MM2: Advanced Marketing Management

1
MM2 Advanced Marketing Management
Session 1

• Todays Agenda
• Introduction conventions
• Basic marketing strategy tools
• Examples of successful marketing strategies

2
Introduction

• Logistical Issues
• Rules
• Start on time and finish on time
• Turn off mobile phones before class
• Grading
• Individual-based
• 65 Final exam (not based on writing skills)
• 10 Contribution to class via constructive
  participation
• Group-based
• 25 your Markstrat firms performance

3
Course Objectives

• Successful market management depends on
  managers ability to think strategically
  translate that thinking into results-getting
  actions. (Aaker)
• Learn practice how to think strategically
• Develop a strategic perspective on marketing
  analysis decisions learn how marketing can
  create effective competitive advantages
• Learn (by doing) how to translate ideas to
  results-getting actions
• MARKSTRAT
• Learn to implement concepts tools in a unique
  competitive environment offering excellent
  feedback
• Refine your marketing decision-making abilities
• Case study analyses, discussions, etc.

4
A Central Feature of MMIIThe MARKSTRAT
Simulation

• Generations 1,2, now 3 used worldwide for over a
  decade in
• University classrooms
• Executive development
• Company training
• Research

5
Objectives of Using MarkStrat

• Put you in the drivers seat experience
• Competitive interactions
• Uncertainty
• Change
• Have you make marketing decisions
• Strategic and tactical
• Marketing mix and resource allocation
• Trade-offs
• Work effectively in a team cope with pressure
• Experiment, make mistakes, and learn from them.

6
How we will Operate

• Customized scenario for this promotion
• Fixed time (3.25 hours-- 2 consecutive sessions)
• First output available at MBA desk on Tue., 11/3
  at 130 PM, at beginning of each decision
  thereafter
• Each round team rep. shows ID signs for output
• Assigned cubicle is yours for two class sessions
  (only)
• Second session consultant available to assist
  you (only if needed within limits)
• Will help you to reason it through once youve
  given it your best effort
• If you want to install MarkStrat on laptop DO NOT
  use diskettes!
• Guidelines to be provided

7
Basics of Marketing Strategy
8
What is Strategy?

• The science art of employing political,
  economic, psychological military forces to
  afford maximum support to adopted policies in
  peace or war
• Merriam Websters Dictionary
• Art of so moving or disposing troops or ships as
  to impose on the enemy the place time
  conditions for fighting preferred by oneself
• Oxford English Dictionary

9
A Successful Marketing Strategy

• A successful marketing strategy should
• Deliver value to customers
• Be robust to
• Actions of our competitors
• Other changes in the environment
• Be one we can implement
• Bottom line
• Built around those competitive advantages of the
  firm that are highly valued by customers

10
Competitive Advantages

• Porters generic strategies differentiation, low
  cost, focus.
• Other examples of competitive advantagesinnovatio
  n, speed, brand equity, etc.

Competitive Advantage
Low Cost
Differentiation
Broad
Cost leadership
Differentiation
Competitive Scope
Focus
Narrow
11
Source of Competitive Advantages Firm
Capabilities

• Definition
• The capacity to perform an activity that involves
  complex coordination cooperation between people
  other resources (Schulze)
• Examples
• Excellent customer service
• Extraordinary RD
• Key characteristics
• Generate value to customers
• Hard for other firms to duplicate
• Rewards can be captured by the firm

12
Mini Case Study I Stew Leonards

• Questions
• Why is Stew Leonards so successful?
• What are the limitations of Stew Leonards
  Strategy?

13

• Southwest Airlines

14
Southwest Airlines Enters

• Started 1971
• Limiting operations to Texas
• Commuters are an important segment
• Marketing of airlines just like a packaged
  consumer product
• Discounting, clubs, services price
• Aggressive wooing of customers via a great
  attitude
• Passengers given the experience of flying

15
Southwest Today

• Consistent profitability in 25 years
• Only airline in industry with no fatal accident
• Known as a fun company, for customers
  employees alike
• Great personnel (friendly believe in what the
  firm stands for/one of the best firms to work
  for)
• Exceptionally efficient
• 11.5 hours of plane utilization per day (instead
  of 8.6 for industry)
• Quickest gate turn-around in industry
• No meals, no assigned seats
• Use of secondary airports
• Standardization around Boeing 737 (hundreds of
  planes)
• Youngest fleet in industry (among large players)
• No connection with other airlines, no baggage
  transfers
• Southwest model being copied world-wide

16

• Crude but Useful Rules for Marketing Strategy

17
Rule 1 Basic Forces of Change

• Competition
• Experimentation everyone seeks new ways to make
  money
• Imitation if you make a lot of money, or even
  seem as though you may, someone will copy what
  you do
• Particular competitive advantages will generally
  not last
• Customers
• Learning determinants of desirability change
• Assimilation preferences are perishable
  expectations increase
• Value will generally not last
• Beware of the boiling frog syndrome

18
Summary of Class 1

• Introduction Logistical Issues
• Concepts
• Marketing strategy
• Competitive advantage
• Firm capability
• Marketing Strategy Tools
• Porters generic differentiation strategies
• Listening to customers
• Shaping customer preferences
• Crude Marketing Strategy Rule 1 Basic Forces of
  Change

19
For the Next Class

• Read come prepared to discuss the Sealed Air
  Case
• Read Aaker Ch. 4 5
• Skim Further Readings (importance rank ordering
  Levitt gt Lehmann Winer)
• Consider starting to read the Markstrat manual