success factors of innovative marketing strategies

International Marketing Management: Success Factors of Alternative Marketing Strategies

Dr. Christine Falkenreck

Success Factors of Alternative Marketing Strategies

1. Strategy-related definitions | 2 Examples | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary

Agenda

1 S l d D fi i i d R l f h T i

2 E l

1 Strategy-related Definitions and Relevance of the Topic

2 Example

3 l O S3 Blue Ocean Strategy

4 S F f Al M k S4 Success Factors of Alternative Marketing Strategies

5 S5 Summary

SMA Solar Technology AG 2© Dr. Christine Falkenreck

Learning outcomesLearning outcomes

• Understand nature role and impact of international marketing onUnderstand nature, role and impact of international marketing on company goals

• Be able to describe the “Blue Ocean Strategy” as one example of alternative marketing strategiesalternative marketing strategies

• Understand the importance of product innovations on the success factors of marketing strategies

• Understand the issues and decisions involved in building on alternative marketing strategies

• Strengthen participants’ abilities to think strategically and formulate a global marketing strategy based on a deep understanding of customer needs and value

© Dr. Christine Falkenreck

Nobody really knows what„Nobody really knows what strategy is.“ The Economistgy

…Do you?

4© Dr. Christine Falkenreck

Strategy1. Strategy-related definitions | 2 Examples | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary

Michael T. Porter (1980): Strategy is the creation of a unique and valuable position, involving a different set of activities.

Strategy

valuable position, involving a different set of activities.

Brennan et al. (2007): Policies and key decisions adopted by management that have mayor financial implications, involve substantial resource commitment and are not easily reversible.

Marketing StrategiesMarket Scope Strategy (Si l M k t St t M lti M k t St t T t l M k t St t )− Market Scope Strategy (Single Market Strategy, Multi Market Strategy, Total Market Strategy)

− Market Entry Strategy (First In Strategy, Early Entry Strategy, Laggard Entry Strategy)− Product Strategy (Product Positioning, Repositioning, Product Scope, Design, New Product Strategy)

Promotion Strategy (Promotion Mix Strategy Media Selection Strategy Advertising Copy Strategy)− Promotion Strategy (Promotion Mix Strategy, Media Selection Strategy, Advertising Copy Strategy)− Distribution Strategy (Distribution Scope Strategy, Multiple Channel Strategy)− Pricing Strategy (Pricing Strategy for New and Established Products, Price Flexibility Strategy, Price

Leadership Strategy)

5

p gy)


Success Factors


Success Factors

“There are a number of factors that impact the success of a marketing strategy but none are moresuccess of a marketing strategy, but none are more important than thoroughly understanding the target market, setting clear and measurable goals and objectives.” Kotler et al., 2007 j ,

To analyze marketing strategy success, one needs to specify variables that measure firm performance and variables that measure international marketing strategy and results.

Success is measured as growth in total sales, growth in earnings per share and growth in average share prices.


Why discussing success factors of alternative marketing strategies?

1. Strategy-related definitions | 2. Example| 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary

Why discussing success factors of alternative marketing strategies?

− Marketing is perceived as a cost, not an investment.g p

− Company strategies are not defined by those who know and deal with the markets. (remember: “Policies and key decisions adopted by management …“)

− Marketers are always asking for more money, but can rarely explain how much incremental business this money will generate (feedback of 72% of the CEOs).

− Marketers focus too much on the latest marketing trends such as social media, because they believe they represent the new marketing frontiers– but can rarely demonstrate how these trends will help them generate morecan rarely demonstrate how these trends will help them generate more business for the company (feedback of 74% CEOs).

− Unlike CFOs and Sales Forces, they don’t think enough like businesspeople: they focus too much on the creative, “arty” and “fluffy” side of marketing and not enough on its business science, and rely too much on their ad agencies to come up with the next big idea (feedback of 67% CEOs).

Verhoef & Leeflang (2009)http://www.fournaisegroup.com/Marketers-Lack-Credibility.asp



Why are we discussing alternative marketing strategies?

8

http://hbr.org


Agenda

11 Strategy-related definitions and Relevance of the Topic

2 l f f l2 Example of a Successful Company

3 l O S3 Blue Ocean Strategy


5 S5 Summary

SMA Solar Technology AG 9

Example: Koenig & Bauer – manufactures 90% of all security presses (Gelddruckmaschinen)


(Gelddruckmaschinen)

http://www.kba.com 10© Dr. Christine Falkenreck

1. Strategy-related definitions | 2. Examples| 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary

Koenig & Bauer Innovativeness is a key to a leading market position


Koenig & Bauer: Being close to the customer


Guiding Principles Our customers inspire our policies

Koenig & Bauer: Being close to the customer

If you were the marketing manager…Our workforce is our greatest assetOur innovations secure our futureOur commitment is to qualityOur duty is to society

- what would be your goal?- what could the marketing department

do to support the objectives?Our duty is to society

Our ObjectivesTo extend the frontiers of innovation

do to support the objectives?

To become the technological leader in key marketsTo expand our global market position in sheetfed offset, web offset, newspaper and digital offsetTo offer systems competence through in-house expertise or strategic alliancesTo offer systems competence through in house expertise or strategic alliancesTo maintain a consistently high standard of quality in both our products and our servicesTo offer practical solutions to individual production needsTo intensify customer careTo maintain a high level of staff motivation and qualificationTo enhance shareholder valueTo protect the environment by improving press and production ecologyTo protect the environment by improving press and production ecologyTo fulfil our social and cultural obligations



Agenda


2 E l f S f l C

3 l

2 Example of a Successful Company

3 Blue Ocean Strategy


5 S5 Summary


“Standard” Marketing Strategy: Planning Roadmap

1. Strategy-related definitions | 2 Example | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary

Standard Marketing Strategy: Planning Roadmap

Who you Where you i

How you will t th

MarketingVision and Marketing

are are going get there

StrategicCriticalBasics

Marketing Objectives

Vision and Mission

MarketingStrategy

glevel

SWOT Marketing Goals

Marketing Plan

Planninglevel

STP Action ImplementationPlans

Components of Strategic Marketing Planning

level

STP= Segmentation, Targeting, Positioning 14© Dr. Christine Falkenreck


Alt ti M k ti St t i

• The idea of Blue Ocean strategy is to build new businesses where none

Alternative Marketing Strategies…

• The idea of Blue Ocean strategy is to build new businesses where none existed before.

• Start thinking about your processes from customer perspective.


Why Blue Ocean Strategy?

1. Strategy-related definitions | 2. Examples | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary

• So-called Blue Ocean industries are more profitable than traditional business fields with head-to-head competitors.

y gy

• In the Blue Ocean strategy, you must offer your customers a value innovation (i.e. tangible product or service advancements) accompanied by demonstrable savings.y g

Think about Ryanair, which is not only flying people, but also providing the whole holiday experience with accommodation and car rentals included.

Holiday does not start and end for people when they fly (that is how traditional airlines used to think)…


The Blue Ocean Strategy


• Businesses naturally focus on current customers, a process that invariably leads to greater market segmentation analysis. But, real growth

gy

y g g y glies beyond existing demand. To get to the open water, focus on potential future customers.

• Assess your service’s or product’s usefulness, ease, handiness, safety, entertainment value and environmental friendliness in light of how each factor affects the customer upon buying it, bringing it home, using it ddi t it k i it ki d t ll di i f itit, adding to it, keeping it working and eventually, disposing of it.

• Remember that the customer experience is the process.

Apple did not satisfy with just creating new versions of iPhone, they reinvented how people work with portable devices by introducing iPad.

That created them new reaches beyond traditional smartphone markets.


Blue Ocean vs. Red Ocean Strategy


Blue Ocean Strategy Red Ocean Strategy

•Create uncontested market spaceMake the competition irrelevant

•Compete in existing market space

•Break the value cost trade off •Make the value-cost trade off

•Make the competition irrelevant•Create and capture new demand

p•Beat the competition•Exploit existing demand

•Break the value-cost trade off•Align the whole system of a firm‘s activities with its strategic choice of differention and low

•Align the whole system of a firm‘s activities with its strategic choice of differention or low costchoice of differention and low

cost


Example: Automobiles:

1. Strategy-related definitions | 2. Example | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary

What kind of strategic logic is needed to guide the creation of blue oceans?Identification of key strategic elements

At the end of the nineteenth century, the automobile industry was small and unattractiveunattractive.

More than 500 automakers in America competed in turning out handmade luxury cars that cost around $1 500 and were enormously unpopular with all butluxury cars that cost around $1,500 and were enormously unpopular with all but the very rich.

Anticar activists tore up roads, ringed parked cars with barbed wire, andAnticar activists tore up roads, ringed parked cars with barbed wire, and organized boycotts of cardriving businessmen and politicians.

Woodrow Wilson caught the spirit of the times when he said in 1906 that “nothing g p ghas spread socialistic feeling more than the automobile.”


Automobiles: 1. Strategy-related definitions | 2. Example | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary

Identification of key strategic elements

harvard business review • october 2004 Incumbent: company is already active in the field. *The blue oceans made by incumbents were usually within their core businesses. 20

GM car for every purse and purpose


GM car for every purse and purpose

Alfred Sloan explained his famous market segment strategy of "a car for every purse and purpose" in the 1924 annual report toa car for every purse and purpose in the 1924 annual report to shareholders. Sloan divided the U.S. vehicle market into segments by price range. Each GM brand’s products was to be focused on one g psegment, with Chevrolet at the low end of the market and Cadillac at the high end.

With rival Ford Motor Company sticking to a single model in a single segment (the low-end Model T), GM soon overtook Ford as the sales leader in the U.S. market.

If your not thinking segments, you’re not thinking. To think f y g g y gsegments means you have to think about what drives customers, customer groups, future customers and the choices that are or might be available to them.

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choices that are or might be available to them.Ted Levitt, Marketing Imagination



Why not focus on competition?

Of course competition matters. p

But by focusing on competition, scholars, companies, and consultants have ignored two very important— and, far more lucrative—aspects of strategy: One is g y p p gy

to find and develop markets where there is little or no competition—blue oceans—and the other is to exploit and protect blue oceans.

These challenges are very different from those to which strategists have devoted most of their attention.

22Kim & Mauborgne (2005) © Dr. Christine Falkenreck


Four Action Framework to find and develop markets where there

Which of the factors that the industry takes

is little or no competition—blue oceans

EliminateWhich of the factors that the industry takes for granted should be eliminated?

ReduceWhich factors should be reduced well below the industry‘s standard?

Raise Which factors should be raised well above the industry‘s standard?

CreateWhich factors should be created that the industry has never offered?industry has never offered?


Four Action Framework: the IKEA Idea


: Providing Exceptional Customer Experiences

EliminatePersonel to mount furniture at the customer‘s home, high price furniture of different brands

Reduce Costs for presentation of furniture, costs for sales people

Choice and variation of own brand furniture, multi-language advertisments (Berlin:German-Turkish)

Raise( )

Market segmentation, focus on a certain target group: raise awareness for „value for money“ furniture, where money can be safed by involving the customer in the service

Create

The IKEA Philosophy: Unique sets of furniture, exclusivelydesigned for IKEA, self transportation, storage room is sales room restaurants and entertaining kindergarden forroom, restaurants and entertaining kindergarden for customer‘s children, „IKEA Family“ customer club



Ein weiterer „blue ocean“: Ikea Business


1. Strategy-related definitions | 2 Example | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary

Agenda


2 E l f S f l C2 Example of a Successful Company

3 l

4 f l k

3 Blue Ocean Strategy

4 Success Factors of Alternative Marketing Strategies

5 S5 Summary


1. Strategy-related Definitions | 2. Examples | 3. Blue Ocean Strategy| 4. Success Factors and Limitations| 5. Summary

Generally: M k t t i k ti tMake strategic marketing a core competencyBe prepared to work together with you colleauges on …

1. focus and invest resources and competencies to win in a few attractive and clearly defined marketsattractive and clearly defined markets

2. view business in terms of opportunities in value-based market segments to obtain optimal response

3 id i ff i t th k t t b d3. provide a superior offering to the market segments based on a defensible competitive advantage

4. implement plans exceedingly well by anticipating and eliminating barriers to organizational growth and change

28Kotler, P., Berger, R. & Bickhoff, N. (2010) © Dr. Christine Falkenreck

S f t f Alt ti M k ti St t i

1. Strategy-related Definitions | 2. Example | 3. Blue Ocean Strategy| 4. Success Factors and Limitations| 5. Summary

Success factors of Alternative Marketing Strategies

Head-to-Head Competition Blue Ocean CreationIndustry Focuses on rivals within its

industryLooks across alternative industries

Strategic group Competitive position within Looks across strategicStrategic group Competitive position within strategy

Looks across strategic groups within industry

Buyer group Better serving the buyer group Redefines the industry buyer groupg p

Scope of product or service offering

Maximizing the value of product and service offerings within the bounds of its industry

Looks across to complementary product and service offerings

Functional-emotional orientation

Improving price performance within the functional-emotionalorientation of its industry

Rethinking the functional-emotional orientation of the industry

Time Adapting to external trends as they occur

Participates in shaping external trends over time


1. Find the Customer Value in your Target Segment


Unique offering Protected advantage

1. Find the Customer Value in your Target Segment

q g g– Patented innovation/trade secrets– Innovative products

Customer service (operations and technical)

Success based onuniqueness

– Customer service (operations and technical)

Differentiated offering Marketing advantage– Value pricing– Unique selling propositions– Integrated communication

Success based onValueIntegrated communication

– Creative distribution and logistics– Brand equity

Value

30Kotler, P., Berger, R. & Bickhoff, N. (2010) © Dr. Christine Falkenreck


2. Bear in mind that innovativeness is the key driver to company success – be a partner to CFOs and heads of business development

• be measurable, not only creative: prove the generation of business growth

• What are the goals of the new strategy?• What are the new targets and milestones?

3. Set clear measurable goals (marketing controlling)

What are the new targets and milestones?• Who is responsible for what?

4. Evaluate the possibility of strategic marketing partnershipsp y g g p p• Co-Branding• Ingredient Branding• Franchise

5. Look across alternative industries (market research)• find and develop markets where there is little or no competitiond a d de e op a ets e e t e e s tt e o o co pet t o

—blue oceans31© Dr. Christine Falkenreck

Here are some reflective questions that you may ask:


Here are some reflective questions that you may ask:

• Are your organization’s market boundaries clear to you?

Do you understand where your customer’s market boundaries are?• Do you understand where your customer’s market boundaries are?

• Are you seeing the big picture?

Do you understand where demand for services and products in your target• Do you understand where demand for services and products in your target customer groups come from?

• Are you able to work together as a team towards a common goal or does y g ginternal hurdles slow you down?

• Is providing exceptional customer experiences built into your marketing strategy?strategy?

The road to success is always under construction.

32

Unkown



Agenda


2 E l f S f l C2 Example of a Successful Company

3 l3 Blue Ocean Strategy

4 f l k

5 S

4 Success Factors of Alternative Marketing Strategies

5 Summary


Was sind für Sie Erfolgsfaktoren alternativer Marketing Strategien?


Was sind für Sie Erfolgsfaktoren alternativer Marketing Strategien?

− nah am Kunden sein und das „große Ganze“ im Blick behaltenStellenwert von Produktinnovation kennen: Für welche neuen− Stellenwert von Produktinnovation kennen: Für welche neuen Produkteigenschaften ist der (zukünftige) Kunde bereit zu zahlen?

− Neue Geschäftsideen für neue Märkte − Gute Kontakte zu anderen Unternehmensbereichen und möglichen− Gute Kontakte zu anderen Unternehmensbereichen und möglichen

Partnern (Stichwort Co-Branding, Franchise) pflegen.− Marketing-Controlling : Quantifizierbare Marketingziele „ Verkaufsumsatz pro

Produkt und Marktsegment während der Laufzeit des Planes“Produkt und Marktsegment während der Laufzeit des Planes − Marktsegmentierung und Marktforschung− „internes Marketing“ als Beitrag zur Mitarbeitermotivation und

Mitarbeiterinformation – und zum Überwinden von „internen Aktzeptanzhürden“„ p

Die Suche nach „Blue Oceans“ – neuen Märkten mit Entwicklungspotenzial und wenig Wettbewerb schafft neue Möglichkeiten das Unternehmen imund wenig Wettbewerb – schafft neue Möglichkeiten, das Unternehmen im Markt zu positionieren, Marktanteile auszubauen und Raum für Innovationen zu schaffen.

Dadurch wird ein Unternehmen unabhängig vom (Preis) Wettbewerb.34© Dr. Christine Falkenreck

Mintzbergs Grundthesen zur Formulierung erfolgreicher Strategien


S f

Mintzbergs Grundthesen zur Formulierung erfolgreicher Strategien Stichwort „Gras Roots Strategy“

• Es gibt nicht den Weg der Strategieformulierung. Es kann nicht von vornherein festgelegt werden, wie und wo Strategien entstehen.

• Der Prozess der Strategieformulierung darf nicht überkontrolliert werden. EsDer Prozess der Strategieformulierung darf nicht überkontrolliert werden. Es ist wichtiger, Vielfalt im Unternehmen entstehen zu lassen – als eine unnatürliche Konsistenz von Handlungsansätzen im Unternehmen zu erzwingen.g

• Es müssen Freiräume geschaffen werden, in denen sich Strategien eigendynamisch entwickeln können.

• breites Feld kreativer Potenziale, Ressourcen zur Steigerung der Lernfähigkeit. Mitarbeiter sind heute in Netzwerken organisiert und schaffen übergreifenden Austausch.

Erfolgreiche Unternehmen organisieren sich anders, definieren ihre Verantwortung übergreifend (Corporate Governance, Corporate Citizenship) und aktivieren ihre Mitarbeiter anders als früher.

Mintzberg, Ahlstrand, & Lampel (2001) 35

Literature

• Brennan, R. Canning, L. & McDowell, R. (2007): Business-to-Business Marketing, Sage

• W.Chan Kim & Renée Mauborgne (2005): Blue Ocean Strategy – How to Create Uncontested Market Space and Make the Competition Irrelevant

• P. C. Verhoef & P. S.H. Leeflang (2009): Understanding the Marketing g ( ) g gDepartment’s Influence Within the Firm, Journal of Marketing, Vol. 73

• H. Mintzberg,B. Ahlstrand, & J.Lampel (2001): Strategy Safari: A Guided Tour Through The Wilds of Strategic Mangament, Free Press, NYThrough The Wilds of Strategic Mangament, Free Press, NY

• Kotler, P., Berger, R. & Bickhoff, N. (2010): The Quintessence of Strategic Management, SpringerM T P t (1980) C titi St t T h i f A l i I d t i• M.T. Porter (1980): Competitive Strategy: Techniques for Analysing Industries and Competitors

Electronical resourceshttp://www.ikea.com/ms/de_DE/about_ikea/the_ikea_way/our_business_idea/index.htmlhttp://history gmheritagecenter com/wiki/index php/1924 %22A Car for Every Purse and Purpose%22

36

http://history.gmheritagecenter.com/wiki/index.php/1924,_%22A_Car_for_Every_Purse_and_Purpose%22http://hbr.orghttp://www.fournaisegroup.com/Marketers-Lack-Credibility.asp

The future belongs to those who see possibilities before they become obvious.who see possibilities before they become obvious.

Unknown

37

Beispiel: Vernetzung strategischer und operativer Marketing- und Vertriebsplan

Auszug aus der Marketingstrategie:-Erschließung des Absatzmarktes in Fernost

Ausbau der Dienstleistungen- Ausbau der Dienstleistungen

Auszug aus der strategischen Marketing- Auszug aus der operativenAuszug aus der strategischen Marketing-und Vertriebsplanung

Ziele: Aktivitäten: Budgets:

Auszug aus der operativen Marketing- und Vertriebsplanung

Ziele: Aktivitäten Budgets:-Mittelfristige Etablierung in

Japan und Südkorea unter

-Definition eines Marktentwick-

lungskonzeptes-25 Mio EUR

- erfolgreicher Markteintritt in

Japan und Südkorea bis

Aktivitäten-Planung und

Umsetzung des Markteintritts in

Japan und

-7 Mio EUR

fünfgrößten Anbietern am

Markt- Steigerung des

Jahresende, Marktanteil

> 5%

Japan und Südkorea

- UmsetzungAnteils an Dienstleistungen

am Gesamtumsatz

f 40% i

- Entwicklung neuier

Geschäfts-konzepte im

Di l i

- 21 Mio EUR- Steigerung

des Dienstleistung

santeils auf 2 % bi

Umsetzung der ersten Geschäfts-konzepte im

Dienstleistungs

- 6 Mio EUR

38

auf 40% in 5 Jahren

Dienstleistungs-bereich

25% bis Jahresende

Dienstleistungsbereich

Zunehmende Detaillierung und Kurzfristigkeit

success factors of innovative marketing strategies

Documents

marketing strategy success

globalmarketing strategy

blue ocean strategy

early entry strategy

price flexibility strategy

t st t market entry

number of factors

latest marketing trends