When Bitra filters were placed in the bottled-water aisle at
super market, the comparison set and consumer decision got replaced.

 Is Innovation just for products or technology? Successful firms fought not for superior
products but for uniqueness. For e.g. Volvo did not fight with BMW on making a better car.
Volvo’s USP (Unique Selling Proposition) was safety whereas BMW’s USP was excitement.
They focused on different target groups because customer’s criteria of purchase was different
for different products.

 What are possible innovative areas? Innovation was not just about products or better
technology. Companies could serve better by reducing customer costs and risks over purchase,
consumption and disposal cycle.
11

For e.g. during the recession of 2008-09, consumers delayed purchases due to fluctuations in the
job market. Many automobile companies offered price reduction. Hyundai, on the other hand,
focused on customer risk-reducing guarantee and said, “If you lose your job within a year of
purchasing a car, you can return it with no penalty to your credit rating”. The Hyundai assurance
doubled sales whereas industry sales declined by 37%.It did not focus on making better cars but
it innovated by selling cars better.
 Is the innovation always in R&D Lab only? Product innovation or technological innovations
might not provide competitive advantage because customers need not accept product
innovation. For e.g. Gillette owned the customers’ criterion and trust. Additional blade (4 or 5)
became credible only when Gillette said so. Technological developments could not decide the
success as the marketing power could.
The locus of competitive advantage resided in the market place rather than within a company or product.
Downstream activities which reduced customer costs and risks provided true differentiation. The
downstream had its own rules and hence marketers should uncover and set new rules to lead the market
into the future.
‘Value-chain analysis’ looked at every step as business goes through, from raw materials to the
eventual end-user. The goal was to deliver maximumvalue at the least possible total cost. The concept
was first described and popularized by Michael Porter in 1985.
1. Discuss the shift in marketing locus from the upstreamactivities to downstream activities.
(Hints: focus shifted to customer-centric activities-the customer and market became the focus point)
2. What were the salient features of the new marketing thinking?
(Hints: identify the competitive advantage-was the competitive advantage getting diluted over time)
Source: NirajDavar, “When Marketing is Strategy,” Harvard Business R eview, December 2013
Topics Course
Value chain: Delivering customer values and satisfaction: Unit 2.5 Marketing Management
12

6. SocialMedia as Catalystfor Change Management
Social media could be used for ‘internal marketing’ to change employee behaviour.
Successfulcompanies used social media technologies to influence employees and to change the
organizational culture. Accenture suggested sixsteps to accelerate and manage change.
1. Building collaborative culture: Real time sharing of experiences fostered innovation through blogs,
presence on Facebook, Yammer, Twitter, etc. USTRANSCOM launched executive blogs, Q&A blog
on company Intranet and public account on Facebook and Twitter in order to flatten organizational
hierarchy and to drive cultural shift
2. Establish two-way communication: Participation of management in social media for addressing
pain points. One global resource company posted 2,000 messages on yammer every month
3. Workforce engagement in learning experiences: This involved enabling employees to deliver
personalized learning experiences. Live web meetings and tele-presence united diverse teams for a
common learning experience.
4. Forming knowledge networks: It helped locate people, content and expertise, and centralized and
shared knowledge on Twitter, Yammer and Facebook. North American bank formed 400
communities, 100 personal blogs, and 5000 users within two months.
5. Employee ownership: Continuous feedback enhanced internal loyalty and ownership of change
initiatives. US bank leveraged crowd sourcing to tap workforce ideas for better customer service.
6. Continuous monitoring of change program: Social media tools provided timely information about
acceptance of change.
‘Internal marketing’ was the process of motivating and empowering the employees of a company to
work as a team for the overall wellbeing of the customers and thereby for the company itself.
Accenture suggested steps like creating two-way communication and building collaborative work
culture to help manage and accelerate change.
1. Discuss the steps recommended by Accenture to accelerate change.
(Hints: collaborative culture-knowledge networks)
2. How did social media serve as an internal marketing tool for organizations?
(Hints: change organizational culture-influence employees)
Source: Mohsin Ghafoor, Trinity Martin and Elizabeth S. Choo, “Six Ways Soc ial Media Technologies Can
Accelerate Large-Scale Change,” Accenture, Outlook Point of Vie w, January 2012, No.1
Topic Course
Internal Marketing : Delivering customer values and Marketing Management
satisfaction: Unit: 2.8
13

7. Business Scenario in Emerging Markets
Marketing leadershad to monitor ‘competitive forces’ in emerging business
environment to exploit opportunities.
The number of Fortune Global 500 companies from the emerging world would escalate to more than
45% by 2025, up from just 5% in 2000, according to McKinsey Global Institute (MGI). Nearly 230
Fortune Global companies would be located in the emerging world cities by 2025, up from 24 in 2000.
The fastest growing urban cities would have millions of rich consumers with the highest growth rate,
who would buy products fromglobal corporations whereas the developed world faced slower growth rate
due to ageing.
Nearly 7000 new companies would cross their annual revenue of $1 billion in a decade and 70% of them
would most likely represent the emerging economies. The rate at which new comers would overcome
industry leaders would probably go up.
The Features of Emerging Companies in Emerging Markets:
Emerging companies disrupted the entire industry landscape by offering superior products at
cheaper price, by reaching customers faster, by innovative business processes,etc.
Emerging companies were more agile and were prepared to invest for long-termbenefits Emerging companies focused on
expanding into global marketsMarketingleadershadtomonitoremergingbusinessenvironmenttoexploit opportunities:
The broader customer base encouraged companies to rethink their sales network
Emergence of new cities where new industry hotspots became the busiest business centres.For
example, Hsinchu in Taiwan was a hub for many billion-dollar companies of the electronic
industry
Companies were opening multiple corporate centres in multiple locations. For example, GE had
multiple locations for decision making, R&D, services, etc.
The leading cities would hold disproportionate share of company growth in the near future. For
example, Sao Palo may triple the large companies’ base by 2025.
280 of emerging cities would host a large company for the first time and become new hubs for
global industry network
Singapore had become a better choice of location for multinationals
Cities with the high quality life such as Prague, Sydney, and Toronto attracted more foreign operations of
MNCs.EmergingOpportunities:
‘Competitive forces’ influence the competitive position of a company in an industry or market.
Changes in demographic environment worldwide have led to increase in competition from emerging
markets and new players targeting emerging markets.
1. Why was it important for managers to constantly monitor the competitive environment?
(Hints: competition could disrupt market landscape- greater agility of the competitors)
2. What opportunities did the growing competitiveness offer?
(Hints: wider customer base-Corporate centres in multiple locations)
Source: Richard Dobbs and others, “Urban World: The Shifting Global Business Lands cape,” McKinsey Global
Institute, Oct 2013
Topics Course
Competitive forces : Marketing environment :Unit 3.3 Marketing Management
14

8. Men Were Impulsive to Buy Apparel: Ads have Little Impact
Customer buying behaviorwas influenced by ‘psychological factors’ such as impulses at the time of
actual purchase.
75% of Indian men were influenced through visual merchandising while buying clothes in a store rather
than by ads, according to Nielsen. Only 25% of customers were influenced by ads and preferred a
particular brand.
59% of men were impulse buyers who made a purchase decision within the store.
41% of men planned to buy apparel in advance but only 25% customers stuck to their preferred
brand in the store.
That meant, 75% of planned customers went impulsive within the store by visual
merchandising.
According to Nielsen, working Indian men easily switched within a repertoire of brands without
any loyalty. Ads could only influence men to find a place in their repertoire of 5-7 brands if it
matched with their expectations.
Men were influenced more by with-in-shop tactics at the time of actual purchase i.e. making
choice amongst the repertoire of brands
Brands had to ensure that they influenced and stayed in the repertoire of the shopper
Since apparel was largely an undifferentiated category, men were influenced more by visibility
within the store. Visibility could also be brought about by advertising.
Ad had to be creative enough to create differentiation in the undifferentiated apparel category.
The ‘ psychological factors’ that influence a consumer’s buying behaviour include motivation,
perception, learning, personality, attitude, etc. Indian men were greatly guided by these psychological
factors in their apparel purchase decisions. Marketers could use this in order to develop a suitable
marketing mix and to appeal to the target customer.
1. Discuss the psychological factors influencing the apparel buying decision of Indian men.
(Hints: visual merchandising –impulse purchase decisions-)
2. How could focusing on the psychologicalbuying factors of customers benefit a company?
(Hints: create a suitable marketing mix-appeal to the target customer)
Source: Sayantani Kar, “Men Shop for Apparel Brands Impulsively, Ads I neffective,” Business Standard, Sep 26,
2013
Topic Course
Psychological factors: Understanding consumer buying Marketing Management
behaviour : Unit 5.3
15

9. Affluent Luxury Buyers’ Extensive Problem Solving Behavior
Consumers displayed ‘extensive problem solving behavior’ while purchasing luxurious brands.
In 2013, a research study by ‘Google and Ipsos’ on information sea rch behavior by buyers’ of luxury
products (extensive problem solving) across three markets-new (Brazil, China and Russia), matured
(France, UK, US and Italy) and Japan, revealed the following:
In all the three markets, 9 out of 10 luxury buyers undertook information search before making a
purchase
On an average, luxury buyers spent $2500 on their last luxury purchase in all three markets
Online information search was more popular in new luxury markets such as Brazil and China
than in matured markets such as France, the US, and Germany
The average age of customers was 37 in the new market, 46 in the matured market and 49 in the
Japanese markets
In all the three markets, half of the information sources used by affluent buyers were online
sources
The popular offline information sources included talking to others,seeing and trying the product
in-store or at an event
The other popular offline sources included reading or hearing the information about the product
in the media
Reasons for online purchase:Convenience (53%), anywhere-anytime i.e. 24/7 (49%), good
deals (48%)
Barriers of online shopping:Preferred to see and touch (65%) the product,risk of counterfeit
(35%)
Preferred online ad format for luxury goods:Video and full-screen ads
Buyers daily media habits: The internet was the affluent buyer’s constant media companion in
all three markets
Buyers displayed ‘extensive problem solving behavior’ while purchasing an expensive product. The
buyer developed a belief about the product and his attitude regarding the purchase decision was based
upon this belief. Marketers should focus on how to align their campaigns and communication to get
the best out of the information search..
1. Discuss the factors that guided the information search behaviour across the new and matured
markets.
(Hints: information search-half the information sources were online sources)
2. How were customers guided by their problem solving behaviour while making affluent purchases?
(Hints: developed a belief about product-purchase attitude guided by product belief)
Source: “How Do Affluent Luxury Buyers Research Their Purchases,”
http://www.marketingcharts.com/television/how-do-affluent-luxury-buyers-research-their-purchases-36684/,
September 17, 2013
Topic Course
Extensive problem solving behavior: Understanding consumer buying Marketing Management
behavior: Unit 5.4
16

10. Consumer Buying DecisionJourney on SocialMedia
McKinsey proposed a framework to adopt ‘consumer buying behavior’ .
The consumer buying behavior process, in general, is mysterious and their purchasing behavior was more
enigmatic on social media. Only few had an understanding of exactly how social media interacted with
customers to expand product and brand recognition, drive sales and profitability and engender loyalty.
McKinsey researchers developed a framework to script the consumer buying process on social media
with six stages: Consider- Evaluate- Buy- Experience- Advocate- Bond (Refer to Chart 1 for the six
stages).
Chart 1: Six Stages of Consumer Buying Behavior on Social Media
2. Evaluated
6.Bonded
1. Considered 3. Bought
5. Advocated 4.
Experienced
Source: Adapted by the Author from Roxane Divol, David Edelman and Hugo Sarrazin, “Demystifying Social
Media,” McKinsey Quarterly, April 2012
Stage 1: Considered: Saw the brand on the site and were impressed by the reviews
Stage 2: Evaluated: Watched video(s)posted online which displayed product features and uses
Stage 3: Bought: The product was purchased and comments were posted
Stage 4: Experienced: Interacted with the brand and followed it on Twitter to receive product updates
Stage 5: Advocated: Commented on the representative’s helpful advice and liked the same on the
Facebook page
Stage 6: Bonded: Recommends to friend(s), after revisiting the store to re-buy
The purchase decisions made by customers reflected their ‘ buying behavior’. Understanding
consumer’s buying behaviour was essential for marketers to offer products that appealed to the
customer. It would also help them introduce new products or modify existing products to meet the
customer’s changing expectations.
1. What stages were scripted by Mckinsey w.r.t. consumer’s buying behaviour on social media?
(Hints: consider-evaluate-buy)
2. Why was it important for organizations to understand consumer’s buying behaviour?
(Hints: to cater to customer’s expectations-modify existing product offering)
Source: Roxane Divol, David Edelman and Hugo Sarrazin, “Demystifying Social M edia,” McKinsey Quarterly,
April 2012
Topic Course
Consumer buying behavior: Understanding consumer Marketing Management
buying behavior Unit:5.5
17

11. Customers are Impatient:
Focus on Customer Journey in Totalilty
Companies enhanced customer satisfaction by enriching all the stages of the
‘ buying decisionprocess’ as a whole.
According to McKinsey & Company, “Measuring customer satis faction on customer journey is 30%
more predictive of overall customer satisfaction than measuring happiness for each individual
interaction”. Customer’s individual interactions were bec oming less significant when compared with
cumulative experience of customer journey. Maximizing satisfaction with customer journey enhanced
revenue by 15%, reduced cost of service by 20% and increased customer satisfaction by 20%.
Companies had to focus on customer journey in totality to sustain customer satisfaction. To sustain
customer satisfaction, companies had to ensure three consistencies as follows:
Consistency of service at multi touch customer journey: Companies had to provide superior
service at multi touch customer journeys.For example, Banks had shown positive correlation
between consistency on key customer journeys and overall performance in customer experience.
Banks which showed poorperformance were not consistent in service across its own branches.
Consistency of customer’s emotional experience : Consistency in positive customer-
experience emotions had enhanced customer loyalty and developed trusted relationship with
customers. Customers differentiated a bank based on their emotional experience in terms of ‘a
brand they felt close to’ or ‘a brand they could trust’. F or example, customers trusted banks that
delivered positive customer-experience 30% more than banks that were not consistent on
positive customer-experience.
Consistency of customer communication: Companies had not only to deliver the promise but
also to see that customers recognized the delivery of promise through consistent
communication. For example, Southwest Airlines, enhanced customer trust by consistently
delivering its promise as a no-frills, low-cost airline. The communication highlighted delivery
and attributes.
Companies could enhance customer loyalty by making customer-journey an excellent experience.
‘Buying decision process’ was the process a customer underwent when purchasing a pr oduct.
Organizations could benefit greatly by focusing on the purchase journey as a whole. McKinsey’s
research highlights the three consistencies needed across the journey.
1. Discuss the importance of focussing on the cumulative experience of a customer’s
journey. (Hints: greater customer satisfaction-enhanced revenues-reduced costs)
2. What role did the three ‘consistencies’play in influenci ng a customer’s buying decision?
(Hints: influence of customer loyalty-helps in creating brand differentiation)
Source: Alfonso Pulido, Dorian Stone, and John Strevel, “The three Cs of Customer Satisfaction: Consistence,
Consistency, Consistency,”
http://www.mckinsey.com/insights/consumer_and_retail/the_three_cs_of_customer_satisfaction_consistency_consist
ency_consistency, March 2014
Topic Course
Buying decision process: Understanding consumer buying Marketing Management
behavior :Unit 5.5
18

Block 2:
Market Analysis and Marketing Strategies
12. Healthcare Emergency Room Design: Ethnography Research
13. Four Faces ofDiaspora: What is viable for Global Brand?
14. Catch Superconsumers:Who Give Life to Dying Brands
15. Do You Know, Who is Your Right Customer?
16. Summarizing Strategy Statement in 15-Words: Acid Test for Success
17. Customer Participation: The Apple Way
18. Strategy is Making Choice Under Uncertainty
19. Business is Not War or Sport: Strategy is about Customers, not Competitors
20. Is Core Competence ‘Core’ ofthe Business?
21. Nike’s FuelBand: Anyone Who Has a Body Really is an Athlete
19

12. Healthcare EmergencyRoomDesign:Ethnography Research
Ethnographic research could enhance ‘marketing decisionsupport system’ in healthcare.
Ethnography refers to a study of customers in their real time setting in order to elicit customer pain
points. Corporate ethnography helped companies to design products that could solve customer problems.
For instance, one major health-care provider used ethnography research to redesign its health-care
delivery with a patient-centred approach. The ethnographic study also revealed the various layers of
emotions that were associated with the delivery of health care.
The hospital used the ethnographic research approach to understand the experiences of patients admitted
into the emergency room. The ethnographic team filmed a video to better understand the experiences of
the emergency room as seen by a patient lying on a stretcher. The team captured anxieties of patients
such as long periods of silence, loneliness, unsettling nature, etc. That insight helped the hospital to
redesign health care to provide timely information to patients so that they understood what was
happening to them. The hospital also redesigned its emergency-roomby installing screens that displayed
waiting time information and focused on better communication between patients and the medical team.
Focusing on the following five principles could make ethnographic research a useful method for
organizations:
1. Recruiting on the fringe: A wider and diverse set of participants must be included while conducting
ethnographic research as it would increase the likelihood of making interesting discoveries.
2. Use a long(itudinal) approach: Using a method like diary study would require the participant to self-
report his/her experience with a product or service over a certain time period.
3. Recreating ‘use-case’ scenarios: This would involve conductin g interviews at the participant’s
office or home. It would present a complete picture of what actually goes on in the participant’s
environment.
4. Including stakeholder debriefs: Interacting with a stakeholder who was a part of the interview, after
its completion could offer deeperinsights to organizations.
5. Look out for surprises:Special notes and observations made during the interactions could help
organizations analyze and report the data collected in an innovative manner.
Identified unmet userneeds
Tested market demand for products that did not currently exist Provideda holistic
viewif a problemEthnographicresearchofferedthefollowing advantages:
However, ethnographic research suffers from cost and time challenges for an organization. It is also
perceived as a method that may not lead to actionable insights.
‘Marketing decision support system’ involved collecting and processing data with the help of
technology, advanced statistical tools, etc. to obtain a scientific solution to marketing problems. A
leading health-care provider relied on ethnographic research to understand its patient’s experiences.
This helped it to re-design its health-care delivery method to focus more on its patients.
1. How could organizations benefit from ethnography?
(Hints: helps in understanding customer’s pain points-design products to solve customer’s
problems)
2. How could ethnography be used to enhance marketing decision support systemin healthcare?
(Hints: helps to re-design health-care delivery systems-helps to create a patient-centred approach)
Sources: (i) Julien Cayla, RobinBeers and Eric Arnould, “Stories That Deliver Business Insights,” MIT SloanReview,Winter,
2014
(ii) Jessica Weber and John Cheng, “Making the Most of Ethnographic R esearch,”
http://uxmag.com/articles/making-the-most-of-ethnographic-research, August 5, 2013
Topic Course
Marketing decision support system: Marketing research, MKIS and Marketing Management
demand forecasting: Unit 7.5
20

Block 2: Market Analysis and Marketing Strategies
13. Four Faces ofDiaspora:What is viable for Global Brand?
‘Behavioral segmentation’ was one of the important dimensions for targeting the right customer.
Some companies succeed in becoming global brands by targeting a special segment of diaspora. If
emerging brands focused on other segments of diaspora, they might have failed to become global brands.
Marketers had to study diaspora behavior and its potential to launch global brands. Research indicated
that diaspora displayed four types of behavioral styles based on two dimensions: Home country identity
and Host country affiliation. Immigrant customers showed four faces and responded in four different
ways to the home brands. Marketers challenge was to target the right face of the diaspora to become a
viable global brand (Refer to Chart 1 for the four faces).
Chart 1: The Four Faces
Low Desire ---------------Home Country Identity-------------High Desire
High
ASSIMILATERS
Affiliation
Preferred host country products
Host
Culture
Did not consider products’country
of origin
Bought products for functional
performance alone
Low
Affiliation
MARGINALS
BICULTURALS
Would buy home country products
Could help dif f use products in host
country
Were sustainable as a
beachhead for global expansion
Preferred home country products
ETHNIC AFFIRMERS
Source: Adapted by the Author from Nirmalaya Kumar and Jan-Benedict E.M. Steenkamp, “The Globe: Diaspora
Marketing,” Harvard Business Review, Oct 2013
Assimilators: Referred to immigrants who did not like to retain home country customs and practices and
quickly adopted host country lifestyles. They were reluctant to buy home country products b ut were
hyperprone to buy host country brands as an affirmation of its culture. First generation Korean -
Americans preferred more of American made durable goods than US born customers and Mexican -
Americans took more American breakfast than the average U.S citizens did.
Marginals: They refer to the immigrants who are forced to leave home country due to marginalized
reasons such as poverty. They feel deprived of economic and educational opportunities in both home and
host countries. They don’t show any priority for any country while buying goods. They look for low cost,
functional and durable products.
Targeting the above two segments of diaspora may not be viable for emerging companies to
become global brands.
Ethnic Affirmers: These immigrants, displayed more attachment to home cultures than the people
residing in their homelands, as means of protecting their identity. Minorities living in host country
exhibited this behavior for self-preservation and to keep distance from host culture.
21

First-generation Mexican-Americans bought Mexican beer ‘Tecate’ which honored the blue-
collar work, which occupied 20% market share. Indian Reliance Media Works (RMW), which
operated 22 Big Cinemas in places like California, New Jersey, and New York, had set-up
Kitchens and Bombay Cafes in-side to sell ‘Samosas and mango lassi’. Big Cinemas had
become a social hot spot for Indian-American families, especially for teenagers.
Ethnic affirmers socialized more with home country people and showed little inclination to
mingle with host country people. Their behavior had very little demonstration effects on the
mainstream culture of the host country.So this segment partially helped emerging brands to
become global brands.
Biculturals: Immigrants who imbibed both home and host cultures without compromising their identity.
Based on the context they displayed the desired behavior. Most of Indian-Americans preferred Indian
food and clothes at home and showed priority for American food and dress outside.
Biculturals showed certain characteristics such as better education, bettersocioeconomic status,
high self-esteem, and high community network with locals. Their social relations with host
country people, in the form of local clubs,provided a great opportunity to influence their
behavior. ICICI used biculturals in the Indian Diaspora to expand globally.
Indian immigrants who were biculturals passed on the word-of-mouth of good services to their
host country friends. ICICI accepted non-Indian account holders in host country.In Canada,
where Indians were in greater numbers, ICICI encouraged customers using a promotional
strategy to refer host country friends. For each account opened,a reward of phone card worth of
500 free minute of calls to India was given. 9.7% of ICICI’s revenue came from foreign
operations.
In the case of ICICI, the idea of using ‘Biculturals of Indian Diaspora’ as a beachhead to enter
new markets had been viable.
‘Behavioral segmentation’ is done based on the behavior of customers toward usage of products.
Behavioral segmentation could help organizations understand diaspora to build a global brand.
1. Discuss the importance of behavioural segmentation.
(Hints:target the right customer-could help while launching global brands)
2. What challenges did marketers face from the four faces of the diaspora?
(Hints: reluctance to buy home-grown products-tendency to seeklow cost products)
Source: Nirmalaya Kumar and Jan-Benedict E.M. Steenkamp, “The Globe: Dias pora Marketing,” Harvard
Business Review, October 2013
Topic Course
Behavioral segmentation: Unit 8.5 Marketing Management
22

14. CatchSuperconsumers:Who Give Life to Dying Brands
‘Effective segmentation’ helped companies to serve the best customers in the best ways.
Super consumers are product fans, who account for only 10% of customers but contribute towards 30%-
40% of revenue and more than 50% of profits. Their brand experience was distinct from ordinary
customers. They formed friendships around shared passion for the product. They bought more but were
different from heavy users. They bought more because their usage occasions were more and different
from ordinary customers.
For example, Kraft, an American grocery manufacturing company, focused on catching the super
consumers to give a new life to its dying brand ‘Velveeta’ - pasteurized cheese food. The super
consumers were Velveeta fans who considered it as superior cheese and used it for multiple occasions
because they perceived it as a cheese that melted smoothly and easily.
Kraft made more than $100 million in sales after it focused on its super consumer strategy for Velveeta
brand. Initially, the company’s plan was to identify light and lapsed users to enhance quicker sales
growth. But the revelation in super consumer strategy was ‘they wanted to use Velveeta more and were
starving for it’.
Super consumers were different from other users of the product in the following ways.
80/20 rule: Super consumers represented 20% customers but were responsible for 80% sales
Super consumers were not only brand loyalists but also bought more if appealed to in new ways
Super consumers looked for more occasions and jobs for the product usage,where as heavy
users bought more quantity
Super consumers were very logical and had hidden appetite to buy more even among unpopular
product categories. For example, superconsumers owned eight staplers to suit the occasion,
even though their stapling requirement was not more.
Promotional efforts in terms of advertising and coupons to attract lapsed customers might not be
beneficial. It was easy to influence superconsumers through inexpensive direct and digital
marketing efforts because they were already product fans.
Super consumers offered innovative product insights because they were passionate and fans of
the product.They could also be used for testing new products.Kraft tested its new product,
blending ‘Breakstone’s sour cream with Greek yogurt,and opti mized the product with super
consumers feedback and insights. The new product ‘Breakstone’s Greek Style sour cream was
available in 60% of U.S. grocery stores with a faster adoption rate.
Super consumer strategy could become a rallying cry for old, slow growing and unattractive products.
Companies have to start loving their superconsumers if they loved their dying products.
‘Effective segmentation’ dealt with taking substantial, measureable, accessible, differentiable and
actionable characteristics to convert potential customers into real customers. Supercustomers formthe
segment which consumes the most. Understanding thembetter provides many benefits.
1. How did Kraft use ‘super consumers’ to revive its dying past eurized cheese,Velveeta?
(Hints: identified customers who considered it a superior product-identified customers who craved
for it)
2. What were the characteristics of superconsumers?
(Hints: were logical- had a hidden appetite-offered innovative product insights)
Source: Eddie Yoon, Steve Carlotti and Dennis Moore,” Make Your Best Customers Even Better,”Harvard
Business Review, March 2014
Topic Course
Effective segmentation: Market segmentation and market targeting: Marketing Management Unit
8.6
23

15. Do You Know, Who is Your Right Customer?
Companiesshould follow ‘ selective specialization’ in target
market selection to serve prime customers better.
All companies claimed that they were customer centric. But did these companies know what they meant
by ‘customer centric? Did it mean all customers were equal or everything to everyone? Did they know
who their primary customers were? Could companies become ‘customer-focused’ without identifying
any one primary customer?
Robert Simons, Harvard professor, provided a framework to identify the best primary customer for one’s
business.The framework followed four steps (Refer to Chart 1 for the four steps).
Chart 1: Four Steps to Identify Best primary Customer
Primary Customer Understand what Resources were Control Process was
was Identified Primary Customer allocated to win made interactive
Valued
Source: Adapted by the Author from Robert Simons, “Choosing the Right Custom er,” Harvard Business Review,
March 2014
1. The Primary Customer was identified: Your most important customers might not generate the
most revenue but could give you the most value in your business. To identify the primary customers
in your customers group, the following three parameters must be considered:
Perspective: It referred to the culture, mission, and folklore of your organization known
through stories,special events or leaders who left a legacy behind. For example, Wal-Mart’s
Sam Walton was known for his frugal lifestyle and Amazon was known for its delivery of
superior experience.
Capabilities: Capabilities were embedded resources built over time which were difficult for
others to duplicate. For example, Dell had an efficient low-cost supply chain management to
serve direct-to-consumer sales model.
Profit potential: The profitability of various customer types was compared and customers who
were more profitable were chosen with the help of models like Porter’s five forces analysis.
Profit potential might not be about customers who could pay premium prices. For example,
HBO targeted filmmakers as their profit potential customer group rather than targeting cable
operators to sell its content.
2. Understand What Primary Customer Valued: It involved exploring and identifying which
product attributes customer valued because he may not know what he values. The research was
conducted at multiple levels to uncover his priorities and tastes. For example, Nestle, continuously
monitored social media to track customer voice that related to product acceptance so as to target
primary customers with correct value proposition
3. Resource Allocation to Win: This called for adopting business models based on understanding
what primary customer value. Companies could adopt The following configurations:
Low price: If primary customers were interested in low price, follow the Wal-Mart model of
centralized distribution to get economies of scale
Local value creation: If customers wanted local tastes, organize like Nestle by allotting more
resources to local managers to offer customized products
Global standards of excellence: If customers liked best possible technology,organize
resources around global business units.For example, Microsoft had separate units to operate
globally for Windows, Servers, MSN, Mobile, and Xbox.
24

Dedicated service relationship: If customers liked embedded service relationships, organize
like IBM
Expert knowledge: If customers were interested in expert technical knowledge, follow Google,
where R&D was on top of product organization which received major share of resource.
4. The Control Process was made Interactive: Customer tastes and competitive environment change
continuously. Primary customers also change with the dynamic conditions. In radical situations, a
different primary customer must be selected by making company control systems interactive. For
example, Amazon’s category managers every week studied data about product assortment choices,
revenue growth, customer orders, and inventory turnover etc.
Since companies had experienced death by becoming everything to everyone,it was the time to know
who were yourprimary customers and their value proposition to last in the market for a long time.
‘Selective specialization’ referred to the process where a company selected a few market segments to
operate in instead of operating in single segments. This note explains how identifying with Primary
Customer and what he valued and delivering on the same can be an effective strategy.
1. Discuss howselective specialization could help organizations?
(Hints:catered to the needsoffewsegments-reducedrisk)
2. Discuss the steps involved in identifying a company’s primary customer.
(Hints: understand what primary customers value-making an interactive control process)
Source: Robert Simons, “Choosing the Right Customer,” Harvard Business Review, March 2014
Topic Course
Selective Specialization: Market segmentation and market targeting: Marketing Management
Unit 8.7
25

16. Summarizing StrategyStatementin 15-Words:
Acid Testfor Success
Companies could be successful if they could summarize their strategy statement in 15-words. The 15-
word constraint was an acid test that revealed the lacuna of alignment among managers. If the strategy
document was discussed in 100 pages, every manager would interpret and understand the strategy
according to his perception. The outcome: Multiple perceptions of the single strategy document.
Companies could align all managers and customers better if they crafted their strategy statement in 15-
words. Clarity was crucial for easy understanding and better communication. Clarity connected
customers and aligned employees. The exercise of 15-word strategy statement tuned everyone towards its
easy implementation.
Research stated that clarity depended on the contrast principle where one could understand something
better if it was compared with others rather than in isolation.
The Conditions for 15-word Strategy Statement: The statement should identify the right target
customer, the value proposition and how the value proposition fit the following two conditions:
Focus: What was and what was not offered to the target customer
Differentiation: How the offer was differentiated from competitors’ value proposition
For example, IKEA’s success at global level could be attributed to its clarity of strategy. IKEA, the
world’s largest furniture retailer, operated 349 stores in 43 coun tries, designed and sold ready-to-
assemble furniture, appliances and home accessories. What was unique about IKEA was that it
consciously designed its value proposition based on “Focus a nd Differentiation”.
IKEA’s Focus: Replacing the traditional warehousing atmosphere in a furniture retailer with a cheerful
sales support, innovative look, feel and assembly of furniture with amusing attributes. Traditional
retailers lacked sales support, warehousing look and had no real time experience.
IKEA’s Differentiation: Offered along with furniture other items such as house appliances, unique toys,
flat-pack houses, etc. along with day care center where customers could drop children, food, smaland
(small play ground).
IKEA was able to distinguish itself in the minds of its customer about its value proposition as comparison
to other furniture retailers.
IKEA’S Strategy Statement : To create a bettereveryday life for the majority of people
‘Strategic market planning ’ was the process of communicating and sharing data between various
departments of an organization. Ikea consciously adopted a brief strategy which laid emphasis on
‘focus’ and ‘differentiation’. This brief strategy helped the company succeed, making it the world’s
largest furniture retailer with over 349 stores in about 43 nations.
1. Discuss the importance of a brief strategy statement.
(Hints: effective strategic marketing planning-help bridge the gap between managers)
2. What measures did Ikea take to develop a brief and clear strategy?
(Hints: consciously designed a focused strategy-focus and differentiation were key areas)
Sources: Di Fiore, Alessandro, “The Art of Crafting a 15-Word Strat egy Statement”, HBR Blog Network, Feb 12,
2014
Topic Course
Strategic market planning: Strategic planning process in marketing: Marketing Management
Unit 9.3
26

17. Customer Participation:The Apple Way
Customer participation helped companies to ‘ manage the marketing effort’ effectively.
According to Sloan Management Review, customer participation could be very profitable. Companies
had shown positive growth when they emphasized on customer participation over word-of-mouth.
Customer-to-company activity created more customer ‘stickiness’ than customer-to-customer activity.
Customers who offered feedback had become the most loyal customers because they deliberately
invested their time to help the companies. They bought fromthe same company too in the future.
Customer participation helped the companies in two ways: confirming what the company already knew
and offering new ideas. Companies should not emphasize customer participation at the cost of
encouraging positive word-of-mouth. Companies should consider customer participation and word-of-
mouth as two sides of the same coin so as to build company brand equity.
For example, Apple took more rigorous and organized programs to encourage customer engagement and
participation. Apple was consciously committed to encourage customer participation through various
platforms as follows.
Customer feedback web pages: The customer feedback web pages were interface friendly, easy to
locate and to operate
Apple Supported Communities website: An online platform where customers could interact with
other customers and with the company to share opinion on Apple products.
Apple’s Express Lane advanced support website : Customers could discuss and open a dialogue
with Apple engineers so that company could fine-tune its responses
Apple Customer Pulse: Online community of selected customers who were involved in customized
surveys to elicit their views about the various subjects and issues pertaining to Apple products
Apple also gave importance to word-of-mouth along with customer participation. It monitored word-of-
mouth regularly and valued customer comments to restructure training programs for employees, initiate
service failure recovery activities, and reward employees. Apple also measured the relationship between
brand evangelists and brand equity on a continuous basis. Apple valued both customer comments and
feedback to understand the dynamics of customer participation and on word-of-mouth on purchase
behavior.
‘Managing the marketing effort’ referred to the effective implementation of the marketing program.
Organizations must continuously monitor the marketing program and take measures to correct
deviations, if any, and any other wrong steps. Apple used organized programs like customer pulse and
feedback Web pages to encourage customer participation and thereby efficiently managed its
marketing efforts.
1. Discuss the benefits of effectively managing a company’s marketing efforts.
(Hints: greater customer stickiness-increase in customer loyalty)
2. What strategies did Apple use to manage its marketing effectively?
(Hints: customer pulse-supported community websites-customer feedback page)
Source: Merlo O, Eisingerich A.B and Auh S., “Why Customer P articipation Matters,” MIT Sloan Management Review, December 19,
2013
Topic Course
Managing the marketing effort: Strategic planning process in Marketing Management
marketing :Unit 9.6
27

18. Strategyis Making Choice Under Uncertainty
‘ Strategy’ dealswith making choices under uncertainty for better customer value.
‘I skate to where the puck is going to be, not where it has been’, said Wayne Gretzky. This was true with
strategy too. Strategy was not about turning uncertainty into certainty but making deliberate choices
under uncertainty to enhance market value.
Strategy could manage uncertainty for consistent success viz. the competition if the following steps were
followed:
Make betterpossible choices today and be responsive to the dynamic outcomes whether positive or
negative tomorrow
Update the strategy based on dynamic outcome and make a decision again to enhance market value
Make decisions consistently based on dynamic outcome and monitor how the decisions were playing
out
Develop the measurement systems for both outcomes and the particular decision
Know when the company was going against desired state and make decision again in the light of
current status.For example, Infosys made a decision to make a payment of USD 34 million to the
US government to relieve the company of allegations of visa misuse.
Take immediate corrective actions based on two dimensions: Current status ofthe company and the
new signals from the outcome (Refer to Chart 1 for the two dimensions).
Chart 1: Two Dimensions of Immediate Corrective Actions
New Signal from
the Outcome
Strategy
Current Statusof
the company
Source: Adapted by the Author from Roger Martin, “Why Bother Doing Strategy?,” http://www.tcbreview.com/tcbr-
leadership/why-bother-doing-strategy.html, Summer 2013
Strategy was about consistently making and updating decisions about the uncertain future for better
market/customer value.
Firms operating in the same market segments were required to develop distinguishing ‘ strategies’ to
gain an edge over other competing firms. The note looks at how strategy can be seen as making of
choices amidst uncertainty all the while being responsive to outcomes.
DiscussionQuestions
1. Discuss the importance of strategizing.
(Hints: helps manage uncertainty-offer bettercustomer value)
2. What measures could an organization take to use strategy as an uncertainty managing technique?
(Hints: betterpossible choices today-develop measurement systems)
Source: Roger Martin, “Why Bother Doing Strategy?,” http://www.tcbrevi ew.com/tcbr-leadership/why-bother-
doing-strategy.html, Summer 2013
Topics Course
Strategy: Marketing and competitive strategies: Unit 10.5 Marketing Management
28

19. Business is Not War or Sport:
Strategy is about Customers, not Competitors
Companies have to design marketing ‘ strategies’ to attract and retain customers in the long-run.
Strategy was about a choice, whether to win competitors or customers. Strategy had two perspectives:
Zero-sum and Positive-sum. Zero-sum stated, “It is not e nough that I succeeded. Everyone else must
fail”. Positive-sum stated, “Focus on what really matt ered to create better customer value and more
market size”. The success of a company depended on whether their focus was on competitors or
customers; whether they treated business as war or as business. The different approaches of businesses
are discussed below.
Strategy of War: Zero-Sum Game Strategy of Business:Positive-Sum Game
Companies beat their rivals in ways that don’t Companies were disproportionately rewarded
meaningfully enhance customer-perceived when they created new value for customers
value. Such moves rarely grew the total and grew the market for everyone
market For example, Starbucks became a global icon in
For example, GM and Ford went to war with less than 20 years; but also created millions of
Japanese in the late 1970s and 80s without new customers and many coffee players
providing any better customer value
When strategy was about competitors, leaders New customer value expanded the pie for
lost focus on the unlimited opportunities to everyone while giving the company a bigger
grow customer value slice of the pie
For example, Steve Jobs pledged to destroy
the Android operating systemand introduced
inferior Apple’s version of Google’s Maps to
inflict harm on the competition. Customers
revolted and Apple apologized for its wrong
doing
Understand competitors’ value proposition toMaking strategy about competitors was
highly destructive improve your own value proposition
For example, Kodak lost sight of the digital For example, JetBlue systematically studied
revolution because it was at war with Fuji traditional airlines offerings and offered better
over market share value proposition such as media consoles for
every passenger, comfortable leather
upholstery with more leg room, multiple
Inherently tempted to think of business as war
health food options etc.
Companies could not succeed if they could
or sport not bring better products and total value
For example, ‘beat Coke’ if you are Pepsi, propositions to customers
‘buy Detroit’ if you are Chrysler, ‘holy war It was not about competitors, it was about
with Google’ if you are Apple customers and better value proposition.
‘Strategy’ is about making choices on what an organization would seek to achieve and how it would
deliver value. This note examines how strategy can be seen as focussing on customers and providing
value rather than as a war on competition.
29

1. Discuss the importance of designing a marketing strategy for organizations.
(Hints: helps to attract customers- customer retention in the long-run)
2. What were the different approaches of business?
(Hints: zero-sum game-positive-sum game)
Source: “ Strategy Is Not about the Competition,” S+B Blogs, April 28, 2014
Topic Course
Strategies: Marketing and competitive strategies: Unit 10.5 Marketing Management
30

20. Is Core Competence ‘Core’of the Business?
‘Differentiation’ in the eyes of customer was more important than differentiation in
the eyes of company to win in the market.
Customers did not buy core competence; they bought attributes of the product that served as the true
differentiator. Core competence was inward out but customers looked for outward in, the differentiating
attributes. Companies’ singular focus on building core competen cies was not the sure path to success.
Companies should focus on attributes that could truly distinguish it in customers’ eyes for consistent
success.
It was the customers who decided what attributes were differentiators, not the management. Customers’
choice was actually based on the offering’s attributes – not on the basis of company’s core competence.
In spite of it, companies still competed based on their core competence.
Instead, companies should focus on attributes that customers’ value and then develop core competencies
that deliver these key attributes, the salient differentiators. Many B2B companies focused on what they
did rather than focus on what customers wanted. Core competence is no more a ‘core’ competence.
For example, British Airways customer survey asked respondents to name top three reasons for their
choice of one airline over another. They rated (1) safety, (2) route, and (3) schedule.
Though, safety, route, and schedule may be the most important attributes, when all players were equal on
these key attributes, customers made purchase decisions based on some other differentiators i.e. salient
differentiators such as flyer miles, flat beds, on-time performance etc. The three attributes ‘safety, route,
and schedule’ were no more differentiators, where you could even lose business. These three attributes
were necessary but not sufficient; they were must-haves only.
Companies had to make sure they offered the ‘must haves’ right. H owever, it was the focus on the
‘salient differentiators’ that brought in the success. Of cour se, there was a possibility of turning the
‘must-haves’ into salient differentiators. For example, Boe ing’s 787 Dreamliner, turned ‘route’ into
salient differentiator for both Boeing and customers. Boeing’s 787 could travel long distances non-stop
with 20% fuel-efficiency which was a strategic advantage for both the Boeing Company and the airlines,
of course a salient feature for customer.
Core competence was necessary but not sufficient, salient differentiators were more important attributes
in the eyes of customers. Companies had to compete smarter, not harder to win customers.
‘Differentiation strategy’ refers to a marketing strategy where a firm tried to be unique along some
dimensions that were widely valued by buyers. Organizations could differentiate themselves by
selecting one or more attributes that was perceived as important by the buyers. For instance,
organizations could differentiate themselves by offering better functional design or features, product
customization, etc.
1. Why was it important for organizations to differentiate themselves?
(Hints: customers sought differentiating attributes-customers enjoyed the ultimate deciding power)
2. What strategies could companies use to differentiate themselves?
(Hints: product customization-better functional design)
Source: Roger Martin, How Do You Compete, Strategy+ Business, February 14, 2014
Topic Course
Differentiation (strategy): Marketing and competitive strategies:Unit 10.6 Marketing Management
31

21. Nike’s FuelBand:Anyone Who Has a Body Really is an Athlete
‘Differentiation strategy’ creates a distinct identity about a product in the customer’s mind.
Nike’s new product FuelBand SE, worn on the wrist, tracked fitness goals of customers such as steps
taken, stairs climbed and calories burned. The product was connected to computers and smartphone to
monitor the progress through graphs and shared the progress with others. The marketing success of
FuelBand was found in its differentiation strategy as a product for ‘everyone who has a body’. The
marketing strategies that supported the differentiation “anyo ne who had a body really was an athlete”
were as follows.
Product-focused to customer-focused market: FuelBand focused on what customers wanted
from the product. Customers did not want to use many things on their wrists. The latest version
of FuelBand incorporated watch into the product and the customer was able to see the time with
a double click.
Customer connection through social media: Customer could upload his data to the social
media such as Facebook and could interact with friends and family members who had a
FuelBand. Customers encouraged each other to fulfill their fitness goals through social media
and to keep a long record of data.
Customer data was an opportunity for market potential: Customer usage of the product
provided rich data about customer tastes, location, friends on Facebook, etc. The data could be
used to market other products such as shoes, clothes etc. Nike could link all the data together to
get a big picture of customers and customers’ friends.
Serving marketing potential with variety of products: Customer data and information helped
the company to surround the customer with the right kind of products. The data provided
customer behavior such as what type of exercises they did, their lifestyle, eating habits, where
they resided etc. This was an entry point to deal with customers in a new and different way. This
kind of customer-centricity provided a business opportunity.
For e.g. Pharma companies had to understand their customers more than just developing new drugs to
leverage the opportunity
Complete picture of the customer for quantified self: Customer data over a period provided
quantified self that portrayed complete picture of individuals. Companies could use quantified
self to develop new business models
FuelBand appealed to wide range of target groups: People including serious athletes,
weekend warriors, people who played little tennis or basket ball, gender-free, age-free etc. were
the target group for FuelBand i.e. the product was meant for anyone who had a body, who was
considered as an athlete.
Emotional focus rather than rational appeal: The positioning ‘anyone who had a body really
was an athlete’ evoked an emotional appeal among customers that they were all athletes in some
sense. Though FuelB and was technologically advanced, emotional positioning was going to be a
successfulbarrier to future entrants into this category.
Adopting a ‘ differentiation strategy’ allows companies to differentiate their products from that of
competitors. Nike used the differentiation strategy to its advantage with its new product offering,
FuelBand SE. In order to differentiate its new product offering the company introduced innovative
features like tracking fitness goals, calories burned, etc.
1. Discuss the benefits of differentiation.
(Hints: create a distinct identity-could differentiate from competitors)
2. How did Nike differentiate its new product offering, FuelBand?
(Hints: appealed to a wider target audience-emotional Focus)
Source: “NikeFuelBand: Did the Brand Score a Goal,” Knowledge@Wharton, N ovember 25, 2013
Topic Course
Differentiation Strategy: Marketing and competitive strategies:Unit 10.6 Marketing Management
32

Block 3:
The Marketing Mix - I
22. Bundling Strategy is the Best for IT Companies
23. Dimensionality ofCorporate Logo
24. Reebok: NewAvatar in India
25. Innovation in Patient-Centered Medical Devices: Israel’s Leadership
26. Panchsheel (5-ways) for Consistent Innovation
27. NewProduct Development through Design Thinking
28. Leveraging Social Media for Product Development
29. Humanize Brands for Better Brand Equity
30. Deeper Emotions Do Matter in Branding
31. Treat Different Customers Differently: Delta’s Customer Centricity Strategy
33

22. Bundling Strategyis the Bestfor IT Companies
‘Product mix’ strategy fine tunes product bundling to enhance customer value proposition.
Customer satisfaction was more when a company offered its product mix in a bundle such as combining
hardware, software and services together as a bundle, according to a study based on 36,000 IT vendors
rating. Customer satisfaction was lowest when customers bought only services independently.
The study highlighted that customers found little meaning in ‘services’ if not accompanied by
hardware and software
Apple was successfulbecause it combined hardware, software, and services in a bundle while
offering products to customers. Apple’s holistic strategy was based on diversification into related
products
Google acquired Motorola Mobility with a purpose of bundling phones,tablets and computers to
satisfy customers more
Microsoft expanded its software domain by integrating with its Surface tablet to offer as a bundle to
enhance customer base
The clients of IT firms displayed increased levels of satisfaction and higher brand loyalty for future
purchase after they bought bundles ofrelated products and services
B2B firms should enrich their portfolio to offer them as bundle to enhance customer satisfaction and
loyalty. Acquisitions,mergers and partnerships brought betterresults if products could be offered as
bundle
Company’s shift from one or small number of products to bundle of products might incur switching
cost.But long-term revenues outweighed the additional switching costs
Research advised Microsoft to get into manufacturing of hardware such as PCs so as to expand the
bundle of products.
Apple’s holistic approach to customer-oriented products could be transferred to B2B companies to
offer bundled products to enhance customer satisfaction and loyalty.
Product mix refers to the total number of product lines that a company offers to its customers.
Companies like Apple and Google adopted the strategy of offering a product mix to their customers.
While Apple bundled software, hardware and services, Google acquired Motorola Mobility to offer
customers a bundle that combined computers, tablets and phones.
1. Discuss the advantages of offering a product mix to customers.
(Hints: greater customer satisfaction-target a wider customer base-increased loyalty)
2. How did companies like Apple and Google use the ‘product mix’ s trategy to their advantage?
(Hints: diversified into related products-bundled phones,computers and tablets)
Source: Matt Palmquist, “Why the Steve Jobs ApproachPaysOff,” http: //www.strategy-
business.com/article/re00253?gko=1615d”, Sep 27, 2013
Topic Course
Product mix: Product and product lines: Unit 11.5 Marketing Management
34

Block 3: The Marketing Mix-I
23. Dimensionality of Corporate Logo
Corporate logos had multi-dimensions to influence customers and company. Successful companies
leveraged the multiple dimensions of corporate logo for customer connection and company performance.
Research proved that corporate logos could create a positive effect on customer commitment for a brand
and thereby for the company revenues. Brand logo served as:
Integrator of the marketing efforts
Reflector of what the company was meant for
Synthesizer of identification, differentiation and positive association
Brand logo identification alone may not create the desired customer brand commitment or generate the
desired revenues for the company. But, Brand logo created more customer commitment and company
revenue if it exhibited the following three important dimensions:
Symbolic benefits
Functional benefits
Sensory benefits
Symbolic Symbolic benefits connected customers and company with the brand’s core values and
Benefits principles. For example, Nike’s swoosh logo represented action, flow and energy. The
If the logo was able to create efficacious self in customers, they built a deeper relationship with the
brandstagline‘JustDoIt’motivatedcustomers for immediate action
Functional Customers developed confidence in a brand if it underscored functional benefits. For
Benefits example, Swiss Army Knives’ cross logo represented Swiss craftsmanship and problem
Customers became brand loyal if it communicatedfunctional quality and
dependability.solvingcapability. The logo communicated the multi-functionality of its brand
Sensory Customers developed positive relationships with the brand if logos were connected
Benefits with fun, warmth, pleasure and aesthetic appeal. For example, Aflac’s duck logo
created warm feelings towards the boring insurance industry. Alfac logo provided
Customers developed positive bondage with the brands if the logos were
aesthetically appealing and fun driven.
Visual logos vs. Text Logos: Few companies used only text in their logo and others used only
visuals. Research stated that visuals used as logos for corporate brands were more effective than just
text logos to develop an emotional attachment with the brand. Because,
 Symbols went beyond language barriers

 Symbols could be interpreted very easily
Brand extension: Brand logos facilitated brand extensions and provided strategic advantage.Brand
extensions with the same logo reinforced customer relationships with the new and old products.

Corporate Opportunity: Logos with visualsymbols was an untapped opportunity forbuilding
relationshipswith customers.Companies hadto putefforts to create associations throughtagline and
advertising.Logosoffered an opportunity to symbolize a brand’s essence to consumers which
facilitated top-of-mindrecall.assurancetocustomers that they were protected underduckwings.
35

‘Corporate Logo’ is a sign which represents the image of a company and could be an emblem or a
graphic picture. Corporate logos played a role in creating a certain company image in the market
especially during various promotional activities. While Nike’s swoosh logo represented action and
flow, Swiss Army Knives’ cross logo represented the Swiss craftsmenship.
1. Discuss the importance of corporate logos.
(Hints: integrator of marketing efforts-facilitates branding)
2. What message did the corporate logos of companies like Nike and Aflac convey?
(Hints: action and energy-warmth and assurance)
Source: C. Whan Park, Andreas B. Eisingeric and Gratiana Pol, “The Power of a Good Logo,” MIT Sloan Review,
Oct 22, 2013
Topic Course
Logo: Product differentiations and positioning: Unit 12.7 Marketing Management
36

24. Reebok: New Avatar in India
‘Positioning’ enters into customer mind and changes customer perspective towards a company.
After Rs 870 crore fraud and commercial irregularities, Reebok wanted to have a fresh start in a new
avatar to streamline its business in India. Reebok India appointed Eric Haskell as new MD to revive
Reebok in India. He had given a new shape to Adidas in China by expanding 7,000 stores in Greater
China with 900 in lower-tier cities. He was also instrumental in sponsoring the 2008 Olympic Games in
Beijing. He initiated the following changes to influence the customer mind (positioning) in India.
Repositioning as a premium fitness brand: Reebok wanted to leverage the rising fitness
consciousness in India by repositioning itself as a fitness brand rather than just as a sports -shoe.
Reebok incorporated all types of fitness areas such as walking, running, training, dancing,
aerobics and yoga. The pricing started from INR 3,500 and went up to INR 11,000 to convey to
the audience that Reebok was for the high-end market.
Marketing campaign around the ‘Live with Fire’ theme : The ad campaign pushed the
fitness message further with new brand ambassadors.New brand ambassadors John Abraham,
Nargis Fakhri (Fakhri), Mahendra Singh Dhoni and Gautam Gambhir were brought on board to
associate with fitness dimension. To create more fitness awareness among women, Fakhri had
been chosen as one of the brand ambassadors because this segment made up for 25% of the
market.
Innovation in Products: Reebok studio apparel came with exciting and rich colors for yoga
such as Yoga Capri, Yoga Hoodie in aqua vapor etc. Yoga Capri was a casual relaxed Capri that
offered a little extra room to move and used a bamboo fabric. The material featured ‘PlayDry’
technology which moved moisture and improved ventilation. Yoga Hoodie in aqua vapour, a
cozy and edgy pullover, was loose fitting with a cropped cut for effortless layering. It also
featured the ‘PlayDry’technology.
Exciting Retail Format: Retail store was elevated as ‘FitHub’ format which prov ided high-end
fitness merchandise and fitness consultations by experts every week. The purpose was to
transform the retail store into a fitness hub that sold fitness goods,advised,guided and provided
information related to fitness.
Marketers use ‘positioning’ to position a product favourably in the minds of the customers. Reebok
India used strategies like repositioning, product innovation and adopting a new marketing campaign in
order to revive its brand and position in the Indian market.
1. Discuss the role of positioning in influencing customers.
(Hints: influence’s their perception of the company-expand business-increase sales)
2. How did Reebok use ‘positioning strategy’to revive its busine ss in India?
(Hints: projected as a premium fitness brand-product innovation)
Source: Sounak Mitra “Reebok Takes Fresh Guard in India,” Business Standard, August 21, 2013
Topic Course
Positioning: Product differentiations and positioning: Unit 12.8 Marketing Management
37

25. Innovation in Patient-CenteredMedical
Devices:Israel’s Leadership
Companiesneed a supportive eco-system to face ‘challenges in new
product development’ on a continuous basis.
The global medical devices market was estimated at $322 billion in 2011. Medical device industry was
very young. Israel recorded more patents in medical innovation with 656 companies according to a stu dy
by Israel’s Ministry of industry, trade and labor in 2012. The Israel ecosystem has been more conducive
for innovation in medical device technology due to the following reasons:
Low -Budgeted Industry: Medical devices sectorcould be operated with a little budget.For
example, Argo Medical Technologies developed ReWalk, an exoskeleton suit that helped patients
with lower limb disabilities to walk. The investment was 1/3rd that of the competition. Clusters of
medical device companies shared resources i.e. infrastructure to minimize the cost.
Low-Manpower Industry: Israeli companies were leaner compared to the US companies. 56%
companies had only 1-5 employees and only 3% companies had 100 plus employees. For example,
NanoPass Technologies,which developed micro needle-based systems for intra-dermal delivery of
drugs and cosmetics, had only 1 employee.
Entrepreneurs were not interested in Quick Buck: Entrepreneurs of medical devices were not
hungry for quick bucks and reaped benefits in the long-run
Scaling-up is country-specific: IT products like Intel chip or Software for Google could be
marketed globally. Medical products were not suitable for every market and scaling-up depended on
the country.
Patient-centred devices: Emerging technologies were patient-centred and Israel was ahead of
others
Product development to commercialization: Israeli companies had ventured into
commercialization to reach buyers fast
Medical devices break-even quickly: Medical devices reached the market in just 2-3 years hence
the break-even was faster
Former USSR immigrants had experience in scientific field: Some of the immigrants from
former USSR had working experience in scientific labs
Strong academia and defence research: Israel ‘s strong academic and defence research provide
technological support
Government support for R&D: Israeli government was ready to support in all R&D areas
‘Challenges in new product development’ can hamper the pace and scale of innovation. These can
lead to loss of competitiveness as well as financial losses. Israel’s conducive ecosystem made it a
lucrative for innovation in medical device technology.
1. How could companies cope with the challenges in new product development?
(Hints: supportive ecosystem-technical guidance-legal support)
2. How factors made Israel’s ecosystemfavourable for innovation in medical device technology?
(Hints: low budget-government support-strong academic and defence research)
Source: “Growth Strategies of Israel’s Burgeoning Medical Device Sector,” http://knowledge.wharton.upenn.edu/
article/growth-strategies-israels-burgeoning-medical-device-sector/, April 18, 2014
Topic Course
Challenges in New Product Development : New product development: Marketing Management
Unit 13.3
38

26. Panchsheel (5-ways) for Consistent Innovation
Companieshave to ‘organize the product development
process' so as to offer new products consistently.
Companies appointed innovation teams to innovate consistently so as to sustain in the market. Innovation
teams faced two challenges, scalability and funding. Many innovations could not be scaled-up in a linear
fashion and companies hesitated to fund innovation initiatives due to uncertain results. How could
companies go for consistent innovation within the limitations of resources such as people and funds?
Booz & Company suggested five ways to overcome limitations and encourage consistent innovation to
offer new and better products (Refer to Chart 1 for the five ways).
Chart 1: Five Ways to Overcome Limitation & Encourage Consistent Innovation
Source: Adapted by the Author from Robert C. Wolcott and Jorn Bang Anderso, “ Scale Your Innovation
Initiatives,” http://www.strategy-business.com/article/00233?pg=a ll, February 11, 2014
Replicate successful models: Companies could scale-up through replication, but only successful
models could be scaled-up better. Before replicating an initiative, a model based on core principles
must be defined for clarity. Leadership and mentorship should be ensured for successfulreplication.
For example, TED Conference was replicated by launching TEDx, a licensing platform that allows
individuals and companies to access the TED brand, methodology, and global community. TED did
not interfere with TEDx events, but the TED maintained the basic standards for all TEDx licensing.
Invest in broader potential areas: Leaders could invest money to develop new capabilities for the
company to be applied in future even if they failed in their present ventures.
For example, IBM invested in emerging business opportunities’(EBO) initiative to define and build
new businesseswhich would be leveraged as IBM business units later.
Encourage evangelists: Evangelists could be insiders or outsiders of a company who were part of
innovative initiatives to promote new products.
For example, Kraft Foods started the Global Technology Council (GTC) with evangelists to identify
and invest in technologies with the potential to bring out new products within four years. The GTC
members as evangelists were selected from various product categories and geographies based on
their acumen and interest for innovation.
Nurture ecosystem: Innovation sprouts only under the right ecosystem. It requires resources,
people and organizations.
39

For example, GE selected six teams to tackle innovative opportunities for GE business by providing
ecosystem with coaches and advisory panel. The coaches and panellists had no authority but they
challenged GE’s assumptions and offered innovative teams an entrepreneurial ecosystem.
Create networks: Networks provided an opportunity for diverse knowledge and capabilities that
enhanced opportunities for solutions
For example, Kellogg Innovation Network (KIN) evolved into an invitation-only group of leaders
from business, academia, government, NGO, and arts. The KIN’s diversity connected people they
didn’t meet, offered new perspectives, insights, and opportunities.
The above five ways could enhance,scale and reach such innovative initiatives of companies which were
under the constraints of men and money.
The ‘ product development process’ is organized to develop new products or services for the market
in a systematic way. There are challenges and constraints. The authors suggest five ways by which
these can be overcome.
1. Why was it important for companies to focus on organizing the product development process?
(Hints: offer new products-find systematic ways of offering new products/services)
2. What were the five ways of overcoming limitations as suggested by Booz & Company?
(Hints: create networks-nurture ecosystem)
Sources: (i) Robert C. Wolcott and Jorn Bang Anderso, “Scale Your Innovation Ini tiatives,” strategy+business,
February 11, 2014
(ii) “New Product Development”, www.businessdictionary.com
Topic Course
Organizing the product development process:New product development: Marketing Management
Unit 13.4
40

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