LECTURE INTRODUCTION
Marketing strategy Integrated pattern of decisions that specify crucial choices concerning products,
markets, marketing activities and resources in the creation, communication, and/
or delivery of products that o er value to customers in exchanges with the
organization and thereby enables the organization to achieve speci c objectives
Marketing decisions - Strategic (long-term, holistic, major resources, irreversible, trade-o s)
- Tactical (short-term, execution/implementation, marketing mix)
In uence on - Supply side factors (characteristics of industry, rm and product o ering)
marketing strategy - Demand side factors (characteristics of target customers)
Key purposes of - Creating market-based relational and intellectual assets
marketing strategy - Establishing and nurturing mutually bene cial exchange relationships
- Modifying/in uencing/shaping a ect, cognition and behavior of customers
LECTURE STRATEGIC DECISION-MAKING
Organizational Process/outcome of improving organizational actions through better knowledge
learning and understanding (learn faster than competitors), accumulation of individual
learning and social knowledge in relationships (more than sum of the parts)
Single-loop learning Adaptive learning within boundaries re ecting organization’s assumptions, solves
problems (core capabilities become core rigidities = tyranny of served market)
Double-loop learning Generative learning that questions long-held assumptions and uses feedback
(learning about new things, seeing the bigger picture and prevent problems)
Organizational 1. Information acquisition (exploitation (internal) and exploration (external))
learning process 2. Information dissemination (share formally (climate) and informally (culture))
3. Information shared interpretation (gap between data and knowledge, con ict)
4. Information utilization (action-oriented, knowledge-enhancing, a ective use)
Culture and climate Culture = deep rooted set of values and beliefs that provide norms for behavior
- Market orientation (data from environment)
- Entrepreneurship (proactive, innovative, explorative, tolerance for risk)
Climate = operationalize culture, structure and processes to achieve behavior
- Facilitative leadership (motivate people to learn: “demand pull” system)
- Organic and open structure (frequent informal communication)
- Decentralized strategic planning (iterative participative approach, bottom-up)
The Baker paradox The job baker is easier to remember than the name Baker because we have
more associations towards the job baker (e.g. smell of bread)
Gottman’s 4 Criticism (“what is wrong with you?), contempt (“you’re so stupid”),
horsemen defensiveness (“problem isn’t me, it’s you”) and stonewalling (“whatever…”)
Psychological T- Register the gives and takes of relationships (the balance is the expected value
accounts which determines motivation for continuing relationship)
Support Systems Software translating hard data into meaningful information through summary
(MMSS) statistics (link between market research and marketing decision-making)
Marketing Problem- - Optimizing (looking for optimal solution, mathematical models)
Solving Modes - Reasoning (using mental models, more subjective)
(MPSM) - Analogizing (starting from prior experience and solutions)
- Creating (thinking out-of-the-box)
Optimizing When there is structured data, stable decision environment and analytical-
cognitive decision maker (factors for choosing MPSM)
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, Be responsive - Business cycles (impact on consumers, managers, marketing e ectiveness)
- Competition (prices) and customers (needs)
- Implementation intentions (with “if then” statements to achieve goals)
Cognitive biases Self-interest bias = bene ting yourself (care for overoptimism)
A ect heuristic = fallen in love with proposal (apply quality controls)
Groupthink = dissenting opinions not explored (con ict welcome, gather views)
Saliency bias = diagnosis in uenced by success (ask for comparisons)
Con rmation bias = search for con rming info to lower dissonance (ask genuine)
Availability bias = what you see is all there is (use checklist of data needed)
Anchoring bias = use reference point, under-adjustment (look for source)
Halo e ect = if something is good on one attribute, it is good on all others
Horns e ect = if something is bad on one attribute, it is bad on all others
Sunk cost bias = in uence of previous cost, don’t chase bad money with good
Overcon dence = too positive in self-assessment (biggest bias)
Planning fallacy = bottom-up or inside thinking (get outside perspective)
Competitor neglect = failure to anticipate on competitors (look at environment)
Disaster neglect = is the worst case bad enough (propose premortem scenarios)
Loss aversion = losses weigh heavier than gains (minimax regret reduces this)
Expected Monetary (Prob1 * value1) + (prob2 * value2)
Value (EMV) Risk and uncertainty are involved in this
Decision criteria Maximax (optimism) = max pro t in best case (best-case scenario)
Maximin (pessimism) = max return in worst case (worst-case scenario)
Criterion of realism = di erent probabilities for di erent options (0.8 and 0.2)
Equally like = same probabilities for di erent options (both 0.5)
Minimax regret = minimize “maximize opportunity los”
Game theory Impact of strategies of competing rms on our strategy (often zero-sum game)
Saddle point = neither of us is changing behavior given what the other is doing
Dominance = no matter what store Y does, one is the better option for store X
LECTURE 3 INNOVATION
Innovation challenge* First mover: technological leader, high market share, pre-emption scarce assets
Later mover: ‘free rider’ bene t, better positioning (on trends), less uncertainty
Innovator strategy Firm with superior R&D technological skills (technology-oriented, rst mover)
Imitator strategy Firm with superior market/consumer knowledge (marketing-oriented, late mover),
sometimes it is better to be later on the market and learn/bene t from pioneers
Incremental Economic bene ts: increase overall rm demand/revenues, charge higher price
innovations Strategic bene ts: deter entry, protect product leadership, increase supply costs
Do both innovations Radical innovations are springboard for incremental innovations that generate
revenues, which in turn enhances ability to do radical innovations (so do both)
What makes - Firm size (more resources, economies of scale, higher sales, loss of control)
companies - Willingness to cannibalize (= reduce value of investments)
innovative? - Market power (high concentration/being monopoly, no need to innovate)
- Organizational culture (capacity to innovate, learning)
Innovation - In house (internal R&D development)
development - Outsourcing NPD (depends on technological and cultural uncertainty)*
- Co-developing with customers (ask for superior needs ful llment)
Consumer Function of consumer characteristics (age, education, income), innovation
innovativeness characteristics (complexity, novelty, uncertainty), marketing communication,
promotion, price, distribution, social pressure and characteristics of industry
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