Sunday, 5 March 2017

HBR’s 10 Must Reads – On Strategic Marketing

Like most business school writing it’s a bit repetitive and going in circles. But I thought it was interesting to go back to some of the stuff which is used and abused in daily business and see what it was meant to be.

While we all heard a thousand times that we need a customer centric organization, it’s interesting to see that this means for brand managers to relinquish control and being led by the customer manager identifying customer needs. (Rust, Moorman and Bhalla, 2010, p.6). “companies need to focus less on product profitability and more on customer profitability.” (Rust, Moorman and Bhalla, 2010, p.11).

Also that one of the key points of the customer decision journey is that – unlike in a funnel – the number of brands under consideration is contantly increasing and decreasing. (Edelman, 2010, p.16). Also that this journey is not meant to be invented for each category anew and certainly not for each advertising campaign, but that the four stages are universal. “(I)nstead of focusing on how to allocate spending across media – television, radio, online, and so forth – marketers should target stages in the decision journey.” (Edelman, 2010, p.18).

 “(Ford’s) (m)ass production was the result, not the cause, of the low prices.” (Edelman, 2010, p.44). “Therefore we first reduce the price to the point where we believe more sales will result. Then we go ahead and try to make the prices. We do not bother about the cost. The new price forces the costs down.” (Edelman quoting Ford, 2010, p.45).

 “In other words, the job (the customer want to get done), not the customer, is the fundamental unit of analysis for a marketer.” (Christensen, Cook and Hall, 2005, p.61).“Job-defined markets are generally much larger than product category-defined markets.” (Christensen, Cook and Hall, 2005, p.64).“The fact is that most great brands were built before their owners started advertising. (…) Brand building by advertising is indeed prohibitively expensive. But that’s because it’s the wrong way to build a brand.” (Christensen, Cook and Hall, 2005, p.70).

Brand communities exist in different types. They are not just a community because they share the brand’s values. In pools people have strong associations with a shared activity or goal (…) and loose associations with one another.“ (Anderson, Narus and van Rossum, 2006, p.140). In webs “(p)eople have strong one-to-one relationships.” (Anderson, Narus and van Rossum, 2006, p.140). And in hubs “(p)eople have strong connections to a central figure.” (Anderson, Narus and van Rossum, 2006, p.140).

Loyalty is not the important measure. “Indeed, even someone who buys again and again from the same company may not necessarily be loyal to that company but instead be trapped by inertia, indifference, or exit barriers.” (Anderson, Narus and van Rossum, 2006, p.155). “When customers act as references, they do more than indicate that they’ve received good economic value from a company; they put their own reputations on the line.” (Anderson, Narus and van Rossum, 2006, p.156).

Market research is most useful when it becomes an operating management tool: “When a customer reported a neutral or negative experience, marking him a potential detractor, the interviewer requested permission to immediately forward this information to the branch manager, who was trained how to apologize, identify the root cause of the problem, and resolve it.” (Anderson, Narus and van Rossum, 2006, p.168).

The relationship of marketing and sales can be improved by organizing it better. But more importantly they should join forces, as it’s their combined job not to make things more efficient or cheaper, but to increase revenue. Their boss should be the chief revenue (or customer) officer. He’s responsible for the common goal: the generation of profitable and increasing revenue (Kotler, Rackham and Krishnaswamy 2006, p.187).

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