CITM360 – Week 8
Steven A. Gedeon, PhD, MBA, PEng
This Week’s Agenda
• Review of Interim Presentations
– Focus on Competitor / Differentiation /
Strategic Maps
– Workshop on Strategic Maps for Each Group
• Case Study Presentations
• The Marketing Plan
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Product
Price
Place
Promotion
Dr. Steven A. Gedeon sg@intelliaction.com
Room Change
DATE: Monday March 14, 2005
TIME: 3 - 5pm
ROOM: KHS329
One Day Only – Double Class
Dr. Steven A. Gedeon sg@intelliaction.com
Review of Interim Presentations
• Tremendous Improvement Over Assignment 1
• In Virtually All Cases, I Graded Higher than the Class
• All Ave Class Scores were 6-8 with No Exceptions,
Even When the Subject was Skipped or Excellent
• Very Few Grammatical/Spelling Mistakes
• Still Some Major Weaknesses
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Customer Segmentation (and Who is the Customer)
Differentiation and Positioning Strategy
Business Model
Value Chain and “Space”
Key Success Factors
Dr. Steven A. Gedeon sg@intelliaction.com
Customer
• Anyone Who Pays You Money is a Customer!
– Connectix, RU3, eWed
• Most Groups Still Vague over the Concept of
Customer Segmentation and Characteristics
– Buying Characteristics
– Market Stats to Validate the Size, Ability and
Willingness to Buy
– Addressable Market
– Becomes Very Important during Market Plan!
Dr. Steven A. Gedeon sg@intelliaction.com
Sample Customer Questions
• Students: Do they own DVD Players? Don’t they do P2P
instead? How much do they spend on DVDs? What’s
their discretionary income? How much do they spend on
convenience items?…
• 24-32 Yr Old Daters: How many in any given region? Do
they have 3D graphics cards? How many are using
dating sites or VR sites today?
• Business who Print: Who makes the buying decision
within the company? Does their Marketing Firm make
the decision?
• Advertisers to Brides: What do they spend now and
where? Local vs National Chains? What are you Offering
them (in contrast to what you offer to Brides)?
Dr. Steven A. Gedeon sg@intelliaction.com
Value Prop – Customer Pain
• Ideally 1-2 Focused Statement(s) (in
Contrast to a List of Features)
– Can use 2 Slides Here if Needed
• Difference Between Value (Seeking a
Positive) and Pain (Avoiding a Negative)
Dr. Steven A. Gedeon sg@intelliaction.com
Competition > Differentiation >
Strategic Map
• Must Connect Competition to Differentiation to the
Strategic Map
• The Strategic Map Tells You if You Can Sustain
Your Differentiating Advantage
• If NOT, Then Start Over Again!
• The Key is Picking the Correct Axes
– How Well do you Understand Your Key Sustainable
Differentiation and How the Customer Compares you?
• Generic Axes did not Add to Understanding!
Dr. Steven A. Gedeon sg@intelliaction.com
What are Key Differentiators?
(Good Axes to Pick on Map)
• Strong
– Price, Quality, Speed, Customization, Support, Design
(remember these?)
– Exclusive Channels or Partnerships
– Customer Segment Only IF Barriers to Entry
• special knowledge required, special needs, hard to reach…
• Weak
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Features (unless very hard to replicate)
Geography, Language…
Customer Segment IF simple to enter
Narrow vs Broad (Unless Creates Barriers to Entry)
Dr. Steven A. Gedeon sg@intelliaction.com
Strategic Mapping Workshop
• Let’s Discuss Each Group in Detail
Dr. Steven A. Gedeon sg@intelliaction.com
Business Model
• Tremendous Confusion and Disagreement
over this Term
• Not the Same as Porter or Revenue Model
• Credit Given for Most Aspects of “How do
you Deliver Value”
• Only Three Groups Actually Showed This
Properly (as it was described in class)
– RU3, OPP, Campus Express
Dr. Steven A. Gedeon sg@intelliaction.com
Value Chain – “Space”
• Some Groups did a Great Job on This
– OPPrint and Campus Express
• Tremendous Confusion Over Value Chain if Selling B2B
– The Value Chain for Who you Sell to and The Value Chain for
How You Deliver Value to Your Clients (only 1 Value Chain in
B2C)
• You MUST Engage in ALL Aspects of Your Own Value
Chain. The Question is: What Parts are you going to Do
Better Than Anyone Else?
• “Space” is Related to Your Clients’ Value Chain in B2B
and/or Porter 5 Forces Environment
Dr. Steven A. Gedeon sg@intelliaction.com
Revenue Generation
• Don’t Need to Complicate This
• Many Groups Put a Lot of Non-Revenue
Related Info on these Slides
• Must be Crystal Clear on Details of
Revenues vs Expenses for Financial Plan
Dr. Steven A. Gedeon sg@intelliaction.com
Key Success Factors
• Most Groups were Surprisingly Weak Here
• Cannot Be Excellent at Everything!
– This Violates the Concept of Differentiation
– Lowest Cost, Best Quality, Fastest, Custom…
• Key Word Here is: KEY
• Since Each Business is Unique, I Cannot
Give Generic Comments Here
Dr. Steven A. Gedeon sg@intelliaction.com
Presentation
• Slides and Graphic Quality were Good
• Pace and Length were Good
• Don’t Read
– Use Bullets as Talking Points
• Don’t Turn Your Back While Speaking
• Add Introduction Slide (You Never Know Who
will get a Copy of your Slides!)
• Add Contact Info ( “ )
• Be Consistent! Pick a Key Theme and Stick to It
Dr. Steven A. Gedeon sg@intelliaction.com
The Marketing Plan
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Product
Price
Place (Distribution Channels)
Promotion
People – Organization Plan
Profits – Financial Plan
Dr. Steven A. Gedeon sg@intelliaction.com
Product
• Core Product
– e.g. transportation (affects who your
competition will be in the future)
• Actual Product
– e.g. the car itself, its features, quality…
• Augmented Product
– e.g. services, warranty, ease of purchase,
prestige associated with owning a Porsche…
Dr. Steven A. Gedeon sg@intelliaction.com
Services as the Product
Characteristics of Services – not the same as selling a
product
– Intangibility – Can you touch and feel?
• offset by stressing competence, professionalism, and experience
– Inseparability – Delivered by people
• It’s the person you trust
– Highly perishable
• Timing is important (you cannot inventory a haircut)
– Quality control issues/standardization
• Difficult to standardize – people dependent
– Rely on repeatable/well documented processes
– Customer involvement
• The customer must be present to get a haircut
Dr. Steven A. Gedeon sg@intelliaction.com
Features into Benefits
• Customers value products and services not for what they
are but for what they do. Concentrate on benefits!
• Turn features into benefits
– For example – credit card
• Compact size -> Easy to take anywhere
• One monthly bill -> Saves time
• A single feature may offer different benefits to different
audiences, so have a particular target market in mind.
Dr. Steven A. Gedeon sg@intelliaction.com
Price
Customer’s goal is to obtain the most benefit for the price paid for a product or service.
Your goal is to obtain the most price for the benefits.
• What are your pricing objectives?
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Market share?
Maximizing profits?
What price do you need to be profitable? To break even?
High demand, few alternatives? Able to charge higher price – inelastic demand
Less demand, high volume of substitutes and plenty of alternatives – elastic demand.
What information do you need to determine your break even point?
Don’t compete on price if you can help it – Find other alternatives.
• What are other alternatives?
Dr. Steven A. Gedeon sg@intelliaction.com
Pricing Decisions
• Cost Plus Pricing
– Fixed vs Variable Costs
• Marginal Cost Pricing
• Demand Based Pricing
– Price Segmentation between User Groups
• Competitor Based Pricing
Dr. Steven A. Gedeon sg@intelliaction.com
Additional Price Considerations
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Commissions or Referral Fees
Discounts, Specials, Incentives
Flexible Pricing, Bundles
Account for Cost of Returns
Sometimes Premium Pricing Conveys
Superior Quality
• Opportunity Costs (Should you Bother
Selling This or Focus on Primary Product?)
Dr. Steven A. Gedeon sg@intelliaction.com
Alternatives to Price
Competition
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Customization
Personalization
Specialization (niche focus)
Increased convenience
Additional service enhancements
Demonstrated quality
Dr. Steven A. Gedeon sg@intelliaction.com
Place/Distribution
• Direct Sales
– Sales Staff
• Sales Funnel Management
– Company Website
• Traffic Generation
• Indirect Sales
– Reps, Agents, Distributors
– Affiliate Websites
Dr. Steven A. Gedeon sg@intelliaction.com
Promotion
• Getting the word out – communicates availability and desirability of
your offering
• Positioning
– Image of company is distinct to customer
– About finding or creating a dimension in which you can become known
as the best
– Reflects personality – based on:
• Advertising
• Customer’s experiences
• Web site
– Should be consistent
• Building a brand (extension of positioning)
– Association/expectations that come to mind when exposed to a name,
logo or package.
– Conveys credibility
Dr. Steven A. Gedeon sg@intelliaction.com
Promotion Mix
• Prospecting (e.g. cold calling)
• Trade Shows
• Public Relations
– Magazine Articles, Stories, TV appearances…
• Advertising
• Direct Marketing (Mail, eMail)
• Word of Mouth
Dr. Steven A. Gedeon sg@intelliaction.com
Promotional Campaigns
• Increase Revenue
• Build Brand
– Highlight
– New Customer
Products/Services
Acquisition
– Communicate Value
– Drive More Business
Proposition
from Core
– Drive Website Traffic
Customers
– Generate Life-time
– Build Long Term
Value
Customer
Value/Relations
Increase awareness while improving ROI.
Dr. Steven A. Gedeon sg@intelliaction.com
Promotion
• Getting people to your site
– Search marketing - Directories e.g. Yahoo!
and Search engines e.g. Google
– Email Marketing
– Other PR strategies
– Advertising & Branding
• Forrester Research in UK suggests 81%
of British internet users find sites using a
search engine or directory
Dr. Steven A. Gedeon sg@intelliaction.com
Search Engine Marketing
• Different search engines search on different parts of web sites (e.g.
titles, words on page)
• How to get Ranked by Search Engines?
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Titles, Metatags…
Keywords
Other sites pointing to you
Paid placements
• Will Google bring you business?
– Cost of search vs. Revenue per customer
• Monitor traffic, keywords used, pages visited, how
much time spent…
• For search engine submissions tips, see
http://searchenginewatch.com/webmasters/index.php
Dr. Steven A. Gedeon sg@intelliaction.com
Email Marketing
Don’t Spam Your Customers!
Provide Value
Get Permission
Unsubscribe Easily
Dr. Steven A. Gedeon sg@intelliaction.com
Shifting to email
Don’t Spam Your Customers!
Provide Value
Get Permission
Unsubscribe Easily
Dr. Steven A. Gedeon sg@intelliaction.com
Sales conversion process
Aware of you
Comprehend your offering
Convinced of the
superiority of your
offering
Buying
Dr. Steven A. Gedeon sg@intelliaction.com
Other PR Strategies
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Newsgroups/Forums
Affiliate programs
Exchanging links
Web rings
Word of mouth
Traditional PR methods – press releases,
contributions to trade publications,
speeches at conferences/industry events
Dr. Steven A. Gedeon sg@intelliaction.com
‘Traditional’ Media
• Put URLs and e-mail address on all
publications
• Other places for ads?
– T-shirts/clothing
– Posters
– Etc.
Dr. Steven A. Gedeon sg@intelliaction.com
Affiliate Programs
• Allows non-transaction based sites to refer
customers to site that will sell specific
goods
• Referrer site gets a fee from the sales site
• E.g. amazon.com ‘Associates’ program
– You earn up to 15% in referral fees
Dr. Steven A. Gedeon sg@intelliaction.com
Exchanging Links
• Links complementary web
sites
• You don’t have control over
how other sites
incorporate/display your link
– May be difficult to get your
link removed from other sites
Dr. Steven A. Gedeon sg@intelliaction.com
Internet Advertising
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Banner ads (e.g. doubleclick)
Sponsored links in search engines
Advertising glossary
Internet advertising links
thestar.com (see link on left for online
ads)
• Marketitright.com
Dr. Steven A. Gedeon sg@intelliaction.com
Strategic Alliances
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Can’t be an expert at everything
Source of leads
Don’t give away too much
Trust is key
Dr. Steven A. Gedeon sg@intelliaction.com
Key Issues
• Consistency in the Marketing Plan
• How do you reach the different customer
segments for your business?
• What do you think is the best strategy to get
people to your site?
• What promotional techniques are likely to be
most effective for your business?
Dr. Steven A. Gedeon sg@intelliaction.com