building your business market & the customer of the future dr. dawne martin mktg 241 february...

Building your Business Market & the Customer of

the FutureDr. Dawne Martin

MKTG 241February 23, 2012

Administration Things

Tuesday, Feb. 28 – Quiz, Chapter 4 – 6Learning Objectives

◦To determine your approach to strategy – customer or innovation

◦To build your business model

Rethinking Marketing, 1st Edition

Rethink Tool #6

Develop a balance between science and art, logic and imagination using "whole-brain thinking" like Leonardo da Vinci.

Question - To pursue a customer versus a product focus?

Prentice Hall © 2009 6-3


Marketing and Innovation Innovative marketing

◦ Product proceeds need◦ Create their own demand

Change way customers behave◦ Two components

Openness to innovation Capacity to innovate

◦ Potential to create markets and customers Defining human needs



◦ Innovative marketing—cont. Sources of innovative ideas

◦ Technology◦ Engineering and production◦ Inventions and patents◦ Other firms◦ Management and employees◦ Customers

First to market and continual innovation is key to survival in a turbulent business environment



Competitive Advantage Achievements in recent past came from

anticipating and creating customer wants◦ Competitors who survive more proficient◦ Dwindling opportunities to sustain competitive

advantage

Create and target future needs and wants◦ Managers perceive inherent risk◦ Accepting risk likely to become more central to

competitive advantage



Changing Needs and Environments

ICON grid (innovation or customer orientation)

◦ Framework to conceptualize and think about changes in market

Customer needs and wants change rapidly Traditional firms will increasingly be aiming at

moving targets Flow of learning between customer and

innovation goes in both directions



Customer Focus

Innovation Focus

Low

Low

High

High

Isolate

Follower

Shaper

Interact

A

B

C

D


Figure 6.1 The ICON Matrix


Degree of Focus on Innovation and/or the Customer Can Vary, Leading to Four Strategic Orientation Modes for the Firm

Isolate◦ Low customer focus◦ Low innovation focus◦ Organization

becomes focus of its own attention

Follow◦ High customer focus◦ Low innovation focus◦ Customer drives

innovation◦ Organization relies

heavily on formal and informal market research

Shape◦ Low customer focus◦ High innovation focus◦ Technology defines

human needs◦ Two distinct forms

Defining Influencing

Interact◦ High customer focus◦ High innovation focus

◦ True dialogue between customer and technology



Choosing a Mode of Focus

Review conditions before choosing one mode over another◦ Environmental factors

Specific business environment◦ Very stable environment—isolate◦ Complex rapidly evolving customer

needs and wants—follow◦ Rapidly evolving technology—shaping◦ Customer needs and wants proliferate—

interaction

Prentice Hall © 20096-10


◦ Environmental factors—cont.Economic power of existing customers

◦Bargaining power of customer higher than supplier —follow

Competitive factors ◦Globalization and deregulation cause intensified

competition—shape or interactPolitical factors

◦Sometimes firms have very established and embedded approaches in their cultures, making change hard

◦Very substantial change necessary to bring about mode change



Understanding the Implications of Changes of Mode

Three high-profile cases of mode transition

◦ Boeing Shaper to interact to follow, with appearance

it is again shifting◦ AOL

Shaper to isolation to follow to isolate◦ Microsoft

Isolate to follower


Build Your Business Model

A Business Model Describes the rationale of how an organization creates, delivers and captures value◦Customer Segment – What market segments should

be served?◦Value Proposition – What customer problems will be

solved or needs to be satisfied? Newness - Design Performance - Brand/Status Customization - Price Getting the job done - Cost reductions Risk reduction - Accessibility Convenience/Usability


◦Channels – What value propositions are delivered to customers through communications, distribution and sales channels? Awareness, Evaluation, Purchase, Delivery, After Sales Sales Force - Web Sales Own Stores - Partner Stores Wholesalers

◦Customer Relationship – How will you establish and maintain relationships with each customer segment? Personal assistance - Dedicated personal assistance Self-service - Automated services Communities - Co-creation


◦Revenue Streams– How will revenue be generated from value propositions offered to customers? Asset Sale - User fees Subscription fees - Lending/renting Licensing - Brokerage fees Advertising

◦Key Resources – What assets are required to offer & delivery previous elements? Physical - Intellectual Human - Financial


◦Key Activities – What activities are required to create previous elements? Production - Problem solving Platform/network

◦Key Partnerships – What activities should be outsourced or acquired from outside the enterprise? Optimization & economies of scale Reduction of risk & uncertainty Acquisition of particular resources & activities

◦Cost Structure – What are the primary costs associated with your business model? Cost driven - Value-driven Fixed costs - Variable-costs Economies of scale - Economies of scope

Key Partners

The Business Model Canvas:

Key Activities

Key Resources

Value Proposition

Customer Relationships

Customer Segments

Cost Structure Revenue Streams

building your business market & the customer of the future dr. dawne martin mktg 241 february...

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