Hbr reinventing your marketing

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HBR on Reinventing your Marketing

By: Roukaya ISSAOUI

March 2015

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Agenda

Introduction

Rethinking Marketing

Marketing Myopia

Marketing malpractice

The brand Report Card

The Customer Value Proposition

Conclusion

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Introduction

A compilation of Experts’ advices on how to maximize

your Marketing Effort

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Rethinking and reinventing Marketing

1- Cultivating customer

Companies should make the shift. From Product Marketing to value Marketing.

To understand your

customers needs and

how those needs

evolve through time

and adjust your offer

you are offering a

value not a product.

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Rethinking and reinventing Marketing

Example :How to Cultivate customer and build a tight relationship

Shoppers who buy diapers receive a coupon by E-mail not only for

baby products but also for beer

WHY??

The collected Data from the loyalty card about their customer

behavior: which stores they visit, what they buy, how they pay,

shows that they are young parents who can’t spend as much time at

the pubs and they enjoy beer at home.

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2- New Marketing departement organization

Customer Department: transform the

traditionally focused department on

current sales into customer department

by cultivating customer rather than

pushing product and bringing under the

marketing umbrella all customer

focused department

(CCO) Chief Customer officer:

Design and Execute the firm’s customer

relationship strategy Promote customer

centric culture, remove obstacle to the

flow of customer information Top

manager of Tesco spend 1W/ year in a

store

(CM)customer manager: They are customer behavioral scientist, observing

collection information about them, interacting with and learning from them,

analyze and synthesize sophisticated data, and sharing what they learned

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3- New metrics

As a company shift from Product push strategy to customer driven strategy

they need new metrics to gauge the customer centric strategy

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II- Marketing Myopia

“Concentrate on meeting customer’s needs rather than selling

products”

1- The risk of the decline shadow: Every Major Industry was once a

growth industry

2- The Big Mistake: To misunderstand your business Purpose, and fail

to answer those questions:

What business are you really in?

What are you offering for your customer?

Why the growth can stop?

How the ensure continued growth for your

company?

« Don’t lose sight of your customer »

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Marketing Myopia

3- Four Myths that put your business at risk of obsolescence:

M1: When markets are expanding increase the efficiency of our product

rather than boosting the delivered value:

M2:There is no competitive substitute for our industry’s major product

M3:We can protect ourselves through mass product

M4: R&D will ensure our growth

Example:

Railroads industry stopped to grow

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III- Marketing Malpractice; Cause and Cure

It is time to break the paradigms of Market segmentation

« People don’t want to buy a quarter inch drill, they want a quarter

inch hole » T.Levitt a Harvard Marketing professor

1- Instead of segmentation the market

based on customer type it is better to

find out what job to be done people

need!

2- Create a Purpose brand, why

customer will hire your product to solve

his problem or to fulfill his need?

3- The market structure should be

configured from the customer point of

view

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III- Marketing Malpractice; Cause and Cure

I need to send this from A to B with perfect certainty as fast as possible

Businesspeople use FedEx as a verb, the secret is that FedEx was so

much more convenient, reliable and reasonably priced than alternative.

New product innovation success is not a gamble! It a clear purpose brand

that acct as two sides compass:

-One side guides customer to the right product

-The other side guides your designers, marketers, and advertisers as they

develop and market new product

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Marketing Malpractice; cause and cure

How to recognize the Job to be Done of your product?

1- Observe Customer in action: to identify what they really need and how

they use your product

2-Link the product to the Job through Advertising: communicate and explain

to the customer what job your product can perform;

3-Extend your purpose brand

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The Brand report Card

What is it?

It is a method suggested by

“Keller” to grade your brand;

-To assess your brand

equity,

-To identify areas that need

improvement

-To recognize areas in which

your brand is strong and

learn more about how your

particular brand is configured

and positioned.

It helps to identify the actions needed to mTop10 traits maximize your

brand Equity

To grade your brand you can use shared by the world’s strongest brands

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Customer Value Proposition

Price is not the only buying criteria, even if it’s a very important (

Especially for business customers pressured to control cost) customers

seems to care only about price but in fact they care more about how to

maximize profit through the ration Price/Value.

You can persuade your customer to pay premium price by increasing

the value they get.

Thus, you should find out their specific CVP “ their unique

requirements”, than explain to them how your offering outmatch your

rivals, on the criteria that matter most to the customer:

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The Customer Value elements: How to define a CVP?

A company’s offering may have many technical, economic, service, or

social benefit benefits that deliver value to customer but so do

competitors' offering How do the value element compare with those of

the next best alternative?

We sort value elements in 3 types:

-Point of parity: Element which essentially, the same performance or

functionality as those of next best alternative

-Point of difference are element that make a company offering either

superior or inferior to the next alternative

-Point of contention: Element which the company and its customers

disagree regarding how their functionality compares with those of next

best alternative. Either the company regards value element as a P

difference in its favor which the customer regards it as P of parity, or the

company regards that element a P of parity and the customer regards it

as P of difference in favor of the next best alternative

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There are 3 categories of CVP: How a company can design a

suitable CVP


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The CVP: Resonating Focus

It is about: to concentrate on few element ( point of difference and parity)

that are the most critical and relevant for the customer

-How to build your resonating focus CVP?:

- Understand your customer business: to identify their real requirement and

preference

Example

Company: a leading supplier of specialty resin

They perceive an opportunity: strict environmental regulation

They build their CVP around that opportunity

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but the commercial customer they reject it because their customer ( the

coating contractors) refuse it, the price it is so high their profitability shrinks

What they have done?

They conduct a deep CV research that extend to the customer of their

customer

What they have discovered?

-They find out the largest cost component for coating contractors is labor

-The Resin company developed a new resign enables coating producers to

make architectural coating providing faster time to dry that allowed 2 coats to

be applied during a single labor shift, painting contractors would likely accept

a higher price

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Conclusion

« Don’t lose sight of your

customer »

&

“Concentrate on meeting

customer’s needs rather

than selling products”