Building Competitiveness via Marketing Kirk Smith 19 January 2013
Session Topics • Who are your competitors…really? • How do customers choose between options? • Building a marketing strategy (STP) • Branding considerations • Free-form marketing Q&A (time allowing)
2013 Jaguar XK Convertible $138,000
2013 Subaru Legacy $20,295
2013 Dodge Durango SXT $29,495
1987 Dodge Ram 1500 2WD $750.00
Topic 1 Review Who are your competitors?
What sort of person might buy the Jag, the Subaru, the Dodge, or the beater truck?
So… Different sorts of people (or companies) want different sorts of things from the same product category.
Or, in marketing lingo… Preferences are segment-specific.
Timeout: What if you try to create a product (or service) that appeals to everybody?
Next Topic: How do customers choose one product over the other?
On one flip chart page, list your: • Vehicle • A couple of competitive vehicles • A couple of possible segments • Pick a target segment • List of reasons someone from that target might choose your vehicle
How does your own organization (or this one, if you wish) create value for customers in one of your key target markets?
A dollar does not always equal a dollar… • I will cut my own grass to save $15, but I won’t cut my neighbor’s to make $15. • Benefit dollars don’t always equal cost avoidance dollars.
Communication can drive the decision On a scale of 1-7 with 1 “not likely at all” and 7 “very likely,” how likely would you be to buy one pound of 80% lean hamburger for $2.49?
Something else to consider… • I will drive 10 miles to a store that has a car stereo on sale for $120 instead of buying the identical item for $140 at the store just down the street. Why? • I will not drive 10 miles to the same electronics store to buy a giant LED HDTV for $4520 if I can buy it at the close store for $4540.
Prospect Theory insights for how the Steelheads should present • Their benefits and costs And refer to • The competition’s benefits and costs
Timeout: Other Non-Marketing(?) Applications • Performance Reviews • Sales Negotiations • Employee Benefits Increased/Decreased
To Summarize… • Value = perceived benefits – perceived costs • Losses loom larger than gains • Value estimates are relative to the starting point • People naturally keep mental accounts.
Timeout: Commoditization What happens to perceived value as a market slips towards a commodity?
Source: “Fighting Commoditization….” by KamranKashani, in Perspectives for Managers, Oct 2006.
Another Timeout: What if your product is a service? What is good service?
Service Benefits (Quality) • Tangibles • Reliability • Responsiveness • Assurance • Empathy
Topic 2 Review: How do customers choose between options?
Two Questions: • What is position in marketing terms? • How does perception of value relate to position?
Two factors influence position • Physical attributes: What’s really there • Your marketing message: What you say is there
A Note About Physical Attributes and Competitive Advantage: • You don’t have to be best at absolutely everything to succeed long term… • You do have to be perceived best at something your target market feels is very important and “in the game” everywhere else that matters
The tactics trap at work: Segment, then target, then position
Topic 3 Review: Building a Marketing Strategy
Brand Considerations • Do you want a brand name or should you go generic? • What are the two basic options for brand names? • Should you use the family (or umbrella) brand or create a stand-alone brand?
How can tactical marketing skill create sustainable competitive advantage for your organization?
Topic 4 Review: Branding
Where have we been? • What’s your competition? • How customers choose: value • Segment, then target, then position • Branding