Strategic Marketing Minggu 13 1 Imperatives for MarketDriven

Strategic Marketing Minggu 13 1. Imperatives for Market-Driven Strategy 2. Markets and Competitive Space 3. Strategic Market Segmentation 4. Strategic Customer Relationship Management 5. Capabilities for Learning about Customers and Markets 6. Market Targeting and Strategic Positioning 7. Strategic Relationships 8. Innovation and New Product Strategy 9. Strategic Brand Management 10. Value Chain Strategy 11. Pricing Strategy 12. Promotion, Advertising and Sales Promotion Strategies 13. Sales Force, Internet, and Direct Marketing Strategies 14. Designing Market-Driven Organizations 15. Marketing Strategy Implementation And Control PEMASARAN STRATEGIK/TS/GENAP 1213

Value Chain Strategy • • Strategic role of value chain Channel strategy Managing the channel International channels PEMASARAN STRATEGIK/TS/GENAP 1213

Dell’s dilemma • Business built around powerful direct business model • Direct model poor fit with customer preferences in new target markets and weak on service • Dell is braodening business model – Targeting computer re-sellers – Global retail strategy (including Wal-Mart, Dell-branded stores, kiosks in malls) • Redesigning value chain is critical strategic move PEMASARAN STRATEGIK/TS/GENAP 1213

Strategic role of value chain (1) Distribution functions – – – Buying and selling Assembly Transportation Financing Processing and storage Advertising and sales promotion Pricing Reduction of risk Personal selling Communications Servicing and repairs PEMASARAN STRATEGIK/TS/GENAP 1213

Value Chain • A set of independence organizations that operate (function) to deliver the value from producers to consumers

Value chain structures - consumer products Consumer Products Producers Supply Chains Sales Agents Direct Channel Retailers Wholesalers Retailers Consumers PEMASARAN STRATEGIK/TS/GENAP 1213

Value chain structures - organizational products Organizational Products Producers Supply Chains Sales Agents Distributors Direct Channel Re-sellers Organizational Customers PEMASARAN STRATEGIK/TS/GENAP 1213

Strategic role of value chain (2) • Channels for services • Direct distribution by manufacturers – Buyer considerations – Competitive considerations – Product characteristics – Financial and control considerations PEMASARAN STRATEGIK/TS/GENAP 1213

Factors Favoring Distribution by Manufacturer Profit margins adequate to support distribution organization Complete line of products Purchases are large and infrequent Small number of geographically concentrated buyers Opportunity for competitive advantage Distribution by the manufacturer Supporting services are required Rapidly changing market environment Early stages of product life cycle Complex product application Extensive purchasing process PEMASARAN STRATEGIK/TS/GENAP 1213

Branded manufacturers enter retail • Nespresso (Nestle) “coffee boutiques” to establish lifestyle brand • Heineken branded beer bars in airports and retail • Strategic logic is to avoid control of third-party retailers over brand • Move from selling “A product in a box” to offering a superior service experience for the brand PEMASARAN STRATEGIK/TS/GENAP 1213

Channel strategy (1) • Types of channel – Conventional channel – Vertical marketing systems • Ownership VMS • Contractual VMS • Administered VMS • Relationship VMS – Horizontal marketing systems – Digital channels • Product digitization • Channel digitization PEMASARAN STRATEGIK/TS/GENAP 1213

Channel strategy selection 1. Type of distribution channel Conventional Horizontal marketing system Vertical marketing system Ownership Contractual Administered/ Relationship 2. Intensity of distribution Intensive Selective 3. Channel configuration PEMASARAN STRATEGIK/TS/GENAP 1213 Exclusive

Channel strategy (2) • Distribution intensity – Intensive – Exclusive – Selective • Channel configuration – End-user considerations – Product characteristics – Manufacturer's capabilities and resources – Required functions – Availability and skills of intermediaries PEMASARAN STRATEGIK/TS/GENAP 1213

Channel strategy (3) • Channel maps • Selecting the channel strategy – Market access – Value-added competencies – Financial considerations – Flexibility and control considerations – Channel strategy evaluation PEMASARAN STRATEGIK/TS/GENAP 1213

Illustrative channel map for heating units Production = 100, 000 units Consumption = 100, 000 units Direct sales = 10, 000 units 84, 000 units Independent Distributors 42, 000 units Production Of Central Heating Boilers Small Hardware Retailers 5, 000 units Direct sales = 1, 000 units Construction Sub. Contractors Large Hardware Retailers 40, 000 units 75, 000 units Commercial Construction Companies (85, 000 units) 7, 000 units 2, 000 units 5, 000 units PEMASARAN STRATEGIK/TS/GENAP 1213 Domestic Customers (15, 000 units)

Channel strategy (4) • Changing channel strategy –Channel strategy modification –Channel migration –Channel audit PEMASARAN STRATEGIK/TS/GENAP 1213

Illustrative Channel Strategy Evaluation Criteria Manufacturer’s Representatives Company Salesforce Market access Rapid 1 to 3 year development Value-added competencies Medium Sales forecast (2 years) $20 million $30 million Forecast accuracy High Medium to low Estimated costs $2 million* $3. 6 million** Selling Expense (cost/sales) 10% 12% Flexibility Good Limited Control Limited Good * High Includes 8% commission plus management time for recruiting and training representatives. ** Includes $150, 000 for 10 salespeople, plus management time. PEMASARAN STRATEGIK/TS/GENAP 1213

Managing the Channel (1) • Channel leadership • Management structure and systems • Physical distribution management – Supply chain strategy – The impact of supply chain management on marketing – E-procurement PEMASARAN STRATEGIK/TS/GENAP 1213

Efficient Consumer Response 4 Traditional channel problems – Forward buying and diverting – Excessive inventories – Damages and unsaleable goods – Complex deals and deductions – Too many promotions and coupons – Too many new products 4 Efficient Consumer Response – Category management – “Value” pricing replaces promotions – Continuous replenishment and cross-docking – Electronic data interchange – New performance measures – New organizational processes and structures – Internet-based network for supplier-buyer trading PEMASARAN STRATEGIK/TS/GENAP 1213

Lean Supply Chain Elements 1. Definition of Value 2. Identification of Value Streams and Removal of Muda (Waste) 3. Organizing Around Flow, Instead of “Batch and Queue” 4. Responding to Pull Through the Supply Chain 5. The Pursuit of Perfection PEMASARAN STRATEGIK/TS/GENAP 1213

Marketing/supply chain relationship • Focus on real drivers of customer value not just technical • Do not create inflexibility and inability to respond to change • Protect brands and competitive strength over short-term cost savings • Do not confuse supply chain strategy with competitive advantage PEMASARAN STRATEGIK/TS/GENAP 1213

Managing the channel (2) • Channel relationships – Degree of collaboration – Commitment and trust among channel members – Power and dependence • Channel globalization • Multichanneling • Conflict resolution • Channel performance • Legal and ethical considerations PEMASARAN STRATEGIK/TS/GENAP 1213

Channel metrics Performance Objective Possible Measures Applicable Product and Channel Level PRODUCT AVAILABILITY Coverage of relevant Percent of effective Consumer products at retailers distribution retail level In-store positioning Percent of shelf facings or display space gained by product, weighted by store importance Consumer products at retail level Coverage of Frequency of sales Industrial products; geographic markets calls by customer consumer goods at type; average wholesale level delivery time PEMASARAN STRATEGIK/TS/GENAP 1213

Channel metrics Performance Objective Possible Measures Applicable Product and Channel Level PROMOTIONAL EFFORT Effective point-ofpurchase (POP) promotion Percent of stores Consumer products using special at retail level displays and POP materials, weighted by importance of store Effective personal selling support Percent of Industrial products; salespeople’s time consumer durables at all devoted to product; channel levels; consumer number of salespeople convenience goods at receiving training on wholesale level product’s characteristics and applications PEMASARAN STRATEGIK/TS/GENAP 1213

Channel metrics Performance Objective Possible Measures Applicable Product and Channel Level CUSTOMER SERVICE Installation, training and repair Number of service technicians receiving technical training; monitoring of customer complaints Industrial products, particularly those involving high technology; consumer durables at retail level MARKET INFORM, ATION Monitoring sales trends, inventory levels, competitors’ actions Quality and timeliness of information obtained All levels of distribution COST-EFFECTIVENESS Cost of channel Functions relative To sales volume Middleman margins and marketing costs as percent of sales All levels of distrbution PEMASARAN STRATEGIK/TS/GENAP 1213