Wits sld 2016 part 4
- 1. Part 4
- 3. Agenda: Module 3 •What are “branding” and “brands” and how have they evolved? •Levels of meaning and how brands are used •Brand typology and brand value •Why brands fail •The impact of the internet on brands
- 5. Definition of a Brand A brand is a name, term, sign, symbol, or design or any combination of them, intended to identify the products (goods, services or anything else,) of one seller or group of sellers, and to differentiate them from those of
- 6. Why Brands? For Customers •Give customers a range of choices to meet their needs •Make a product instantly identifiable and familiar, and therefore saves time in making choices and … •Create customer loyalty, confidence & reassurance •Make a promise to deliver a specific set of features, benefits, advantages and quality to customers •Specific brands are associated with specific feelings
- 7. Why Brands? For Customers Thus, brands are useful because they help us to avoid confusion
- 8. Why Brands? For Companies •Create resources (through increased sales and larger profits) to build marketing strengths… •That are easy to defend.... •And reduce impact of rivals’ advertising & promotional efforts, (cause challengers to think twice: high barriers to entry) •Create barriers to switching for customers
- 9. Brand Myths – Taken by Surprise •If a product is good, it will succeed •Brands are more likely to succeed than fail •Big companies will always have brand success •Strong brands are built on (expensive) advertising •If it’s something new, it’s going to sell •Strong brands protect products
- 10. Such a powerful brand that the last time we bought 1,5 litres we paid R44.00!
- 12. Agenda: Module 4 •The factors that influence buying behaviour, and how to influence •Use of market research •What customers want – and don’t want •Carrying out a competitor analysis •Principles of marketing warfare •Attack and defence strategies and tactics
- 13. If you’ve made the choice to differentiate your company, products and services, then there are hundreds of possibilities that exist…•First, list the many stages of the buyers’ experience cycle •Next, list the dozens of ways (at least 82,) in which you can add value – at each stage •Then decide which factors are most viable for you, and most important to customers •Finally, redraw the value curve for your
- 14. For example, in the airlines industry… •Booking process •Price •Getting to (and from) airport, and parking •Check in queues •Lounges/ Freq Buyer Prog. •Different classes Now look at your own industry factors •Seating arrangements •Friendly/fun service •Meals •Speed/turnaround •Frequent point to point departures
- 15. Case Study: Virgin Atlantic • Industry assumptions: Let’s walk away from 1st Class, you can have fun and offer a massage, serve snacks between meals, drive customers to and from airport, etc. • Strategic focus: Who cares what BA and others do! “Upper Class” service for Business Class fares • Customers: Let go of the snobs, but go for “Upper Class” and the “riff raff” - and spoil them to bits with legendary personal service.
- 16. • Assets & Capabilities: Let’s redesign the ‘planes with sleeper seats, mini-casino, showers & gym, TV sets for everybody, and create a feeling of spaciousness when they walk in • Product & service offerings: “We’re in the business of time management.” Includes door-to-door “limobikes”, breakfast and showers at the end of the journey, choice of more than 48 channels, transporting goldfish, etc. Case Study: Virgin Atlantic
- 18. It should be fairly obvious that customer satisfaction is very important in terms of buying again, buying more, and enhancing your company’s image – and customer dissatisfaction has the reverse effect! But customer satisfaction is simply not enough – it’s the minimum required. For loyalty, customers need much more than that, and you need to understand what are the factors that affect this. (We’ll return to this later)
- 19. You have already had a chance to do a competitor analysis, and to understand how competitors play a role in your decision-making. But how do you need to focus? Where should you spend your time and money? How much energy should you put into fighting off competitor moves? Like many other situations we have examined so far, the answer is “it depends” Competitors and Rivals
- 20. Self- Centred Competitor - Centred Customer- Oriented Market Driven Minor Major Minor Major Emphasis on Customer Needs Emphasis on Competitor Comparisons Market Orientation And it doesn’t have to be 50:50. Perhaps we should be looking to make competitors irrelevant!
- 21. Marketing Warfare “The study of marketing warfare is not just a study of how to win – it is also equally important to know how not to
- 22. The Marketing Battleground Marketing wars are fought inside the mind: this is the difficult and tricky terrain that is so hard to understand. You try to outmanoeuvre and outfight your competitors in an intellectual war. Thus, to be successful, you need to study the terrain before the battle, so that you eliminate as many surprises as possible. Without information, you may
- 23. The good news is that most of your competitors will be so busy trying to understand their own territory… that they may not notice you studying theirs’
- 24. Three important principles underlie all wars: First, the principle of force Always have larger forces than the enemy at the point which is to be attacked or defended. Second, the superiority of defence Defence has always proved to be the stronger form of warfare. (From 25 leading brands in 1923, 20 were in 1st place, four were in 2nd, and one was in 5th place in 1998. However, things have changed since) Third, the necessity of intelligence Without information, you may find yourself wandering around, blindfolded or blind, making guesses about what should happen, and hoping for the best.
- 25. •The superiority of force is such an overwhelming advantage that it overcomes most quality differences •Count on having a better strategy, especially if you have a larger company with more people •Better products will not always win the battle. Don’t be fooled, because it’s more about perceptions. People will say: “Hey, if your product is better, how come you’re not the leader!” •Winners always have the better product, and they’re always available to say so) But beware of the two fallacies of “better people” and “better products”…
- 26. Attack Strategies: The Principles Of Offensive Marketing Warfare • The main consideration is the strength of the leader’s position • Find a weakness in the leader’s strength and attack that point • Launch the attack on as narrow a front as possible
- 27. Attack Strategies: Some Important Points • For Challengers, not for Leaders, or Followers • Main consideration: strength of leader’s position. Find weaknesses in leader’s strength, & attack there • Launch attack on as narrow a front as possible • Set high aspirations & goals, then leverage smaller resources while leader runs business as usual
- 28. Attack Strategies: Some Important Points (Ctd.) Attacker can choose to attack one of three types of companies: • Market leader (high risk, but high payoff especially if leader’s position is fragile*) • Companies their own size not doing the job and under-financed • Small local and regional companies not doing the job and under-financed *Fragile position of leader includes consumer dissatisfaction, or lack of
- 29. Attack Strategies Attacker Defender Encirclement attack Bypass attack: BOS? Flank attack Guerilla attack Full front attack
- 30. Bypass Attack Most indirect assault: involves finding “easier” markets to broaden resource base Usually three approaches: • Diversifying into unrelated products • Diversifying into new geographical markets • Leapfrogging into new technologies to supplant existing products (But Blue Ocean Strategy would disagree!)
- 31. Guerrilla Attacks • Useful for challengers which are small and under-capitalised • Consists of small, focused, narrow, and intermittent attacks on different aspects of opponent’s “territory”: geographic, demographic, industry, products, “high-end” industries, etc. (Any narrow area in which there are opportunities) • Desired effect: Surprise/shock/awe: “They can’t do that!”, draining resources, harassing or demoralising competitor, & eventually securing permanent foothold. (The drain of
- 32. Can take a number of forms: • “Raiding the supplies” • Local attacks which inflict disproportional losses on competitor • Bringing competitor into unprofitable attacks or defences • Causing excessively wide distribution of their forces • Exhausting moral, emotional, intellectual & physical energy Both conventional and unconventional means can be used to attack opponents: selective price cuts, intense promotional blitzes, & occasional legal actions
- 33. • A continual stream of minor attacks usually creates more cumulative impact • Not all guerrilla campaigns are low cost / easy to mount: may be expensive, require much detailed planning • Consider a segment which is small enough to defend when you lead • Best opportunities occur when larger competitor abandons the territory: jump in and fill void while market still exists - quickly • May even be used in preparation for conventional “war” later • Resist the temptation of changing from guerrilla warfare when things go well • Never act like the leader!
- 34. • If things are not going well, get out - at a moments notice - and live to fight another day • Small guerrillas can consider strategy of co- operating with each other as allies - temporarily or permanently • Create an army of guerrillas by franchising certain operations (top-down approach) • But also possible to get co-operation from bottom-up (joint marketing, or mass-buying of raw materials)
- 35. • Price discounting: Three assumptions must be true for success: • Challengers must persuade customers that products/service are comparable to leader’s • Buyers must be sensitive to price difference • Must also feel comfortable about turning backs on existing suppliers • Market leader must refuse to cut prices in spite of attack Which Actual Marketing Strategies Are Available to Challengers?
- 36. • Cheaper goods: Works only when sufficient buyers are interested only in price. (Over time, many challengers upgrade quality & price) • Prestige goods: (Can later roll out lower-priced products to take advantage of “name” & charisma) • Product proliferation: Attack leader by offering buyers many more choices / much larger variety • Product innovation: Launching new, improved version of leader’s products. (Also a good
- 37. • Improved services: The “We try harder” strategy • Distribution and logistics improvement: Challenger may discover / develop new channels of distribution. Some innovative approaches: direct selling, multi-level marketing, internet & e-business • Manufacturing cost-reduction: The “low-cost producer”. (Because of better raw material purchasing, lower labour costs, increased productivity, use of more modern technology, and even outsourcing.) Company can use this
- 38. Intensive advertising promotion: Challengers attack leader by increasing promotion expenditure. (Not usually a sensible strategy unless product or advertising message exhibits superiority) Blue Ocean Strategy: Make competitors irrelevant Remember: Challengers rarely improve market share by relying on one strategy: a combination of several over time works best.
- 39. A final word on attack strategies In any industry, most companies will be waging guerrilla warfare, with a very small number of the really big companies using big offensive attacks For every 100 companies, one will be leader, (play defensively), two play offense, three flank or encircle, and the other 94 are guerrillas. (Generally)
- 40. • Only the market leader(s) should consider playing defence • The best defensive strategy is to have the courage to attack yourself – even cannibalising current offers • Strong competitive moves should always be blocked The Principles of Defensive Marketing Warfare
- 41. Some points to remember about defence • “The leader”, is defined from customer’s perspective. Companies don’t create leaders - customers do. And they don’t care what you think. • “The leader” means the leader, not a leader. (A pretender cannot will their way to the top through positive thinking). Fool the competition, but never fool yourself. • The best way to improve leadership position is to constantly attack yourself: introduce new products, services, & systems making existing ones obsolete • Why is this a superior strategy? Competitors continually struggle to catch up
- 42. • Attacking self sacrifices short-term profits, but has the fundamental benefit of protecting market share • Reverse is also true: a company which hesitates to attack itself usually loses market share & ultimate leadership • Market leaders do get a second chance if they haven’t attacked themselves, by copying competitive moves. (But must move quickly: no time for ego’s, & to “wait and see”) • Why is defensive blocking effective? Because battleground of marketing is customer’s mind.
- 43. There should be no surprises: good reconnaissance must give info and intelligence to make competitor predictable. The intelligence is most important to understand? The customer’s mind! Leaders don’t spend much time on defense, but should always have “something in reserve”. (Lay low until sales start to falter. Then launch massive campaign to get sales moving again. A version of “attack yourself” strategy.)
- 44. Module 5 Customer Loyalty and Retention
- 45. Agenda: Module 5 • Why customer loyalty and management is important • Why loyalty is more important than satisfaction, (hostages, terrorists, mercenaries and angels) • What customers want: ServQual, B2B needs, CES, and activities in identifying touchpoints and customer journey maps • How to create customer loyalty – only four ways to do this • Getting basics right, create barriers to switching, putting relationships first, and value innovation • Internal customer care • A complete strategy for customer management
- 48. • R & D and market research • Product & service development, and launch • Advertising and promotion • Getting new customers on board Customer loyalty is extremely profitable Year 0 1 2 3 4 5 CustomerProfit Acquisition Costs Base Profit Marketing Cost ↓ Cost to Serve ↓ Increased Sales Referrals Price Premium But benefits also accrue from…
- 49. Oh, and one final challenge… In recent surveys asking executives to rate their success in customer care, customer loyalty, and customer management, most rate their companies as good, very good, or exceptional When asked the same questions, most of their customers disagreed!
- 51. So What is Customer Management? Customer management is aimed at building a portfolio of loyal customers by offering them on a continuous basis a product/service package tailored to their individual needs. It is the strategic management process that uses individual customer data to enable a tailored, mutually trusting, valuable and win:win proposition (Today supermarkets and hotels are more
- 53. If you cannot be distinct, then you’re going to be extinct Be interesting, or be invisible What is your competitive advantage? Why should anybody do business with you?
- 54. Companies want their customers to be loyal to them… But they are not prepared to be loyal to their customers
- 55. Who is Wayne Duvenage?
- 56. “Smooth” Touchpoints: Get the basics incredibly right. Kill “dumb contacts” (3) High barriers to switching Continuous value innovation Put Relation- ships First Sustainable Customer Loyalty
- 57. “Smooth” Touchpoints: Get the basics incredibly right. Kill “dumb contacts” (3) Sustainable Customer Loyalty Maximising Value through Customer Management
- 58. What do you want when you spend your money?
- 59. Dimensions of Service Quality Getting the Basics Right Reliability: Consistency of performance and dependability. The company performs its work right first time, and honours its promises Responsiveness: The willingness or readiness of staff to provide service, (rather than apathy). It also involves timeliness and a sense of urgency. It’s about short queues and no delays Competence: The possession of the required skills and knowledge to do the job and perform the service Access: Approachability and ease of contact, both by telephone, and in a “live” face-to-face situation. We can include things like hours of business and convenient location in this category
- 60. Courtesy: Politeness, respect, consideration, friendliness, warmth, and even love from staff who deal with customers Understanding the Customer: Knowing customer’s specific needs & requirements, & who they are. Examples: individual attention and recognising them Communication: Keeping people informed always. Especially true if something goes wrong, (reassure customer that problems will be handled.) Includes explanations, training & clarity about prices/costs. Half communication is about listening Dimensions of Service Quality Getting the Basics Right
- 61. Credibility: Trustworthiness, believability, honesty, ethics and integrity are all important here. It’s about having the customer’s best interests at heart. Your name, brands and reputation contribute to this, but so do the personal characteristics of the people who work there Security: Freedom from risk, danger, doubt, and/or worry. Whether customers feel comfortable doing business with you. Includes elements of physical safety, financial security, & confidentiality. Tangibles: The physical evidence which impacts on the customer: appearance of staff, the physical facilities, the tools and equipment, even other customers. Anything that affects or attacks any of the five senses is important here. (Customers use physical representations of the company as symbols of the quality of products and service.) Dimensions of Service Quality Getting the Basics Right
- 62. Creating the “perfect customer experience” begins with making it easy to do business with your company Getting the Basics Right – Part 2: Customer Effort Score - CES
- 63. Why is CES a good idea? •Drives advocacy value for loyalty •Reduces customer churn from difficult experiences •Applicable to all channels •Resonates with and engages staff •Low effort usually also means lower costs for everyone – customers and company
- 64. Customer Effort Defined The physical, mental/cognitive/intellectual, emotional, and time-effort energy needed to do something
- 65. Making things appear simple Making things simple
- 66. The Pillar ATM
- 67. Mapping the Customer Journey Touch Points in Time Sequence CustomerEffortScore Location Check In Car Park Lounges Security Shopping* Signs Hurry up and Wait* Home Check In Aircraft seating Boarding Gate seating Toilets Gate seating Toilets Aircraft seating Location Car Park Home Check In Lounges No need to wait* Signs Shopping* Security Boarding “I hate this! Why do I keep doing it? “Aaaah! If only I could do this always”
- 68. “Smooth” Touchpoints: Get the basics incredibly right. Kill “dumb contacts” (3) High barriers to switching Put Relation- ships First Sustainable Customer Loyalty
- 70. •1200+ flights •Still don’t know who I am •Unable to detect patterns 1986 20132001 So much for CRM!
- 72. “Smooth” Touchpoints: Get the basics incredibly right. Kill “dumb contacts” (3) High barriers to switching Continuous value innovation Put Relation- ships First Sustainable Customer Loyalty
- 73. Fish! Your Personal Power to Make a Difference
- 76. How do we make ourselves indispensable? By giving them irresistible experiences… And thereby making competitors irrelevant!
- 77. Commodity or Speciality - Is It Worth It? “There is no such thing as a commodity” (Ted Levitt) R11/kg R5,50/kg R28.50c/kg R66/kg
- 88. How can you add value to toilet paper?
- 89. Customer of the Year It’s very possible to create a lot of perceived value at not much cost to your businessAnd it was unanimous A Perfect Customer Experience?
- 90. Start spreadin’ the news…
- 93. But who can’t/won’t be friendly?
- 95. • Did you send my goldfish to London? • Who is going to organise my seatbelt?
- 96. The opposite is also true… It is perfectly possible to spend a fortune without creating much real loyalty in customers! (Value, yes; loyalty, no)
- 97. There are at least 82 ways to add value for Your customers! Getting to Unbelievable!
- 98. The Four Actions Framework Reduce Which factors should be reduced well below industry’s standard? Raise Which factors should be raised to well above industry’s standard? Eliminate Which factors that industry takes for granted should be eliminated? Create Which factors should be created that the industry has never offered? A new industry value curve
- 101. before you can get into their pockets You have to be able to get into your customer’s heads…
- 102. “There are only two things of importance. One is the customer, and the other is the product. If you take care of customers, they come back. If you take care of products, they don’t It’s just that simple. And that difficult” Stanley Marcus, Neiman Marcus
- 103. Every morning in Africa, a buck wakes up and knows that it must run faster than the fastest lion, or it will be killed. But every morning in Africa, a lion wakes up, and knows that it must run faster than the slowest buck, or it will starve to death. In Africa, it doesn’t matter whether you are a lion or a buck… When the sun comes up, you’d better be running! So just in case you need reminding…