Silicon Cloud - Your Marketing Strategy

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Information about Silicon Cloud - Your Marketing Strategy
Business & Mgmt

Published on March 5, 2014

Author: digitalinsurance


Your Marketing strategy!

Your Key Take Away •  Many  CEOs  are  ques/oning  the  value  of  their  marke/ng  departments.   •  Few  companies  have  chief  marke/ng  officers  who  are  ranked  as  high  as   CFOs.   •  Marke/ng  departments  historically  have  focused  narrowly  on  tac/cs  rather   than  strategy.   •  “Market  driving”  companies  transform  their  industries  with  completely   new  products  or  distribu/on  systems.   •  None  of  Wal-­‐Mart’s  original  top  10  compe/tors  are  s/ll  in  business.   •  Tradi/onal  marke/ng  is  the  process  of  dis/nguishing  your  product  from  the   compe//on’s  in  the  customer’s  mind.   •  “Product  agnos/c”  marketers  some/mes  recommend  compe/tors’   products  to  solve  customers’  problems,  but  being  neutral  about  products  is   hard  for  marketers.   •  Some  new  distribu/on  channels  complement  old  ones,  while  others,  such   as  music  downloads  on  the  Internet,  replace  them.   •  Brand  prolifera/on  confuses  customers.  Today’s  trend  is  to  consolidate.   •  Salespeople  can’t  just  sell.  They  must  become  consultants  and  industry   experts.   We  hope  this  guide  helps  you.  If  you  have  any  feedback  please  email              

Seven Steps To Transforming Marketing Many  CEOs  are  beginning  to  have  second  thoughts  about  the  value  of  their   marke/ng  departments.  Although  they  believe  marke/ng  is  important,  they   doubt  its  ability  to  produce  measurable  results  or  to  help  their  companies   aTain  strategic  goals.  Marke/ng  has  declined  in  pres/ge  during  the  past  20   years  as  markets  have  fragmented,  global  compe//on  has  increased,  and   customer  expecta/ons  have  risen.         Marketers  must  put  aside  their  /red  “4Ps”  –  price,  promo/on,  posi/on  and   placement–  and  reinvigorate  their  thinking.  They  cannot  just  sell  products   and  reach  out  to  new  distribu/on  partners.  They  must  discover  new  business   opportuni/es,  develop  their  brands,  improve  customer  service,  and  increase   efficiency.    

Seven Steps To Transforming Marketing Transform  yourself  from  a  marke/ng  tac/cian  to  a  strategist  by  making  these   seven  moves:     1.  “From  market  segments  to  strategic  segments”  –  Instead  of  thinking  in   terms  of  groups  of  customers  whom  you  can  reach  with  targeted  messages,   think  in  terms  of  groups  for  whom  you  can  create  value  with  both  marke/ng   and  non-­‐marke/ng  ac/vi/es.     2.  “From  selling  products  to  providing  solu/ons”  –  Customers  have  so  many   choices  available  that  differen/a/ng  your  product  from  others  is  nearly   impossible.  Even  when  you  develop  a  unique  product,  your  compe/tors  can   easily  copy  or  even  enhance  it.  Instead,  aTract  customers  by  demonstra/ng   how  your  product  can  fulfill  their  par/cular  needs.     3.  “From  declining  to  growing  distribu/on  channels”  –  Instead  of  locking   yourself  into  the  distribu/on  methods  you  have  always  used,  open  your  mind   to  new  ones.     4.  “From  branded  bulldozers  to  global  distribu/on  partners”  –  In  the  past,   retailers  were  small,  and  brands  could  require  retailers  to  accept  their  terms.   However,  the  balance  of  power  has  shi^ed.  Brands  must  learn  to  cooperate   with  enormous  retailers.    

Seven Steps To Transforming Marketing 5.  “From  brand  acquisi/ons  to  brand  ra/onaliza/on”  –  Instead  of  crea/ng   and  acquiring  new  brands,  differen/ate  the  strongest  ones  and  get  rid  of  the   others.     6.  “From  market-­‐driven  to  market-­‐driving”  –  Innova/on  does  not  necessarily   mean  developing  new  products.  Successful  innovators  create  new  concepts   that  “change  an  industry’s  rules  and  boundaries.”     7.  “From  strategic  business  unit  (SBU)  marke/ng  to  corporate  marke/ng”  –   Marketers  have  tended  to  think  in  the  short  term.  Instead,  align  marke/ng   efforts  with  the  “goals  and  overall  strategy  of  the  firm.”     Peter  Drucker  noted  back  in  1954  that  customers  are  the  basis  of  business.   Even  profits  are  secondary:  If  you  don’t  have  any  customers,  you  can  forget   about  profits.  In  “customer  capitalism,”  businesses  make  money  when  they   solidify  long-­‐term  customer  rela/onships.  Thus,  the  most  important   responsibility  of  the  marke/ng  department  is  to  maintain  the  company’s   focus  on  customers.      

The 4Ps versus the 3Vs Marke/ng  is  the  process  of  dis/nguishing  your  product  from  the   compe//on’s  offering  in  the  minds  of  your  customers.  The  tac/cal  arsenal   of  tradi/onal  marketers  consists  of  three  elements:     1.  Segmenta/on  –  Dividing  customers  into  groups.   2.  Targe/ng  –  Deciding  to  which  segments  you  will  sell  your  product.   3.  Posi/oning  –  Crea/ng  a  message  that  draws  a  response  from  your   target  segment.        

The 4Ps versus the 3Vs The  message  should  emphasize  customer  benefits,  not  product  features.  To   become  strategic  thinkers,  marketers  have  to  iden/fy  strategic  segments  –  a   somewhat  different  process  from  iden/fying  tradi/onal  marke/ng  segments.   In  strategic  segmenta/on,  marketers  must  think  not  of  the  4Ps  but  of  the   “3Vs”:     1.  “Valued  customer”  –  Whom  do  you  wish  to  serve?  For  example,  most   airlines,  although  they  do  some  outreach  to  all  travelers,  really  wish  to   capture  the  business-­‐traveler  market.  Since  these  travelers  are  not  spending   their  own  money,  they  are  willing  to  pay  for  more  services.  In  contrast,   discount  airlines,  such  as  easyJet,  pursue  leisure  travelers  and  entrepreneurs,   who  are  paying  for  their  /ckets  themselves  and  are  seeking  bargains.     2.  “Value  proposi/on”  –  What  do  your  valued  customers  want?  Value   proposi/ons  are  not  simply  marke/ng  statements;  they  affect  purchasing,   opera/ons  and  distribu/on.  For  example,  all  easyJet  customers  want  is   cheap,  safe,  reliable  transporta/on.  EasyJet  reimburses  passengers  if  a  flight   is  more  than  four  hours  late.  Otherwise,  it  comes  up  short  in  almost  every   tradi/onal  measure  of  airline  service:  Customers  do  not  receive  assigned   seats,  free  meals,  or  refundable  /ckets     3.  “Value  network”  –  What’s  the  best  way  to  deliver  the  product?  Since   easyJet  customers  will  sacrifice  convenience  for  cost,  the  company  does  not   use  travel  agents  or  issue  paper  /ckets.  It  sells  e-­‐/ckets  on  the  Internet.    

The 4Ps versus the 3Vs To  become  more  innova/ve,  ask  three  ques/ons  about  your  value   proposi/on:     1.  Do  some  customers  need  a  new  alterna/ve  or  are  some  simply  not   receiving  services?  –  Progressive  Insurance  targeted  high-­‐risk  individuals   whom  other  companies  refused  to  cover.     2.  Can  you  offer  more  benefits  or  cheaper  prices  than  anyone  else?  –  The   Zara  clothing  company  copies  designer  dresses,  and  gets  them  to  market   faster  and  more  cheaply  than  the  designers  themselves.     3.  Can  you  radically  redefine  the  value  network?  –  Dell  began  selling  its   computers  over  the  Internet  when  its  compe/tors  were  selling  in  stores.        

From Products to Solutions In  the  business-­‐to-­‐business  marketplace,  many  companies  began  selling   services  instead  of  products  alone.  By  becoming  “solu/on  providers,”  they   gained  leverage,  since  the  prices  of  services  are  more  difficult  to  compare   than  those  of  products.  Becoming  a  solu/on  provider  requires   transforma/onal  leadership,  cost  cumng,  culture  change,  and  a  focus  on   customers.       IBM  successfully  made  the  transi/on  from  selling  products  to  selling   solu/ons.  It  discovered  that  its  customers  wanted  linked  hardware  and   so^ware,  and  informa/on  technology  support.  So  IBM  devised  ver/cally   integrated  systems  to  help  customers  make  beTer  use  of  its  technology.   Other  computer  companies,  such  as  Microso^,  Cisco,  Compaq,  Sun  and   Unisys,  followed  IBM’s  successful  path.  They  adopted  such  changes  as  open   architecture,  unbundled  products  and  value-­‐based  pricing.  Their  salespeople   became  consultants.     Some/mes,  the  best  solu/ons  require  incorpora/ng  compe/ng  products  into   the  system  –  yet  becoming  neutral  about  products,  or  “product  agnos/c,”  is   par/cularly  challenging  for  marketers  whose  training  is  to  be  cheerleaders   for  their  company.      

Using New Channels The  prolifera/on  of  new  technology  and  distribu/on  channels  has   fundamentally  changed  the  ways  businesses  gain  customers  and  compete.   Some  new  channels  complement  old  ones,  but  others  replace  them.  When   listeners  began  downloading  music  from  the  Internet,  sales  of  CDs  and   casseTes  took  a  nosedive.       The  advent  of  giant  global  retailers,  which  can  demand  low  prices  from   suppliers,  has  accompanied  the  emergence  of  new  distribu/on  channels.   Small  retailers  may  be  unhappy  that  they  are  paying  more  than  larger  ones,   but  the  big  companies  buy  enormous  quan//es  and  require  less  service.  In   general,  manufacturers  forging  new  distribu/on  rela/onships  should  build   trust  and  maintain  transparency  about  price  differences.    

Brand Management Increasingly,  corpora/ons’  most  valuable  assets  are  intangible  ones,  such  as   brands.  In  the  1980s  and  1990s,  companies  created  and  acquired  more  and   more  brands,  thinking  that  if  one  was  good,  more  were  even  beTer.  The   prolifera/on  was  costly  and  confusing.  Companies  couldn’t  manage  their   numerous  brands  well.  Customers  couldn’t  differen/ate  between  them.   Some  brands  appealed  only  to  a  few  customers,  and  some  even  competed   against  one  another.  Procter  &  Gamble  discovered  that  out  of  its  250  brands,   the  top  10  accounted  for  half  of  its  sales.     Today’s  trend  is  brand  consolida/on  –  which  is  not  easy.  You  don’t  want  to   eliminate  customers  along  with  the  brands.  And,  of  course,  managers  whose   livelihoods  depend  on  a  brand  will  defend  it  vigorously.  To  reduce  your  brand   porrolio,  conduct  an  audit  to  get  factual  informa/on  about  how  your  brands   are  performing.  Weak  brands:     •  “Have  small  market  share.”   •  “Suffer  from  poor  or  nega/ve  profitability.”   •  “Consume  rather  than  contribute  to  cash  flow.”   •  “Lack  support  from  important  channel  members.”   •  “Exhaust  dispropor/onate  amounts  of  managerial  resources.”   •  “Add  liTle  strategic  value  to  the  firm.”     If  you  have  a  poorly  performing  brand,  sell  it,  delist  it,  merge  it  into  another   brand  or  stop  funding  its  marke/ng.          

Drive the Market before It Drives You Some  companies  have  developed  radical  innova/ons  to  move  ahead.   The  Body  Shop,  CNN,  Starbucks  and  Swatch  are  “market-­‐driving”  rather   than  “market-­‐driven”  companies.         Their  visionary  CEOs  created  unconven/onal  business  models  that   eventually  made  the  compe//on  obsolete.  Wal-­‐Mart  grew  so   drama/cally  that  none  of  the  top  10  compe/tors  it  faced  when  it  was   founded  in  1962  is  s/ll  in  business  today.       Market-­‐driving  companies  create  new  value  proposi/ons  by  offering   unique  value  networks  and  new  benefits  at  lower  prices.  For  example,   IKEA  offers  sleek  Scandinavian  furniture,  variety  and  good  value  in  a   pleasant  atmosphere.  Its  value  network  incorporates  interchangeable   parts,  in-­‐house  design,  high-­‐volume  manufacturing,  computerized   logis/cs  and  appealing  displays.  Customers  pick  up  and  assemble  their   own  merchandise,  keeping  costs  low.        

Drive the Market before It Drives You Market-­‐driving  companies  have  these  common  characteris/cs,  which  set   them  apart  from  tradi/onal  companies:     •  They  rely  on  vision  rather  than  market  research.   •  They  aTract  customers  from  a  variety  of  market  segments.  For  example,   Swatch  sells  low-­‐cost,  high-­‐fashion  watches.   •  They  create  new,  lower  price  points  for  quality  and  service,  and  educate   their  customers  about  the  value  of  their  offerings.   •  They  develop  new  channels  and  logis/cs.  FedEx  uses  its  own  planes  in  a   “hub  and  spoke”  configura/on,  while  BeneTon  knits  its  products  before   dyeing  them  so  it  can  respond  more  quickly  to  customer  color  demands.   •  They  grow  through  posi/ve  customer  word-­‐of-­‐mouth.    

Drive the Market before It Drives You Large  companies  face  four  cultural  problems  that  make  compe/ng  with   market-­‐driving  companies  difficult:     1.  Innova/ve  companies  challenge  tradi/onal  assump/ons,  while  established   companies  o^en  cannot  accommodate  new  ideas.  Instead,  they  tend  to   dismiss  unconven/onal  approaches.     2.  Established  companies  are  risk-­‐averse  and  do  not  reward  innovators  who   produce  profitable  new  ideas.  Instead,  they  remember  the  good  ideas  that   failed.     3.  They  prefer  to  grow  by  small  advances  rather  than  drama/c  new  ones.   Incremental  steps  enable  them  to  hang  on  to  their  suppliers,  customers  and   research-­‐and  development  departments,  while  new  ini/a/ves  require   change.     4.  They  have  a  vested  interest  in  preserving  their  industries.  Because  IBM   had  poured  so  many  resources  into  mainframes,  it  avoided  personal   computers.  Similarly,  GM  and  Ford  entered  the  market  for  minivans  late   because  they  were  already  selling  sta/on  wagons.      

Drive the Market before It Drives You Becoming  a  market  driver  requires  taking  risks  and  rewarding  crea/vity.  Start   by  iden/fying  internal  entrepreneurs,  selling  new  ideas  company-­‐wide  and   implemen/ng  them  with  teams.  Nissan  Design  reaches  for  innova/on  and   crea/vity  by  including  different  personality  types,  such  as  engineers  and   crea/ves,  on  the  same  team.  IBM  and  Motorola  use  compe//on  to  s/mulate   innova/on,  since  no  one  knows  which  new  technology  consumers  will   eventually  accept.    

Thank You We  hope  this  guide  helps  you.  If  you  have  any  feedback  please  email         SiliconCloud    

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