Старо и златно - Philip Kotler - Sofia, Lecture 11.14.07

Marketing for Results:
How to Compete and Win in the
Global Marketplace
p
• Philip Kotler, Ph.D
• Kellogg School of
Management
• Northwestern University

• BGBusiness Ltd.
• Sofia Bulgaria
Sofia,
• November 14, 2007

Two Challenges Facing
Your Company
1. Will your company be able to defend your market against the
invasion of foreign global brands?

2. Can your company develop strong local, national, regional or global
brands?

Can Your Company
Defend the Domestic Market?
• Foreign competitors will not only go after the high end market. They will
target the middle and eventually the low end.

• The main defense for your company will be developing stronger skills in
innovation, differentiation, branding, and service. In a word, MARKETING!

• The issue is that your company is cutting its expenses when it should be
strengthening its marketing and sales resources.

But Your Businesses Needs
A Better Understanding of Marketing
• Focus first on your customers, second on your employees, third on your partners,
and fourth on your competitors.
• Don’t think of marketing to being the same as advertising and selling.
g g g g
• Don’t over-spend on advertising. The quality of your advertising is more important
than its quantity.
• Use market research to guide your strategy.
• Focus on a part of the market where you can deliver superior value through
differentiation and relevance.
• Avoid lowering your price to defend your market share. It is better to increase
benefits.

The Strategic Trajectory
for a Country

• Low cost, average quality domestic products.
• Low cost, good quality d
L t d lit domestic products.
ti d t
• High-end products made for other companies.
• Branded products (regional).
• Branded products (global).
• Branded dominant brands (global).

Outline of Seminar
1. Improving Marketing’s Role and Relationships in the
Company

2. Finding New Opportunities

3. Finding New Ways to Communicate

4. Using New Technologies and Measuring Results

1. Improving Marketing’s Role and
Relationships in the Company

Job Positions in Today’s
Marketing Organization
• Chief Marketing Officer (CMO)
• Marketing Vice President
• Brand managers
• Category managers
• Market segment managers
• Distribution channel managers
• Pricing managers
• Marketing communication managers
• Database managers
D t b
• Direct marketers
• Internet managers
• Marketing public relations manager
• Global, regional and local marketing managers
• Marketing analysts
• Marketing researchers
• Marketing intelligence gatherers

Winning Through
Stakeholder Value Creation - 1
• Jim Collins in Good to Great defined “great” companies by
identifying the top financial performers and their characteristics
characteristics.

• Jag Sheth* and his coauthors defined “great” companies by
identifying the most humanistic companies (asking people which
companies they “loved”) and which companies treated well their five
stakeholder groups: SPICE = society, partners, investors,
community, and employees.

• The Firms of Endearment were:
– amazon, Best Buy, BMW, CarMax, Caterpillar, Commerce Bank, Container
Store, Costco, eBay, Google, Harley-Davidson, H d IDEO IKEA J tBl
St C t B G l H l D id Honda, IDEO, IKEA, JetBlue
Johnson&Johnson, Jordan's Furniture, LLBean, New Balance, Patagonia,
Progressive Insurance, REI, Southwest, Starbucks, Timberland, Toyota, Trader
Joe's, UPS, Wegmans, Whole Foods.

• Sheth was surprised that these companies financially outperformed
the outstanding performance of Collins’ companies.

Source: Raj Sisodia, David B. Wolfe, and Jag Sheth, Firms of Endearment: How World-Class
Companies Profit from Passion and Purpose (Wharton School Publishing, 2007)

Winning Through
Stakeholder Value Creation - 2
• These Firms of Endearment shared the following characteristics:
– They align the interests of all stakeholder groups
– Their executive salaries are relatively modest
– They operate an open door p y to reach top management
y p p policy p g
– Their employee compensation and benefits are high for the category; their
employee training is longer; and their employee turnover is lower
– They hire people who are passionate about customers
– They view suppliers as true partners who collaborate in improving productivity
and quality and lowering costs
– They believe that their corporate culture is their greatest asset and primary
source of competitive advantage.
– Their marketing costs are much lower than their peers while customer
satisfaction and retention is much higher.

• Their marketing is about:
– Triggering great word of mouth rather than heavy brand advertising (Google and
Starbucks did no advertising)
– They do not rely on frequent sales or heavy promotion

• Sheth, et al, offers this as a 21st century paradigm for marketing as opposed
to the traditional 20th century paradigm which they characterize as
aggressive and manipulative.

What are the main obstacles to connecting
marketing throughout your organization?
Rank

1 Too few resources to deliver against objectives

2 Shortage of good talent in the marketing group

3 Lack of trust and credibility with the rest of the organization

4 Unable to communicate a clear, consistent message to the
entire organization
5 Lack of innovation in finding new ways to better connect
marketing
6 Lack of support from upper management

7 Marketing does not have a clear strategy platform to
convey to the rest of the organization

Source: Spencer Stuart

If You Are Appointed CMO, You Want Your
Office To Be Located Next To:

1. CEO office

2. CFO office

3. CTO office

4.
4 CIO office
ffi

5.
5 VPS office

What is a CMO Expected to Do?

1.
1 Monitor the evolving consumer landscape represent the voice of the
landscape,
customer (VOC), and champion the development of a strong customer-
orientation to build customer loyalty/retention.

2. Gather customer insights to help develop new products and services
for achieving growth objectives.

3. Be the steward of the corporate brand and branding practice.

4.
4 Upgrade marketing technology and skills in the company
company.

5. Measure and account for marketing financial performance and contain
media and other service costs
costs.

6. Bring insight into the corporate portfolio and synergies.

Some Statements by CMOs
• What
Wh surprised Ci d Carter C Cast most when h b
h he became CMO was “ h I “that
would interact so much with functions outside of marketing. I didn’t
realize it is a holistic assignment. Then I realized I really had to
understand things like product supply, cost break-evens and
accounting.” CMO and later CEO of WalMart.com, Carter Cast

• “You want to be connecting at the very senior levels of the
organization, and you also want to be connecting in with the
engineers and scientists who are d i a l t of th work on th f t
i d i ti t h doing lot f the k the front
lines… You have to figure out how pull all those instruments
together in a way that’s delivering great marketing accountability and
engaging marketing programs.” Yahoo CMO Cammie Dunaway

Sales Precedes Marketing
• In the beginning there was sales.

• Marketing appeared later to help sales people:
– By using marketing research to size and segment the market
– By using communications to build the brand and develop
collateral materials
– By finding leads through direct marketing and trade shows

• Marketing was originally located in the sales department.

• Then marketing grew as a separate department responsible for
the marketing plan (4Ps) and brand-building.

Differences in Mindset and Style

• Marketing
M k ti • Sales
S l

• Profit oriented • Volume oriented
• Data oriented • Action oriented
• Analytical • Intuitive
• Likes planning • Prefers doing
• Team-oriented • Individualistic
• MBA educated
d t d • Undergraduate and “ t t
U d d t d “street
• Focused on whole market and smart”
market segments
g • Focused on each customer

Perceptions of Each Other
Key Task Marketing Perception of Sales Perception of
Sales Marketing

Strategy Setting Marketing feels under-appreciated, views Sales feel indispensable,
sales as self-serving and short sighted views marketers as ivory
tower strategists who don t
don’t
really understand customers
or the pressures of selling in a
difficult environment

Messaging “Salespeople ignore corporate branding
Salespeople “Corporate messages and
Corporate
and positioning standards.” Underutilize generic sales collateral aren’t
leads. helpful in closing orders.
Leads aren’t qualified

Market Information Marketing complains about the lack of Sales believes that marketing
feedback from sales doesn’t listen or understand
the complexities of the sales
process

Identify the Existing Level of Relationship
y g p
Hypothesis:
The integration of sales and marketing tends to progress through four distinct
stages or levels of complexity.

Undefined Defined Aligned Integrated

The Sales Funnel

Purchase Purchase Loyalty Customer
Intention Advocacy

Prospecting Qualifying Defining Developing Proposal Revision & Contract Implemen
Needs Solutions Preparation/ Issue Negotiation -tation
Presentation Resolution

The Marketing and Sales Funnel

Customer Brand Brand Brand Purchase Purchase Loyalty Customer
Awareness Awareness Consider- Preference Intention Advocacy
ation

Handoff Sales
Marketing

Eight Ways to Improve
Marketing/Sales Alignment
1. Hold regularly scheduled meetings between marketing and sales.
2. Make it easier for marketing and sales people to communicate with
each other.
3. Arrange for more joint work assignments and job rotation between
marketing and sales p p
g people.
4. Appoint a liason person from marketing to live with the sales force
and help marketers understand sales problems better.
5.
5 Locate the marketing and sales people in the same building or
location to maximize their encounters.
6. Set shared revenue objectives and reward systems.
7.
7 Define more carefully the steps in the marketing/sales f nnel
caref ll funnel.
8. Improve sales force feedback.

2. Finding New Opportunities
g pp

Three Innovation Models
• Whirlpool Corporation launched an effort in 2000 to stimulate greater
innovation.
innovation The company trained 400 employees from a wide variety of
functions in a new process of “ideation.” Since the initiative began,
Whirlpool has gone from a handful of product introductions per year to
dozens, including the highly successful Gladiator line of appliances,
workbenches,
workbenches and storage systems for the garage.
garage

• Shell, in 1996, authorized a team of its employees to allocate $20
million to rule-breaking ideas originating anywhere in the company.
rule breaking
Any employee can make a 10-minute pitch followed by 15-minute Q&A.
Greenlight ideas get an average of $100,000 and up to $600,000. 4
teams out of 12 received 6 month funding for next stage development.
Of Shell s 5 largest growth initiatives in 1999 4 started this way.
Shell’s 1999, way

• Samsung Electronics established the Value Innovation Program (VIP)
Center in 1998. Core cross-functional team members come together to
g
discuss their strategic projects. In 2003, the center completed eighty
projects. Samsung runs an annual Value Innovation conference and
awards are given for the best cases.

Eight Ways to Get Ideas
From Customers
1.
1 Observe h
Ob how your customers are using your product.
i d
2. Ask your customers about their problems with your products.
3.
3 Ask your customers about their dream products
products.
4. Use a customer advisory board to comment on your company’s
ideas.
5. Use websites for new ideas.
6. Form a brand community of enthusiasts who discuss your product.
7.
7 Encourage or challenge your customers to change or improve your
product.
8. Let the users manufacture all the content.

Differentiation: One Answer
• Many categories are b
M t i becoming commoditized.
i diti d

• Yet Ted Levitt said that “anything can be differentiated.”
y g
– Chicken (Purdue), bricks (Acme), coffee (Starbucks), cement (Cemex),
vodka (Absolut)

• Jack Trout, in his Differentiate or Die: Survival in Our Era of Killer
Competition, describes many ways to differentiate.

• Differentiation can be psychological as well as functional (Marlboro
cigarettes).
– P&G s Folger s
P&G’s Folger’s Instant Coffee: Flaked Crystals
– Frank Perdue’s Chicken: Yellow Flesh
– Alberto-Culver’s Natural Silk Shampoo: Silk

Using Blue Ocean Strategy
• Leave the red ocean of intense competition and capture a blue ocean of uncontested market
space.

• The key is value innovation.
y
– This differs from value creation which might be incremental or technological innovation which
leads to a Philips’ CD-I that could do too much and is difficult to understand.
– The goal is to find find a way to increase buyer value while reducing costs. It breaks the
value-cost tradeoff. Example: Cirque du Soleil.
– Th value innovation amounts to a new strategy that affects the entire system of a
The l i ti t t t t th t ff t th ti t f
company’s activities.

• Start with a strategy canvas. The horizontal axis captures the range of factors the industry
competes on and invests in. The vertical axis captures the offering level that buyers receive
across all the key competing factors (high to low).
– The wine industry has two groups: premium wines and budget wines. The value curves are
of the two are different. The problem is that most premium wines are similar in their value
curves and most budget wines are similar in their value curves.

• The challenge is to find a new value curve to escape from the red ocean. Use the four action
framework:
– What factors to eliminate? (cost goes down)
– What factors to reduce well below the industry’s standard? (cost goes down)
industry s
– What factors to raise well above the industry’s standard? (differentiation goes up)
– What new factors to add that the industry has never offered? (differentiation goes up)

Source: W. Chan Kim and Renee Mauborgne, Blue Ocean Strategy (Harvard Business
School, 2005).

Creating Cirque du Soleil
Eliminate
Eli i t Raise
R i

Star performers Unique venue
Animal shows
Aisle concession sales
Multiple show arenas

Reduce Create

Fun and humor Theme
Thrill and danger Refined environment
Multiple
M lti l productions
d ti
Artistic music and dance

Source: Blue Ocean Strategy, p. 36.

Reconstruct Market Boundaries Through
a Six Paths Framework - 1
1. Look across alternative industries
• NetJets (neither commercial or plane ownership)
• NTT’s D C M ( h
NTT’ DoCoMo (phone and easy Internet)
d I t t)
• Home Depot (products and craft advice)

2. Look across strategic groups within industries
• Curves (health club or home exercise)
• Walkman (boom box or transistor radio)
• Toyota Lexus (a Mercedes at Cadillac prices)
• Ralph Lauren (high fashion or no fashion)
• Champion Enterprises (pre-fabs vs. on-site developers)

Six Paths Framework - 2
3. Look across the chain of buyers
– Change from conventional target user: purchasers, users,
influencers
– Nova Nordisk (focused on insulin users rather than doctor)
– Bloomberg (focused on users rather than IT industry)
– Canon (small copiers for homes, not companies)

4. Look across complementary product and
service offerings
– NABI (Hungarian bus company brought down long term costs)
– Barnes & Noble book stores
– Zeneca’s Salick cancer centers (combine all treatments in one
place)
l )

Six Path Framework - 3
5. Look
5 L k across f
functional or emotional appeals to
ti l ti l l t
buyers
• Swatch (from function to emotion)
• Body Shop (from emotion to function)
• QB House (Asian barbershop…from emotion to function)
• Cemex ( lli a d
C (selling dream i t d of cement)
instead f t)

6. Look across time
• Study trends that are decisive to your business, irreversible, and
have a clear trajectory.
• Apple (creating iTunes observing peer illegal file sharing)
• Cisco (solving problem of slow data rates and incompatible
computer networks).

Capturing Non-Customers
p g
• Callaway Golf noticed that many country club members have not
taken up golf because the game looked too difficult Callaway
difficult.
invented Big Bertha, a golf club with a large head making it easier to
hit the ball. They converted many non-customers.

• Pret a Manger, a British fast-food chain, noticed that professionals
went to restaurants for lunch. Some were dissatisfied with the slow
service and wanted healthier food, or decided to bring lunch from
home. Pret offered restaurant-quality sandwiches made fresh every
day from the finest ingredients and the food is available even faster
than in fast food restaurants
restaurants.

The case of Cereal Bars

Cereals for breakfast market New category

into STREETS
=
Cereal varieties

The case of Barbie

Baby dolls market Teenager New category

To
feel =
as...

Doll varieties

Other Examples of Lateral Marketing
• Kinder Surprise = candy + toy
toy.

• Gas station stores = gas station + food.

• Cyber cafes = cafeteria + Internet.

• Walkman = audio + portable.

• Train + school = classes on the train.

3. Finding New Ways to Communicate

Are You Using the New Media?
Old Media New Media

• Drum beats and smoke signals • Websites
• Face-to-face sales calls • Webcasts
• Writing • Email
• Mail
M il • Banners and pop-ups
B d

• Telephone • Blogs
• Radio • Podcasts
• TV • Videocasts
• Film
• Mobile marketing
• Sponsorships
S hi
• Direct mail • Social network sites
• Street level promotion • Stimulated buzz
• Festivals • Street level promotion
• Trade fairs
• Product placement

Product Placement is Growing
• Television and talk shows

• Video games

• Music

• Film
– The new James Bond film Casino Royale has placements for Ford
cars, Omega watches, Vaio laptops, Sony-Ericson Mobile Phones,
and New Holland Heavy equipment.
–
• Books
– The Bulgari Connection
– M i A
Men in Aprons (El t l )
(Electrolux)
– The Sweetest Taboo (mentions Ford Fiesta)

Consumer-Generated Media (CGM)
• Direct customer feedback to company Web sites
• Online bulletin boards, chat rooms, forums, and discussions
• Person-to-person e-mail
• Blogs (personal Web logs/diaries)
• Moblogs (sites where users post or send digital images, photos,
video clips to others)
• Consumer opinions and reviews on Web sites (amazon, netflix,
zagat, planetfeedback, epinions)
• Podcasts (audio files that can be downloaded and played on various
devices)
• Webcasts (internet live presentations)
• Wikipedia (encyclopedia) and Flickr (photos)
• Instant messages

Watch for Blogs
• Blogs are a modern version of a personal “
Bl d i f l “soap b ” where one
box.” h
can spread word-of-mouth. The more visits there are to your blog,
the more prominent you become as a brand. Your pronouncements
become more important and influential Blogs have a “man on the
influential. man-on-the-
street” credibility.

• There are also blogs runs by companies or company spokespeople.

• Blogs mean a loss of message control. The potential for brand
damage is high. Malcontent stories can spread on the Internet like
wildfire.

• Your company must monitor blogs for talk about your company and
your competitors. You need a specialist to do this.

Steps to Take Regarding Blogs
p g g g
• Conduct Industry Analysis: Need to find out what a group of consumers
think about your latest widget or market trends? Check out blog sites for the
specialists following your industry (Technorati com Blogwise com)
industry. (Technorati.com, Blogwise.com).

• Take Advantage of Targeted Advertising Opportunities: Identify
bloggers who cover important topics in y
gg p p your area and find out what they
y
charge for ads. Marketers can change ads to match the day-to-day
changes in their industry.

• Encourage E l
E Employees to Blog: T h i l experts can di
t Bl Technical t discuss th l t t
the latest
goings on in R&D, while your C-level discusses the future of your business.
Your brand can gain quick credibility by offering the chance to have
conversations with executives or experts. Adds a human touch.

• Create a Corporate Blog: Your brand’s blog can broadcast messages to
your external consumers, partners and industry-watchers. The difference is
that dialogue via blog is quick and specific Users come back because they
specific.
are genuinely interested in the content, while brands have a portal for
sharing the latest news as it happens.

• Make the Blog Authentic, Personal and Compelling. The live individual
behind it should be responsive to comments and inquiries. New entries
must be posted daily.

Advice about Podcasting
Q: Why should marketers consider doing a corporate podcast?
Wehr: Podcasts let you build a one-on-one relationship by connecting with
listeners and putting out a message that has an emotional aspect to it.
Listeners h
Li t hear a voice and associate th t voice with your company, which i
i d i t that i ith hi h is
a great way to get them coming back again and again.

Q: How do you select the right “voice” for your podcast?
voice
Wehr: Particularly in the b-to-b market, it’s important for listeners to hear your
message from upper-level management.

Q: How often should marketers create new podcasts, and how long
should they be?
Wehr: The podcasts have to be frequent enough to maintain an audience.
This usually means a one off podcast is going to provide very little value As
one-off value.
for length, we concluded that 15-minute podcastsmake sense. The average
commute is 30 minutes, so if you can stay in the 15- to 20-minute range,
you’re good.

Q: How should marketers use e-mail to promote their podcasts?
Wehr: You can pull out quotes or information that’s contained in the podcast
and put it into your normal e-mail communications With each new podcast
communications. podcast,
you should be doing a summary [of the podcast] and placing it on your site
so search engines can pick it up. You should also refer to previous
podcasts in current podcasts.

Social Networks
• S i l networks consist of people registering on a
Social t k i t f l i t i
website such as MySpace or Facebook and describing
themselves and connecting with others.
g

• These social networks do not allow direct marketing to
g
individuals in the social network.

• Y T b i an example of people making and sharing
YouTube is l f l ki d h i
videos with others. Some youtubers have become very
popular. Advertisers worry that consumers prefer
watching YouTube videos to their more expensive TV
programs.

What is WOM and Buzz?
• WOM is word-of-mouth.
– WOM is increasing naturally with the Internet and the cell-phone.
g y p
– WOM is more trusted than advertising.
– WOM is very powerful (iPod, Harley Davidson),

• Buzz is about trying to increase WOM. There are different types of buzz:

– Buzz marketing is meant to generate publicity, excitement and some information about the
product.
• Richard Branson’s nearly naked descent via crane into Times Square to
Branson s
promote Virgin’s mobile phone service.

– Viral marketing aims to manufacture a marketing message—typically online and in a tangible
format such as email—that can spread among consumers q
p g quickly and exponentially.
y p y

– Shill (or stealth) marketing involves people paid to promote a product/service in different
public places without revealing their relationship with the company.
• Sony Ericsson hired actors to walk around and ask p p to take p
y people photos of
them.

– Genuine word-of-mouth occurs when people talk about products on their own to friends and
acquaintances.
• BzzAgent is partly contrived, partly genuine. Women are best at Bzz.

Word of Mouth Matters
• The automobile manufacturer Mercedes is the most popular brand worldwide 60 %
worldwide.
of Mercedes owners recommend the brand to others. They are followed by BMW and
Toyota at 53%.

• The higher the satisfaction of your Fan Community the higher the potential for chain
Community,
reactions in word-of-mouth advertising. The clearest proof that your brand is
attractive is when your customers risk their own reputations in order to recommend
your brand.

• Fred Reichheld says that the willingness to recommend to a friend is the single most
reliable measure of brand equity. The net promoter score (the number of people
willing to recommend your brand minus those who are not willing to do so) provides
an accurate predictor of your company’s growth prospects
company s prospects.

• Word-of-mouse is more powerful than word-of-mouth because it reaches so many
more people.
• One lone professor found a flaw in Intel’s new chip and complained and soon Intel was
receiving 25,000 calls a day.
– Pete got mad because he bought a hybrid Honda that listed 45 miles per gallon. He only got
35 miles per gallon. He complained to Honda but was not answered. He went on a talk show
and the press picked it up. Soon he became a scourge to Honda.
– One self-appointed movie reviewer can damn a new picture that a company spent $10
million to market. (“A guy living in a basement can bring the studios to their knees.”

Creating Buzz
g
• Distinguish three types of diffusers
– Mavens: they are an expert on a topic. You listen to them
closely. Their motivation is to inform or explain.
– Connectors: they know a lot of people They are social
people.
glue. They may mention things to many others but are not
seen as experts
– S l
Salespeople: th are persuasive and h l create an
l they i d help t
epidemic of interest
From Malcolm Gladwell, Tipping Point
, pp g

• Get trendsetters in any given community to carry your
message:
– Physically (being seen with the brand)
– V b ll (b i i th b d up i conversation)
Verbally (bringing the brand in ti )
– Virtually (via the Internet)

The Professionalization of Buzz
• P&G’s Tremor
– Tremor has identified 200,000 of the most influential teen connectors.
,
– They are sent sample products and can talk about them to fellow
students if they find the products are quite good.

• BZZAgent.com
– David Balter wrote Grapevine. He started BzzAgent.com and
recruits
recr its agents of teens senior citi ens and other gro ps
teens, citizens, groups.
– Bzz only accepts good products to submit to buzz.
– An agent receives a list of campaigns and chooses campaigns
they are comfortable with
with.
– They receive the product and a tipsheet on how to use WOM if
they like the product and will talk about it.
– They write a report on every incident when they mentioned the
product and they get points which turn into rewards.
– They are asked to report negative things as well as good things
about the product
product.

Factors Determining the
Effectiveness of Buzz
• Type of product
• Exciting
E iti products (b k movies, records)
d t (books, i d )
• Innovative products (Palms)
• Personal experience products (hotels, cars)
• Complex products (software, med’l devices)
• Expensive products (computers)
• Observable products (clothes, jewelry)
• In general, high involvement and conversational products.
• Type of audience
• Certain ethnic groups depend more on word-of-mouth
word of mouth
• Younger people talk more about products than older people.
• Immigrants rely more on word-of-mouth.
• Customer connectivity
• The more the connectedness, the more the effectiveness of buzz

4. Using New Technologies and
Measuring Results
• Direct marketing and predictive
analytics

• Marketing metrics

• Marketing models

• Sales automation and marketing
automation systems

• Marketing dashboards

Needed: Metrics for Measuring Different
Marketing Expenditure Categories
• Mail
M il campaigns
i
• Telemarketing campaigns
• Sales promotions
• Managed events
• Trade shows
• Sponsorships
• TV ad campaigns
• Corporate image campaigns
• Subscription campaigns
• Customer win-back campaigns
• New product launch campaigns

Major Metrics
Sales Metrics Distribution Metrics
• Sales
S l growth th • Number of outlets
• Market share • Share in shops handling
• Sales from new products • Weighted distribution
Customer Readiness to Buy Metrics • Distribution gains
• Awareness • Average stocks volume (value)
• Preference
• Stocks cover in days
• Purchase intention
• Out of stock frequency
• Trial rate • Share of shelf
• Repurchase rate
• Average sales per point of sale
Customer Metrics Communication Metrics
C i ti M ti
• Customer complaints
• Spontaneous (unaided) brand awareness Top of
• Customer satisfaction mind brand awareness
• Customer sacrifice • Prompted (aided) brand awareness
• Number of promoters to detractors • Spontaneous (unaided) advertising awareness
• Customer acquisition
C stomer acq isition costs • Prompted (aided) advertising awareness
• New customer gains • Effective reach
• Customer loses • Effective frequency
• Customer churn • Gross rating points (GRP)
• Retention rate • Response rate
p
• Customer lifetime value Sales force metrics
• Customer equity • Quality of lead stream
• Customer profitability • Average lead to proposal
• Return on customer • Average close ratio
Brand Metrics • Cost per inquiry
• Brand strength (perceived relative brand value) • Cost per lead
• Brand equity • Cost per sale
• Cost per sales dollar
Price and Profitability Metrics
• Price
P i sensitivity
ii i
• Average price change
• Contribution margin
*Compiled by Philip Kotler from various sources • ROI
• DCF

Comments on Some Metrics
• Market share

• Customer satisfaction
• Customer sacrifice
• Number of promoters to detractors

• Retention rate
• Customer lifetime value
• Customer equity
• Return on customer

• Brand strength (perceived relative brand value)
• Brand equity

• ROI
• DCF

Message
PR effectiveness
Media
Pricing
effectiveness Brand beliefs In-store
and perception
p p activity Promotion
Marcom

Brand
Brand Purchase
Purchase Purchase
Purchase Purchase
familiarity
familiarity consideration
consideration Purchase
intention
intention

Reviews Use d
U and Revenue
Adjacent
satisfaction
category Margin
awareness

Build M d l f H
B ild Models of How Your Market
Y M k t
Works and Use New Tools

Marketing Decision Models
and Marketing Mix Response Models
• BRANDAID
• CALLPLAN
• DETAILER
• MEDIAC
• PROMOTER
• ADCAD

• See Gary Lillien and Philip Kotler, Marketing Models
(Prentice-Hall).

SALES AUTOMATION
• The objective is to empower the salesperson to be an informed
j p p
salesperson who virtually has the whole company’s knowledge at
his command and can provide total sales quality.

Marketing Automation
• Selecting names for a direct mail campaign
• Deciding who should receive loans or credit extensions
• Allocating product lines to shelf space
• Selecting media
• Customizing letters to individual customers
• Targeting coupons and samples
• Pricing airline seats and hotel reservations

Marketing Dashboards

• Tools dashboard

• Processes dashboard

• Performance dashboard

Exploit the Internet!
• Create a web site that brilliantly communicates about your
history, products, brands, beliefs and values (BMW).
• Create a site that cons lts on a categor (Colgate on dental
consults category
problems).
• Create a site that consults on the individual customer’s profile
(Elizabeth Arden) and sells customized products (Acumin
vitamins).
• Run focus groups with prospects, customers and dealers or
send questionnaires.
• Send ads or information to prospects who show an interest.
• Send free samples of new products (freesample.com).
• Send coupons of new products (coolsavings com)
(coolsavings.com).
• Invite customers to send e-mails about problems, ideas, etc.
• Use the Internet to research your competitors.
• Facilitate internal communications among employees on a
private intranet.
• Use the Internet to improve purchasing, recruiting, and training.
• Use the Internet to compare sellers’ prices and to purchase
sellers
materials by posting the company’s terms.

Technology-Enabled Marketing: Examples

• Halifax Bank
– Teller suggests financial products
• Capital One
– A credit card for everyone, but with different interest rates, credit lines, and cash
advances.
• Tesco supermarkets
– Tesco has identified 5,000 customer “needs” segments. It sends out some
300,000 variations of any given offer with redemption rates of 90%. It has
formed clubs such as Baby Club, A World of Wine Club, My Time Club
• Kraft
K ft
– Kraft has the names of 110 million customers and 20 thousand facts for each
household. Kraft launched print magazine, Food & Family, that is delivered to
g
the homes of 2.1 million Kraft customers in 32 versions tailored to 32 segments.

Take-Aways
• Marketing skills must be enhanced in the organization.
• Marketing’s
M k ti ’ scope must b more h li ti
t be holistic.
• Opportunities always exist and can be found by market segmentation,
differentiation, branding, co-development with customers, blue ocean
, g, p ,
thinking and lateral marketing.
• Traditional media must be supplemented by newer media such as
mobile phones, blogs, podcasts, webcasts, social networks, and buzz
bil h bl d t b t i l t k db
marketing.
• Marketing technologies such as marketing models, sales automation,
g g g
marketing automation, and marketing dashboards can increase
marketing productivity.
• Senior management is putting pressure on marketing to deliver more
accountability through better campaign and financial metrics.

“It is not the strongest of the species that
g p
survives, nor the most intelligent, but the
ones most responsive to change.”
Charles D
Ch l Darwin i

Старо и златно - Philip Kotler - Sofia, Lecture 11.14.07

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