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Title: MB 572 Differentiation and Marketing Innovation


1
MB 572 Differentiation and Marketing Innovation
  • Key instructors ??. ????????? ?????????
  • ??. ?????????? ?????????????
  • E-mail suthawan.chi_at_gmail.com
    rojanasak_at_gmail.com
  • http//mb572utcc.wikispaces.com

2
Course Description
  • ???????????????????????????????????????????????
    ??????????? ??? ???????????????????
    ??????????????????? ??????? ???????????????
    ???????????????????????? ??????????
    ????????????????????????? ????????????????????????
    ?????????????????????????????? (Innovation
    process) ??????????????????? (Differentiation)
    ?????????????????? (Creativity)
    ???????????????????????????????????????????
    (Commercialization) ??????????????????????????????
    ??????? (Competitive advantages)

3
Objectives
  • ???????????????????????? ?????????????????????????
    ???????????????????????????????????????
    (Innovation process) ???????????????????
    (Differentiation) ?????????????????? (Creativity)
  • ????????????????????? ????????????????????????????
    ????????? ???????????????????????
    ???????????????????????????? ???????????????
    ??????????????????????????????????????????????????
    ???????????????????????????????????????

4
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6
Course Evaluation
  • Case studies presentation 10
  • Quiz, assignments, and class attention 10
  • Term paper 50
  • Mid-term Examination 30
  • Final Examination -

7
Main text
  • Trott, Paul (2008) Innovation Management and New
    Product Development, 4th Edition, Pearson
    Education Limited, Essex, England.

8
The Worlds Most Innovative Companies
  • Apple
  • Google
  • Toyota Motor
  • General Electric
  • Microsoft
  • Tata group
  • Nintendo
  • PG
  • Sony
  • Nokia
  • Amazon
  • IBM
  • Research in Motion
  • BMW

Source Jena McGregor, Most innovative
companies, Business Week, 2008
9
The Worlds Most Innovative Companies
  • Hewlett-Packard
  • Honda
  • Walt Disney
  • General Motors
  • Reliance Industries
  • Boeing
  • Goldman Sachs group
  • 3M
  • Wal-Mart stores
  • Target
  • Facebook

Source Jena McGregor, Most innovative
companies, Business Week, 2008
10
Topics
  • Core marketing strategies cost leaderships,
    differentiation, and focus
  • Differentiation and competitive advantage
  • Differentiation and Blue ocean concept

11
Competitive Advantage
  • The key superior performance is to gain and hold
    a competitive advantage through differentiation
    of product offering, which provides superior
    customer value or by managing for lowest
    delivered cost.

12
Competitive Advantage
  • Competitive advantage is the advantage over
    competitors gained by offering greater value
    either through lower prices or by providing more
    benefits that justify higher prices.

13
Sources of Competitive Advantage
  • Superior skills
  • Superior resources
  • Core competences
  • Value chain

14
Core Marketing Strategies
  • Competitive strategies
  • Cost leadership
  • Differentiation
  • Cost focus and Differentiation focus

15
Cost leadership
  • To become the low cost producer in the industry
  • A cost leader must achieve parity or at least
    proximity in the bases of differentiation
  • Often achieve by economies of scale

16
Achieving Cost Leadership
  • Economies of scale
  • Experience
  • Capacity utilization
  • Linkages
  • Integration
  • Timing
  • Inter-relationships
  • Location

17
Differentiation
  • To be unique in the industry along some
    dimensions that are widely valued by buyers
  • Premium price for product but cannot ignore cost
    position (still should decrease cost)
  • Differentiation product/ distribution/ sales/
    marketing/ service/ image, etc.

18
Focus
  • To be best in a segment or group of segments
  • Two variants cost focus differentiation focus

19
Achieving Differentiation
  • Uniqueness drivers
  • Product and/or Service differentiation
  • Quality/ packaging/ branding/ service
  • Pricing differentiation
  • Price war vs. Premium pricing
  • Promotional differentiation
  • Promotional tools/ message
  • Distribution differentiation
  • Shopping by phone through TV-based catalogues/
    the Internet
  • Brand differentiation
  • Unique emotional proposition

20
How to Differentiate
  • A three- step process
  • Defining the customer value model
  • Building the customer value hierarchy
  • (i.e. a fine restaurant)
  • Basic food is edible and delivered
  • Expected good china/ tableware/ tablecloth/
    napkin/ flowers/ service/ well-prepared food
  • Desired pleasant/ quiet/ interesting great
    food
  • Unanticipated complementary sorbet
  • Deciding on the customer value package

21
Sustaining Competitive Advantage
  • Unique and valued products
  • Clear, tight definition of market targets
  • Enhanced customer linkages
  • Established brand and company creditability

22
STP Marketing
  • Segmentation
  • Target market
  • size, growth, attractiveness, company objectives
    and resources
  • Positioning
  • Product position/ positioning map

Competitive differentiation
23
Competitive Positioning Strategy
  • Advantage-creating resources-
  • Contribute to providing value for customers
  • Are unique to the firm
  • Are hard for competitors to acquire or imitate

24
Competing through the New Marketing Mix
  • 4Ps
  • Product
  • Price
  • Promotion
  • Place
  • 4Cs
  • Customer needs/ wants
  • Cost to satisfy
  • Communication
  • Convenience to buy

25
The Market Offer
  • Key product/service concepts
  • Product/service choice criteria rational/
    emotional/ lifestyle/ assurance brand
  • Product/service differentiation
  • Diffusion of innovation
  • Managing the product over its life cycle
  • The impact of the Internet on market offering

26
Marketing Mix Product
27
Marketing Mix Product
28
Pricing Strategies
  • Pricing consideration
  • Production costs
  • Economic value to the customer
  • Competitor price levels
  • Desired competitive positioning
  • Corporate objectives
  • Price elasticity of demand
  • Assessing value to the customer
  • The effect of the Internet on pricing decisions

29
Pricing Strategies
  • Pricing methods
  • Cost plus pricing
  • Going rate pricing, based on prevalent market
    price
  • Perceived value pricing
  • Promotional pricing
  • Special events
  • Cash rebates
  • Low interest finance
  • Psychological pricing

30
Marketing Mix Price
31
Communication Strategies
  • The communications process
  • A basic communications model
  • Awareness
  • Interest
  • Desire
  • Action

32
Communication Strategies
  • Communications decisions
  • What message to convey
  • What communications tools to use
  • How to translate the message in copy
  • Which media to use
  • How much to spend on communications

33
Communication Strategies
  • Communications tools
  • Advertising
  • Public relations
  • Sales promotions
  • Personal selling
  • Direct marketing
  • Sponsorship

34
Communication Strategies
  • The use of the Internet for marketing
    communications
  • Banner advertising and pay-per-click
  • Viral marketing
  • Pre-launch promotion
  • Advertising audience measurement

35
Marketing Mix Promotion
36
Marketing Mix Promotion
37
Some Aspects of Marketing Innovation
  • Viral Marketing
  • Word of Mouth Marketing
  • Digital Marketing Innovation

38
Viral Marketing
  • Viral Marketing is the key to success.
  • marketing techniques that use social networks to
    produce increases in brand awareness or to
    achieve other marketing objectives (such as
    product sales) through self-replicating viral
    processes, analogous to the spread of computer
    viruses.
  • It can be word-of-mouth delivered or enhanced by
    the network effects of the Internet.
  • Viral promotions may take the form of video
    clips, advergames, text messages.

39
Word of Mouth Marketing
  • Different possibilities to create a big effect
    with small budget
  • Word of mouth marketing is a highly valued
    marketing tool for advertisers
  • The receiver of word-of-mouth referrals tends to
    believe that the communicator is speaking
    honestly. The receiver relies on the information.
  • A very successful word-of-mouth promotion creates
    BUZZ.

40
Word of Mouth Marketing
  • Four different rules to produce good word of
    mouth marketing
  • Be interesting
  • Smart idea is always a key successful business
  • Find a megaphone via Blogs, YouTube, email
  • Build trust through emotional and excellent
    service CRM

41
Digital Marketing Innovations
  • One way to maintain competitive edge
  • Online communications
  • Search gets local (i.e. Google Maps)
  • Doing more with banners
  • In-game advertising (esp. FMCG)
  • Pay-per-text
  • E-mails with personality
  • Corporate blogging (more personal and informal)
  • Opening conversations among managers, staffs,
    teams, suppliers and customers.
  • Owning PR message
  • Promote CSR through Blogs

42
Axe Fantasy
Examples of Marketing Innovation
43
Stop Grow
Examples of Marketing Innovation
44
Fiat Ducato
Examples of Marketing Innovation
45
World Water Day
46
Bergmann Funeral Services
47
Distribution Strategies
  • Channels of distribution
  • Effects of the Internet on distribution strategies

48
Marketing Mix Distribution
49
Extended Marketing Mix- 8Ps
  • People
  • Job design/ job description
  • Selection
  • Training appraisal
  • Processes
  • Customer relationship management
  • Physical evidence
  • Partners

50
Zappos
  • Online Shoes, Bags, Accessories, etc
  • Deeply engage with customers and employees
  • Started in San Francisco (IT) ? move to Las Vegas
    (Hospitality)
  • Now current employees is 1,600
  • Pay employees to quit 1,000 (starting from 100
    ? 500 ?and now 1,000)
  • Company is bigger bigger? keep quality
  • 10 of new recruits quit
  • 4- week company culture/ value/ stress/
    commitment/ customer service training
  • One more week in Kentucky for warehouse and
    shipping
  • If not the right fit, company pays 1,000 bonus
    to quit
  • Extraordinary customer service

51
Zappos
  • Grow successfully because of Frontline
  • Lots responsibilities
  • No scripts
  • No time limit
  • Authorized from company to make customers satisfy

52
Zappos
  • Viral Marketing customer service
  • One customer bought 15 pairs of shoes for her
    mothers, 2 weeks return/refund policy.
  • Customer service sent e-mail to remind.
  • Found out that her mom was sick, and no time to
    send them back (UPS).
  • Customer service sent UPS to pick up with flowers
    and card for her mom
  • The customer post her appreciation on internet
    blog, within a week? viral
  • Brilliant PR

53
Blue Ocean Strategy
  • The reason of the appearance of the Blue Ocean
    Strategy
  • Increasing numbers of industries and supply
    exceeds demand
  • globalization
  • accelerated commoditization of products and
    services
  • increasing price wars
  • shrinking profit margins
  • brands are becoming more similar? select based
    on price

54
Red Ocean VS. Blue Ocean
55
BOS Logic Reconstruct market boundaries
Boundaries of Competition
Creating New Market Space
Head-to-Head Competition
56
Value innovation
  • It is a new way of thinking about and executing
    strategy that results in the creation of a blue
    ocean and a break from the competition.
  • The value-cost trade-off
  • either create greater value to the customers at
    higher cost or create reasonable value at a lower
    cost.
  • BOS pursues differentiation and low cost
    simultaneously.

57
Value Innovation
  • Four elements
  • Eliminate
  • Reduce
  • Raise
  • Create
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