CHAPTER 1 – THE BUSINESS ROADMAPPING CYCLE
Marketing is building sustainable businesses
- Business: the objective of marketing is to realise organizational goals
through the exchange of offerings (goods/services) with customers;
- Sustainable: to ensure the survival of the company, value must be created
for the company and for the customer;
- Building: the performance of a company is the result of the integrated
efforts of the whole organisation.
Three key Strategic questions:
- Where are we now?
- Where do we want to be?
- How do we get there?
Two key Strategic Marketing factors:
- Strategic Decisions: important, commit significant resources and not
easily reversible
- not only future, but equally about today’s competitiveness
Definition of Strategic Marketing:
Strategic Marketing relates to the planning and the implementation of
Marketing Activities in order to optimise the company’s current and future
competitiveness.
The Business Roadmapping Cycle:
1.
Understan
d the
Present
Vision
4. Strategi 2.
Create
Return on c Concept
the Future
Business
Ambitio
n
3.
Commit to
Execution
1 | Page
264678265 Anne Aantjes
,CHAPTER 2 – UNDERSTANDING THE BUSINESS
2.1. Defining the Business
Key is analysing both the Internal and External Environment.
The most important analyses revolve around the customer, the customer
value proposition, the business model, and the industry and macro
environments in which the company competes.
Abell (1980), business definition along three dimensions:
1. Customer groups (WHO) the business serves, the
2. Functions (WHAT) its offering fulfils for these customer groups, and the
3. Technologies (HOW) that are deployed to realise these functions.
Strategic Business Unit (SBU): has its own objectives, and competes in a
specific segment.
2.2. Customer Analysis
1ST MAJOR QUESTION: WHO IS OUR CUSTOMER?
Understand the ‘way-to-market’ architecture:
COMPANY
2 | Page
264678265 Anne Aantjes
, Direct Indirect Influencers
Channels Channels
Advisers,
Face to Face, Distributors, Regulatory
Internet etc. Resellers, OEMS, Institutions,
Convertors, etc. Media etc.
End-Customer Segments
Segment 1 Segment 2 Segment 3 Segment
4
Critical question:
- Who is the focal customer on which the company should concentrate?
Three relevant questions:
o Who makes the choices, e.g. the ‘Decision Making Unit’,
DMU?
o Who pays?
o Who consumes?
A market definition does not reflect the product a company sells, but the
NEED which they fulfil.
“we don’t sell quarter inch drills, but quarter inch holes”
“we don’t sell cosmetics, we sell hope”
It is all about ‘the job to be done’ rather than ‘the product to be sold’.
It is all about what the products do for their customers.
In essence, goods and services transform an undesirable situation into a
desirable situation.
Customer Needs:
1. Functional (fulfilling the basic need, such as transportation: getting from A
to B)
2. Experiential (desire to feel, e.g. the Ferrari’s V12 engine)
3. Symbolic (desire to ‘look good’, e.g. status symbol)
Derived demand (industrial markets):
‘Indirect demand’, like steel price going up when car market is booming (e.g.
demand for a company’s products follows from the demand of their
customers).
Customer Segmentation:
Group of individuals (B2C) or organisations (B2B) sharing one or more
characteristics and having similar needs.
The difference in ‘segmentation’ vs. ‘classification’ is in the word ‘need’.
Profiling variables in Consumer markets could include characteristics like:
3 | Page
264678265 Anne Aantjes
, - Geography (region, size of city, climate etc)
- Behaviour (frequency of use, loyalty, readiness to buy etc)
- Psychographic (lifestyle, personality, values etc)
- Demographic (age, gender, education etc)
Segmentation in Industrial markets follows a two-step:
1. Macro-segmentation: large segments based on demographic and
industrial criteria
2. Micro-segmentation: based on characteristics of DMU’s of the customer
Good segmentation criteria:
- Firstly, they effectively cluster the target market in a broad yet
comprehensive set of separate customer groups
- Secondly, they allow marketers to define measurable segments.
- Thirdly, the segments must be differentiable, reacting differently to the
marketing strategy
- Fourthly, the segments must be actionable, allowing for specific marketing
strategy per segment.
- Fifthly, marketers must challenge themselves and try to think differently.
Segments don’t stay the same; they change over time.
Targeting: Selecting particular segments to focus on.
- In itself a market is never attractive. It is only attractive when a company
can develop a competitive advantage in its chosen market.
- Ad a chosen segment must be compatible with the company’s long-term
objectives.
Three criteria to segment targeting:
1. Size
2. Growth rate
3. Structural attractiveness
2nd MAJOR QUESTION: WHAT IS OUR OFFERING?
Customer Value Proposition (CVP):
“A symbiotic bundle of one or more competitive advantages” (strengths that
influence DMU)
CVP unites two points of view:
- The customers PoV
- The company’s PoV
Differentiating, choose 1 of 4 scope strategies:
1. Non-segmentation strategy – a single CVP to target all selected segments
2. Segmentation strategy – different CVP’s per targeted segment
3. Niche strategy – one segment, one CVP
4 | Page
264678265 Anne Aantjes
Marketing is building sustainable businesses
- Business: the objective of marketing is to realise organizational goals
through the exchange of offerings (goods/services) with customers;
- Sustainable: to ensure the survival of the company, value must be created
for the company and for the customer;
- Building: the performance of a company is the result of the integrated
efforts of the whole organisation.
Three key Strategic questions:
- Where are we now?
- Where do we want to be?
- How do we get there?
Two key Strategic Marketing factors:
- Strategic Decisions: important, commit significant resources and not
easily reversible
- not only future, but equally about today’s competitiveness
Definition of Strategic Marketing:
Strategic Marketing relates to the planning and the implementation of
Marketing Activities in order to optimise the company’s current and future
competitiveness.
The Business Roadmapping Cycle:
1.
Understan
d the
Present
Vision
4. Strategi 2.
Create
Return on c Concept
the Future
Business
Ambitio
n
3.
Commit to
Execution
1 | Page
264678265 Anne Aantjes
,CHAPTER 2 – UNDERSTANDING THE BUSINESS
2.1. Defining the Business
Key is analysing both the Internal and External Environment.
The most important analyses revolve around the customer, the customer
value proposition, the business model, and the industry and macro
environments in which the company competes.
Abell (1980), business definition along three dimensions:
1. Customer groups (WHO) the business serves, the
2. Functions (WHAT) its offering fulfils for these customer groups, and the
3. Technologies (HOW) that are deployed to realise these functions.
Strategic Business Unit (SBU): has its own objectives, and competes in a
specific segment.
2.2. Customer Analysis
1ST MAJOR QUESTION: WHO IS OUR CUSTOMER?
Understand the ‘way-to-market’ architecture:
COMPANY
2 | Page
264678265 Anne Aantjes
, Direct Indirect Influencers
Channels Channels
Advisers,
Face to Face, Distributors, Regulatory
Internet etc. Resellers, OEMS, Institutions,
Convertors, etc. Media etc.
End-Customer Segments
Segment 1 Segment 2 Segment 3 Segment
4
Critical question:
- Who is the focal customer on which the company should concentrate?
Three relevant questions:
o Who makes the choices, e.g. the ‘Decision Making Unit’,
DMU?
o Who pays?
o Who consumes?
A market definition does not reflect the product a company sells, but the
NEED which they fulfil.
“we don’t sell quarter inch drills, but quarter inch holes”
“we don’t sell cosmetics, we sell hope”
It is all about ‘the job to be done’ rather than ‘the product to be sold’.
It is all about what the products do for their customers.
In essence, goods and services transform an undesirable situation into a
desirable situation.
Customer Needs:
1. Functional (fulfilling the basic need, such as transportation: getting from A
to B)
2. Experiential (desire to feel, e.g. the Ferrari’s V12 engine)
3. Symbolic (desire to ‘look good’, e.g. status symbol)
Derived demand (industrial markets):
‘Indirect demand’, like steel price going up when car market is booming (e.g.
demand for a company’s products follows from the demand of their
customers).
Customer Segmentation:
Group of individuals (B2C) or organisations (B2B) sharing one or more
characteristics and having similar needs.
The difference in ‘segmentation’ vs. ‘classification’ is in the word ‘need’.
Profiling variables in Consumer markets could include characteristics like:
3 | Page
264678265 Anne Aantjes
, - Geography (region, size of city, climate etc)
- Behaviour (frequency of use, loyalty, readiness to buy etc)
- Psychographic (lifestyle, personality, values etc)
- Demographic (age, gender, education etc)
Segmentation in Industrial markets follows a two-step:
1. Macro-segmentation: large segments based on demographic and
industrial criteria
2. Micro-segmentation: based on characteristics of DMU’s of the customer
Good segmentation criteria:
- Firstly, they effectively cluster the target market in a broad yet
comprehensive set of separate customer groups
- Secondly, they allow marketers to define measurable segments.
- Thirdly, the segments must be differentiable, reacting differently to the
marketing strategy
- Fourthly, the segments must be actionable, allowing for specific marketing
strategy per segment.
- Fifthly, marketers must challenge themselves and try to think differently.
Segments don’t stay the same; they change over time.
Targeting: Selecting particular segments to focus on.
- In itself a market is never attractive. It is only attractive when a company
can develop a competitive advantage in its chosen market.
- Ad a chosen segment must be compatible with the company’s long-term
objectives.
Three criteria to segment targeting:
1. Size
2. Growth rate
3. Structural attractiveness
2nd MAJOR QUESTION: WHAT IS OUR OFFERING?
Customer Value Proposition (CVP):
“A symbiotic bundle of one or more competitive advantages” (strengths that
influence DMU)
CVP unites two points of view:
- The customers PoV
- The company’s PoV
Differentiating, choose 1 of 4 scope strategies:
1. Non-segmentation strategy – a single CVP to target all selected segments
2. Segmentation strategy – different CVP’s per targeted segment
3. Niche strategy – one segment, one CVP
4 | Page
264678265 Anne Aantjes
