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Transcript of Strategy model types1
The MAANZ MXpress Program
Planning and Strategy Model TypesPart 1
Dr Brian Monger
Copyright January 2013. This Power Point program and the associated documents remain the intellectual property and the copyright of the author and of The Marketing Association of Australia and New Zealand Inc. These notes may be used only for personal study associated with in the above referenced course and not in any
education or training program. Persons and/or corporations wishing to use these notes for any other purpose should contact MAANZ for written permission.
MAANZ International
• MAANZ International, is a Not for Profit, internet based professional and educational
institute which has operated for over 25 years.
• MAANZ International offers Professional Memberships;
• Marketing Courses (Formal and Short)• And Marketing Publications
• www.marketing.org.au
Marketing In Black and White 2
Dr. Brian Monger
• Brian Monger is the CEO of MAANZ International and a Professional marketer and consultant with over 40 years
experience.
Marketing In Black and White 3
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Strategic Planning
• Strategic planning = the “managerial process of developing andmaintaining a viable fit between the organisation’s objectives, skills,and resources and its changing market opportunities.”
• Two key elements of strategic planning are:
‐ The preparation of a SWOT analysis,‐ The establishment of strategic objectives.
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Elements of a solid business planning process
• The major elements of a business planning process include the following:
– Defining the value proposition– Framing the market opportunity– Detailing how to reach customers
– Developing an implementation plan– Evaluating potential external influences
– Articulating the revenue model– Calculating preliminary financial projections
– Establishing critical milestones– Summarizing the advantage
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Michael Porter on the Internet• ‘The key question is not whether to deploy
Internet technology – companies have no choice if they want to stay competitive – but
how to deploy it.’
Porter, M. (2001) Strategy and the Internet, Harvard Business Review,March 2001, 62–78.
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Influences on eMarketing strategy
Figure 1 Internal and external influences on Internet marketing strategy
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Overview of the eMarketing Planning Process
• How can information technologies assist marketers in building revenues and market share or lowering costs?
• How can firms identify a sustainable competitive advantage with the Internet when so little is understood about how to succeed?
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Overview of the eMarketing Planning Process
• The best firms have clear visions that they translate, through the marketing process, from eBusiness objectives and strategies into eMarketing goals and well‐executed
strategies and tactics for achieving those goals.
• This marketing process entails three steps:‐ Marketing plan creation, ‐ Plan implementation,
‐ Evaluation/corrective action.
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Creating an eMarketing Plan
• eMarketing plan: It is a guiding, dynamic document that links the firm’s eBusiness strategy (eBusiness model) with technology‐driven marketing strategies and lays out
details for plan implementation through marketing management.
• The eMarketing plan serves as a roadmap to guide the direction of the firm, allocate resources, and make tough decisions at critical junctures.
• There are two common types of eMarketing plans:‐ The napkin plan,‐ The venture capital plan.
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P
Legal - Ethical Technology Competition Other factors
E-Business Strategy/
Model
Performance Metrics
SWOT
E-Marketing Plan
E-Marketing Strategy
Implementation Marketing Mix/CRM
Markets
Internet E
S
Exhibit 3 - 1 E-Marketing Plan – Strategy Formulation and Implementation
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The Napkin Plan
• Dot‐com entrepreneurs were known to simply jot their ideas on a napkin over lunch and then run off to find financing.
• The big firm version of this is the just‐do‐it. An employee has an idea, and convinces management to just do it.
• These plans sometimes work and are sometimes even necessary but they are not recommended when substantial resources are involved. Sound planning and thoughtful implementation are needed for long‐term success in business.
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The Venture Capital eMarketing Plan
• Small to mid‐sized firms and entrepreneurs with start‐up ideas usually begin with anapkin plan without going through the entire traditional marketing planning process.
• BUT as the firm grows and needs capital, it has to put together a comprehensiveeMarketing plan.
• Where does an entrepreneur go for capital?‐ Sometimes bank loans,‐ Most of the time, it is equity financed,‐ Private funds (friends and family),‐ Angel investors,‐ Venture capitalists.
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The Venture Capital eMarketing Plan
• Investors are looking for a well‐composed business plan, and more importantly, a goodteam to implement it.
• The business plan should contain enough data and logic to prove that:
– The eBusiness idea is solid,
– The entrepreneur has some idea of how to run the business.
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The Venture Capital eMarketing Plan
• 9 questions that every business plan should answer:
1. Who is the new venture’s customer?
2. How does the customer make decisions about buying this product orservice?
3. To what degree is the value offer a compelling purchase for thecustomer?
4. How will the value offer be priced?
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The Venture Capital eMarketing Plan
• 9 questions that every business plan should answer:
5. How will the venture reach all the identified customer segments?6. How much does it cost (in time and resources) to acquire a customer?7. How much does it cost to produce and deliver the product or service?8. How much does it cost to support a customer?9. How easy is it to retain a customer?
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The Venture Capital eMarketing Plan
• VCs look for a way to get their money and profits out of the venture within afew years:‐ The golden exit plan is to go public and issue stock in an initial public offering
(IPO),‐ As soon as the stock price rises sufficiently, the VC cashes out and moves on to
another investment.
• All VCs’ investments are not successful. But if even one out of 20 is anAmazon.com, the risk was well worth the reward.
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Step 2—Link eBusiness with eMarketing Strategy
• Marketers need to:
1 Review the marketing and eBusiness plans,
2 Conduct a strategic planning to help achieve the firm’s eBusiness goals+ define potential revenue streams,
3 Create supporting eMarketing strategy for the eBusiness goals:
A Tier one strategy: marketers design segmentation, targeting,differentiation, and positioning strategies,
B Tier two strategy deals with the 4P’s and relationship management bycreating strategies around the offer (product), value (pricing), distribution(place), and communication (promotion),
4 Further, marketers design customer and partner relationship strategies(CRM/PRM).
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Segmentation
Targeting
Value
Differentiation
CRM/PRM
Positioning
Communication
Distribution
Offer
E-MarketingStrategyTier 2
tasks
Tier 1tasks
Exhibit 3 - 1 Formulating E-Marketing Strategy in Two Tiers
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Tier One eMarketing Strategic Planning: Segmenting & targeting
• Market opportunity analysis (MOA):
• The demand analysis = market segmentation analyses to describe and evaluate the potential profitability, sustainability, accessibility, and size of various potential
segments.•
• The segment analysis in the B2C market with demographic characteristics, geographic location, selected psychographic, and past behavior toward the
descriptors help firms identify potentially attractive markets.
Allows the firm to select its target market and understand its characteristics, behavior, and desires in the firm’s product category.
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Tier One eMarketing Strategic Planning: Segmenting & targeting
• Tools:• ‐ Traditional segmentation analyses.
• Analyzes of customer bases using cookies, database analyses, and other techniques,• Supply analysis: forecasts segment profitability + finds competitive advantages,
• Study of competition to find the firm own performance advantages.: strengths and weaknesses, eMarketing initiatives, …
• Identify future industry changes.
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Tier One eMarketing Strategic Planning: Identifying brand differentiation variables
and positioning strategies
• The understanding of the competition + the target(s) Differentiation of the products to provide benefits perceived as important by the target.
• The positioning statement: the desired image for the brand relative to the competition.
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Tier Two eMarketing Strategic Planning
• The two Tiers are elaborated in an interative process:
• It is difficult to know what the brand position should be without understanding the offer that comprises the brand promise.
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Stages in Internet development
Figure 3 A simple framework for Internet marketing strategy development
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Strategy development process
Figure 4 A ten-step strategic marketing planning processSource: McDonald, 1999
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Dynamic strategy model
Figure 5 Dynamic eBusiness strategy modelSource: Adapted from description in Kalakota and Robinson (2000)
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eBusiness strategy model1. Web presence 2. E-commerce 3. Integrated
e-commerce4. eBusiness
Services available Brochureware or interaction with product catalogues and customer
service
Transactional e-commerce on buy-side or sell-side. Systems
often not integrated
Buy and sell-side integrated with ERP or legacy systems. Personalisation of services
Full integration between all internal organisational
processes and elements of the value network
Organisational scope Departments acting independently, e.g. marketing department, IS
department
Co-ordination through steering committee or e-
commerce manager
Cross-organisational Across the enterprise and beyond (extraprise)
Transformation Technological infrastructure Technology and new responsibilities identified for
e-commerce
Internal business processes and firm structure
Change to eBusiness culture, linking of business processes
with partners
Strategy Limited Sell-side e-commerce strategy, not well integrated with
business strategy
E-commerce strategy integrated with business
strategy using a value-chain approach
eBusiness strategy incorporated as part of
business strategy
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Stage models(Quelch and Klein (1996))
Figure 6 Levels of web site development in: (a) the information to transaction model and (b) the transaction to information model of Quelch and Klein (1996)
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How Does a Firm Develop an Online Offering?
single product category
several product categories
Identifyscope of offering
problem recognition
information search
evaluation of alternatives
purchase decision
satisfaction
Loyalty
Disposal
Identify customerdecision process
purchase-decision cycle
egg diagram
Map offering tocustomer decision process
Online Offering
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What Is a Successful Resource System?
• Modifications to the activity system logic for the online marketplace
– Shift from physical world to virtual and back to physical world
– Shift from a supply‐side focus to a demand‐side focus
– Shift from activities to capabilities– Shift from single to multifirm systems
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Specifying a Resource System• Step 1: Identify core benefits in the value cluster
• Step 2: Identify capabilities that relate to each benefit• Step 3: Link resources to each capabilities
• Step 4: Identify to what degree the firm can deliver each capability• Step 5: Identify partners who can complete capabilities
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Criteria to Assess the Quality of a Resource System
• Uniqueness of the system• Links between capabilities and benefits• Links among capabilities in the system
• Links among resources• Links between virtual world and physical
world business systems• Sustainable advantage
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A Six‐Step eMarketing Plan Step Tasks Situation analysis Review the firm’s environmental and SWOT analyses.
Review the existing marketing plan and any other informationthat can be obtained about the company and its brands.
Review the firm’s e-business objectives, strategies, andperformance metrics.
Link e-business withe-marketing strategy
Identify revenue streams suggested by e-business modelsTier 1• Perform Marketing Opportunity Analysis to identify
target stakeholders.Specify brand differentiation variables.Select positioning strategy.Tier 2Design the offer, value, distribution, communication, andmarket/partner relationship management strategies.
Objectives Identify general goals.Select target specific goals.
Implementation plan Design e-marketing mix tactics.• product/service offering• pricing/valuation• distribution/supply chain• integrated communication mixDesign relationship management tactics.Design information gathering tactics.Design organizational structures for implementing the plan.
Budget Forecast revenues.Evaluate costs to reach goals.
Evaluation plan Identify appropriate performance metrics.Exhibit 3 - 1 Marketing Plan Process
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Step 1—Situation Analysis
• Planning for eMarketing does not mean starting from scratch but working with existing business, eBusiness, and marketing plans is an excellent place to start.
Opportunities Threats• Hispanic markets growing and
untapped in our industry.• Save postage costs through e-mail
marketing.
Pending security law means costly softwareupgrades.Competitor X is aggressively using e-commerce.
Strengths Weaknesses1. Strong customer service department.2. Excellent Web site and database
system.
1. Low tech corporate culture2. Seasonal business: peak is summer
months.E-business Goal: Initiate e-commerce in within one year.Metric: Generate $500,000 in revenues from e-commerce during the first year.
Exhibit 3 - 1 SWOT, Objective, and Metric Example from E-Business Plan
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Step 1—Situation Analysis
• The organizational eBusiness plan: SWOT analysis => eBusiness strategy.
• The marketing plan: gathers information about the firm’s products, the markets currently served,and so forth.
• The distribution plan: identifies areas where the products are currently sold and suggestsgeographic gaps that might be receptive to e‐commerce.
• Promotion plan information: gives clues about how the Internet fits with the firm’s currentadvertising, sales promotion, and other marketing communications.
• The firm and brand positioning in the marketplace: Internet planners must decide how closelyWeb site content and promotion will follow current positioning strategies.
• The marketer moves to strategy formulation.
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Environment, Strategy, and Performance (ESP)
• Business environment: legal, technological, competitive, market‐related, and otherenvironmental factors external to the firm = Opportunities and Threats,
• SWOT analyses = Strengths and Weaknesses,
• eBusiness strategies + eBusiness models + eMarketing plans = Help the firm accomplish its overall goals,
• Determine the success of the strategies and plans by measuring results.
= Performance metrics, specific measures designed to evaluate the effectiveness and efficiency of the eBusiness and eMarketing
operations.
37
P
Legal - Ethical Technology Competition Other factors
E-Business Strategy/
Model
Performance Metrics
SWOT
E-Marketing Plan
E-Marketing Strategy
Implementation Marketing Mix/CRM
Markets
Internet E
S
Exhibit 1 - 1 E-Marketing in Context: the ESP Model
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Assessing demand
• Need to assess:1. Access to Internet
2. Proportion of customers influenced by channel
3. Proportion of customers who buy direct
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Porter’s five forces
Power ofsuppliers
Bargainingpowers ofcustomers
Extent of rivalrybetween
competitors
Threat ofsubsitutes
Threat of newentrants
The business
Figure 7
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Example objectives• Achieve 10 per cent online revenue contribution within two years;
• achieve first or second position in category penetration in the countries within which we operate (this is effectively online market share and can be measured through visitor rankings
such as Hitwise (Chapter 2) or better by online revenue share;• cost reduction of 10 per cent in marketing communications within two years;
• increase retention of customers by 10 per cent;• increase by 20 per cent within one year the number of sales arising from a certain target
market, e.g. 18–25‐year‐olds;• create value‐added customer services not available currently;
• improve customer service by providing a response to a query within two hours, 24 hours per day, seven days a week;
• all other objectives to be achieved profitably giving a return on investment in a three year period.
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Marketing‐led design objectives• Customer acquisition– Proposition, recruitment offer
• Conversion– Engage first time visitors
– Clear call‐to‐action• Customer retention
– Content and offers should encourage repeat visitors• Service quality
• Branding– To reassure
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Risk/reward analysis
Figure 8 Example of risk–reward analysis
• For more information about MAANZ International and articles about Marketing, visit:
• www.marketing.org.au• http://smartamarketing.wordpress.com• http://smartamarketing2.wordpress.com
• . http://www.linkedin.com/groups/MAANZ‐SmartaMarketing‐Group‐2650856/about
• Email: [email protected]
• Link to this site ‐ ‐ http://www.slideshare.net/bmonger for further presentations
Marketing In Black and White 43
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END
MAANZ MXPress Program