market sensing and learning strategy: competitive strength through knowing more lecture 5

Market sensing and learning strategy:Competitive strength through knowing more

Lecture 5

A route-map for market-led strategic change

Value-basedmarketingstrategy

New marketing

meetsold

marketing

Strategicthinking and

thinkingstrategically

Customer valuestrategy andpositioning

The strategic pathway

Strategicmarket choices

and targets

Market sensingand learning

strategy

Strategicrelationshipsand networks

Change strategy

Strategicgaps

Organizationand processes

for change

Implementationprocess and

internalmarketing

Part ICustomer value

imperatives

Part IIDeveloping a value-based

marketing strategy

Part IIIProcesses for managingstrategic transformation

The Customeris always

right-handed

The strategic pathway

• Developing a value-based marketing strategy– Market sensing and learning strategy– Strategic market choices and targets– Customer value strategy and positioning– Strategic relationships and networks

The strategic pathway

Marketsensingandlearningstrategy

Strategicmarketchoicesandtargets

Customervaluestrategyand positioning

Strategicrelationshipsandnetworks

Strategic thinking andthinking strategically

Strategictransformationand strategyimplementation

Agenda

• Understanding customers and markets• Black swans and white swans• From market research to market sensing• New cross-over tools for management understanding• Marketing intelligence• Interpretation• Lessons in learning• Enhancing sensing capabilities

Understanding customers and markets

• Companies have little understanding of why their customers behave the way they do

• Executives looks at averages and ignore market granularity• Agile, fast-moving businesses show high knowledge-intensity• The goal is to raise a company’s “Market IQ”• Crunch question = what do you know that every rival does not also

know?

Black swans and white swans

• The black swan analogy underlines the limitations to our learning and the fragility of our knowledge

• Black swan events are the “unknown unknowns”• Market sensing demands open-minded inquiry and

experimentation not probabilistic estimates and sampling

From market research to market sensing

• What is the difference between market sensing and marketing research?– marketing research involves techniques of data

collection and processing– market sensing is a process of management

understanding

Marketing research versus market sensing

Managementinformation

systems

Marketingresearch

Cross-overtools

Marketingintelligence

Market sensingcapabilities

Marketunderstanding

Internal recordsCRM dataDatabases

SurveysObservationMarket tests

EthnographyInternetFuturology

ScanningTrendsClues

Interpretation

Sources of marketing knowledge Processes of managementunderstanding

From market research to market sensing

• Limitations of conventional market research– unreasonable expectations– the limits of questions– the “right” results– we don’t believe it– excuses

From market research to market sensing

• The elephant in the market• Strategic and non-strategic marketing information

Strategic and non-strategic marketing information

Importance of information

Urgency ofinformation

High Low

High

Low

Priorities Short-termdilemmas

Strategic Timewasters

New cross-over tools for management understanding

• Ethnography– hidden in plain sight– neuromarketing

• Internet sensing– the wisdom of crowds– blogs– virtual reality– social networks

New cross-over tools for management understanding

• Futurology– careful examination of what is going on around us– scenario building – how things may unfold– visioning – working out what is likely to happen and

what we want to happen

Marketing intelligence

• Trends and clues– trendspotting– new identity groups– the quest for cool– looking for clues– deep mining

• But play nicely and don’t be naughty• Managing customer knowledge

Interpretation

• Link between information, sensing and management understanding relies on processes of interpretation

• Integration of multiple information sources central to evidence-based management

• Goal is sustaining learning to create competitive advantage

Lessons in learning

• Storytelling• Watching customers• Meeting customers• Customer days• Building customer scenarios• Listening not evaluating• Studying complainers

Enhancing sensing capabilities

• A structure for market sensing

A framework for market sensing

Probability of the event occurring

Effect of theevent on thecompany*

High LowMedium

1

2

3

4

5

6

7

* 1=Disaster, 2=Very bad, 3=Bad, 4=Neutral, 5=Good, 6=Very good, 7=Ideal

Utopia Field ofdreams

Things towatch

Danger Futurerisks

Enhancing sensing capabilities

• Managing the market sensing process– choosing the environment– sub-dividing the environment to focus attention– identifying the impact of external changes– interpreting the model for strategy building– Linking market sensing to plans– providing information as a stimulus to thinking– consider who should be consulted and involved

Enhancing sensing capabilities

• A note of caution– market sensing and new learning may be disruptive

inside an organization