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marketing summary
- Instelling
- Tilburg University (UVT)
Summary of 39 pages for the course Introduction To Marketing at UVT (marketing summary)
[Meer zien]Voorbeeld 4 van de 39 pagina's
Voorbeeld 4 van de 39 pagina's
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Voorbeeld van de inhoud
Lecture 1Video- what is marketing?
Marketing is the bridge between organization and its environment. You can build this bridge
by using product, price, place and promotion. If you do this well, it should result in a
competitive advantage.
With marketing, you try to achieve mission and goals of an organization by focusing at
needs, knowledge and experience of the consumers. You do this better than the competition
can. Marketing is based on research and analysis of yourself, the competitors, consumers, the
environment. It has the end goal to achieve a transaction, or even better: loyalty.
Marketing mix
1. Product – information and attention
2. Price - costs (money, time, effort)
3. Place- where (offline and online)
4. Promotion – advertisement in newspapers etc.
Important: marketing is not sales
Sales Marketing
Change consumers to buy product once Change the organization
Aggressive promotion and selling Studies needs and wants consumers
Push harder Change instruments – price, promotion
Not scientific: trial and error Scientific: test, change and improve theories
One transaction: short term Connection with the customers: long-term
Marketing is often a fear of companies: if we focus on what the consumer wants, the quality
might become worse. Or we already know what the client wants. It will cost more than we
ever get back. We have tried it before.
Marketing implies that in itself the product can stay the same, but…
- Who do we want to reach?
- What do consumers think of us?
- Do we reach them? With a good message and
communication-tools?
- What can be improved on the offer-side?
Marketing is the bridge between and organization
and its environment. To understand both sides of the
bridge we do internal and external analysis (research).
Consumer behavior: marketing from an organization’s perspective, figure out what
consumers want and change strategy accordingly.
- What happens in the head of the consumer?
- How does a consumer process all the information?
1
,Competitive advantage: a company is good at something, that competitors do not have, and
it is important to consumers.
Competitive strategy is about deliberately choosing a different set of activities to deliver a
unique mix of values. Performing different activities than rivals OR performing the same
activities differently.
Competitive advantage is about finding a sustainable difference between yourself and
rivalry by making trade-offs. The essence of strategy is choosing what not to do: deliver
great value & ask a higher price or deliver comparable value at lower costs. Look for a fit
between your activities. If all your activities fit very well together, imitation is difficult.
Competitive advantage grows out of the entire system of activities.
What is strategy? – Michael E. Porter
Strategy is the creation of a unique and valuable position, involving a different set of
activities. Strategy is making trade-offs in competing, the essence of strategy is choosing
what not to do. Strategy is about combining activities. Lastly, strategy is creating a fit
among a company’s activities. The success of a strategy depends on doing many things
wel and integrating among them.
. The myriad activities that go into creating, producing, selling and delivering a product or
service are the basic units of competitive advantage. Operational effectiveness means
performing these activities better- faster, or with fewer inputs and defects than rivals.
Companies can reap enormous advantages from operational effectiveness, as Japanese firms
demonstrated in the 70s and 80s with such practices as total quality management and
continious improvement. When a company improves its operational efffectiveness, it moves
toward the frontier. But from a competitive standpoint, the problem with operational
effectiveness is that best practices are easily emulated. As all competitors in an industry
adopt them, the productivity fronier – the maximum value a company can deliver at a given
cost, given the best available technology, skills, and managements techniques- shifts
outward, lowering costs and improving value at the same time. Such competition produces
absolute improvement in operational effectiveness, but relative improvement for no one. And
the more benchmarking that companies do, the more competitive convergence you have-
that is, the more indistinguishable companies are from one another.
Strategic positioning attemps to achieve sutainable competive advantage by preserving what
is distinctive about a company. It means performing different activities from rivals, or
performing similar actities in different ways.
Three key principles underlie strategic positioning
1. Strategy is the creation of a unique and valuable position, deliberately choosing a
different set of activities to deliver a unique mix of value. Strategic position
emerges from three distinct sources:
- Serving few needs of many customers Variety-based positioning: positioning
based on the choice of product or service varieties rather than customer segments. It
can serve a wide array of customers, but for most it will meet only a subset of their
needs.
- Serving broad needs of few customers
2
, - Serving broad needs of many customers in a narrow market Needs-based
positioning: serving most, or all the needs of a particular group of customers.
- Access-based positioning: segmenting customers who are accessible in different
ways
2. Strategy requires you to make trade-offs in competing – to choose what not to do.
Some competitive activities are incompatible; thus gains in one area can be achieved only
at the expense of another area. Trade-offs create the need for choice and protect against
repositioners and straddlers.
3. Strategy involves creating ‘’fit’’ among a company’s activities
Fit has to do with the ways a company’s activities interact and reinforce another. Fit
drives both competitive advantage and sustainability: when activities mutually
reinforce each other, competitors cannot easily imitate them. There are three types of fit
1. First order fit Simple consistency between each activity and the overall strategy.
Consistency ensures that the competitive advantages of activities cumulate and do not
erode or cancel themselves out.
2. Second-order fit Activities are reinforcing
3. Third-order fit optimization of effort. Coordination and information exchange
across acitivities to eliminate redundancy and minimize wasted effort are the most
basic types of effort optimization.
In all three types of fit, the whole matters more than any individual part. Competitive
advtantage grows out of the entire system of activities. But poor performance in one
acitivity will degrade the performance in others. The most viaable positions are those
whose activity systems are incompatible because of tradeoffs
Employees need guidance about how to deepen a strategic position rather than broaden
or compromise it. About how to extend the company’s uniqueness while strengthening the
fit among its activities. This work of deciding which target group of customers and
needs to serve requires dicsiple, the ability to set limits, and forthright communication.
Clearly, strategy and leadership are inextricably linked. Strong leaders, willing to
make choices are essential.
Transforming corner-office strategy into frontline action – Gadiesh &
Gilbert
The ability of frontline employees to execute a company’s strategy without close central
oversight is vital as the pace of technological change accelerates and as companies grow
rapidly and become increasingly more decentralized. To drive such behavior, a
company needs to give employees a mandate broad enough to encourage enterprising
behavior but specific enough to align employees’ initiatives with company strategy. An
organization needs a strategic principle. This represents a plan to effectively allocate
scarce resources to achieve sustainable competitive advantage.
3
, An organization in which everyone is a decision maker has the potential to spin out of control.
Within a single company, its tricky to achieve both decentralized decision making and
coherent strategic action. But some companies do this by the strategic principle: a
memorable and actionable phrase that distills a company’s corporate strategy into its unique
essence and communicates it throughout the organization. This strategic principle has power:
it helps companies maintain strategic focus while fostering the flexibility among employees
that permits innovations and rapid response to opportunities.
When a strategic principle is well crafted and effectively communicated, managers at all
levels can be trusted to make decisions that advance rather than undermine company strategy.
A mission statement informs a company’s culture and is aspirational; it gives people
something to strive for. A strategic principle drives a company’s strategy and is action
oriented: it enables people to do something now. A mission statement inspires whereas a
strategic principle enables to act quickly.
A strategic principle should guide a company’s allocation of scarce resources in order to
build a sustainable competitive advantage. More specifically it:
- Forces trade-offs between competing resource demand
- Tests the strategic soundness of a particular action
- Sets clear boundaries within which employees must operate while granting them
freedom to experiment within those constraints.
Nowadays many companies face four situations that make a strategic principle crucial for
success
1. Decentralization – there is a corresponding need for a mechanism to ensure coherent
strategic action. A strategic principle can help executive to maintain consistency while
giving unit managers freedom to tailor their strategies to meet their own needs.
2. Rapid growth – during these times, often less-experienced managers are forced to
make decisions. A clear and precise strategic principle can help counteract this
shortage of experience.
3. Technological change – managers in the high-tech industry must react immediately
to sudden and unexpected developments. A strategic principle helps ensure that the
decision made by frontline managers in such circumstances add up to a consistent,
coherent strategy.
4. Organization turmoil – in a period of organization turmoil a strategic principle can
smoothen a period of CEO leadership succession
With a strong strategic principle, you are more efficient and you can run with a leaner
management team because everyone is on the same page.
A powerful strategic principle is of no use unless it is communicated effectively.
Your strategy may shift substantially as your customers demographics and needs change, but
the very essence of it is likely to remain the same.
4
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