slides for apmea

Market leadershipExplosive topline growth

Failan Saleem

Plan

• Discovery consist of looking at the same thing as everyone else and thinking what nobody has thought

alberszent-gyogi

Perspective Marketing Innovation

Happy customers

Loyal customers

Cash flow

Profit

EVA

“The customer is simply the fulcrum (core) of the business and everything from production to supply chain, finance, risk management, personnel management and product development all adapt to and converge on the business value proposition that is projected to the customer”.

Perspective

(The Customer Information Wars, Sean Kelly, Wiley, 2005

Purpose

Profit improvement

Productivity improvement Sales growth

Productdevelopment

Marketdevelopment

Marketpenetration

Changeasset base

Existingassets

Costreduction

Improveasset

utilisation(experience

andefficiency)

Increaseprice /reduce

discounts

Improveproduct /sales mix(margins)

Newmarkets

Existingmarkets

Convertnon-users

Newsegments

Takecompetitors’customers

Increaseusage

Growth focusCash and margin focus

Investment• Innovation• Diversification

Divestment• Redevelopment of capital resources

Capital Utilisation focusProfessor Malcolm McDonald

AssetBase

Define markets& understand

value

Determinevalue

Proposition

Delivervalue

Monitorvalue

Finance & marketing alignment

• How does the company plan to generate its predicted future sales and profits?

• Will the marketing strategy on which these plans are based work?

• Will this strategy create shareholder value, given its inherent level of risk?

Transactional or transformational?

• Control• Curtailment • Consolidation

My experience

Model 1 :Ansoff matrix

MarketPenetration

ProductDevelopment

MarketExtension

Diversification

Present Newincreasing technological newness

newness

increasing market

newness

Present

New

PRODUCTS

MARKETS

Professor Malcolm McDonald

• Burger king :Satisfries• Maccafe : Iced smoothies and frappes• Digital engagement• Drink destination and food destination

Food destination or Drink destination

Starbucks

• Store loyalty?• Satisfaction ?• Sales from new customers?• Average purchase value

Quiz

How much value does Starbucks add?

Cost of coffee bean when harvested =

$0.50/lb.

Value realized by Starbucks from selling cup of coffee =

$230/lb.

AN INCREASE IN VALUE

OF +46,000%

Numbers don’t speak for themselves

Purchase Criteria

Importance Market ratings (0-10)

Us Them

Product offer 45% 8.2 7.8

Customer service 25% 7.1 7.1

Experience 20% 5.4 7.2

VFM 10% 9.2 6.6

• Whilst accountants do not measure intangible assets, the discrepancy between market and book values shows that investors do. Expenditures to develop marketing assets make sense if the sum of the discounted cash flow they generate is positive.

Investment in marketing

What's wrong with this table? Sales growth 2.25%Price growth 1.00%

Estimates 2015Unit sales 1000Unit price $500 REVENUE $500,000

Purchases $144,627 Direct labour 97,665Indirect labour 55,257Distribution 26,236Depreciation 17,634Advertising 12,600Commssion 27,748Promotion 10,084Market Research 10,078R&D 15,073Other 32,546TOTAL EXPNCES $449,548

PROFIT $50,452

• Competition : market entry or new product

• Customer: assumed , effect of CRM, product recall

• How we calculate profit: TR-TC=TP• Cut spending? example advertising?

Cutting cost is not a good thing or bad thing, the tools forces us to do that

What's not in the spreadsheet

• Insanity “ doing the same things over and over again and expecting different results”

• Business insanity “ Doing the same things over and over again and expecting different results”

Business insanity

Are you caught in the EVM trap?

• Acquisition gap : emerging segments

• Customer gap: acquisition• Loyalty gap: purchase frequency• Expansion gap: average items purchased• Margin gap: average price paid

Model 2 : Growth gaps

Market Space

Cool Places: where the

latest trends emerge

Hot Spots: Where the

new competition is

Black Holes: Where old brands die

White Spaces:

Where nobody has ventured

The concept of More

Segments

Acquisitions

Retention

Sales

Thank you