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com

© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 1

Managing Markets Strategically

Professor Noel Capon
R.C. Kopf Professor of International Marketing
Columbia Business School
New York, NY, U.S.A.

&
Professor Siddharth Shekhar Singh
Director Fellow Programme in Management & Associate Professor of Marketing
Indian School of Business
Hyderabad & Mohali, India
www.axcesscapon.com www.wileyindia.com Managing Markets Strategically
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 2

Section I: Marketing and the Firm

Chapter 1: Introduction to Managing Marketing
Chapter 2: The Value of Customers
Section II: Fundamental Insights for Strategic Marketing
Transition to Strategic Marketing
Section III: Strategic Marketing
Section IV: Implementing the Market Strategy
Section V: Special Marketing Topics
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CHAPTER 1

Introduction to
Managing Marketing
www.axcesscapon.com www.wileyindia.com The Core Marketing Challenge
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Get the Fundamentals Right

• Six marketing imperatives

• Four marketing principles

• Marketing as a philosophy
www.axcesscapon.com www.wileyindia.com The Fundamental Business Model
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Shareholder Value

Organizational Survival and Growth

Current and Potential Profits

Competitor
s
Attract, Retain, and Grow Customers
Competitor
s
Customer Value

Company
www.axcesscapon.com www.wileyindia.com Six Marketing Imperatives
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Session Roadmap A
• Imperative 1: Determine and recommend which markets to address

• Imperative 2: Identify and target market segments

• Imperative 3: Set strategic direction and positioning

• Imperative 4: Design the market offer

• Imperative 5: Secure support from other functions

• Imperative 6: Monitor and control

 Imperative 1: Determine and Recommend
www.axcesscapon.com www.wileyindia.com Which Markets to Address
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Investment Choices
• Where shall we invest?
• current businesses/markets
• new businesses/markets
• How much/when shall we invest?
• From which businesses/markets shall we:
• disinvest?
• withdraw?
• Roles for marketing
• Identify opportunities
• advise on proposed strategic actions
www.axcesscapon.com www.wileyindia.com Six Marketing Imperatives
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Session Roadmap A
• Imperative 1: Determine and recommend which markets to address

• Imperative 2: Identify and target market segments

• Imperative 3: Set strategic direction and positioning

• Imperative 4: Design the market offer

• Imperative 5: Secure support from other functions

• Imperative 6: Monitor and control

 Imperative 2:
www.axcesscapon.com www.wileyindia.com Identify and Target Market Segments
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 9

Target market segment

Two very different marketing tasks

• Creative and analytic
• Decision focused
www.axcesscapon.com www.wileyindia.com Six Marketing Imperatives
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Session Roadmap A
• Imperative 1: Determine and recommend which markets to address

• Imperative 2: Identify and target market segments

• Imperative 3: Set strategic direction and positioning

• Imperative 4: Design the market offer

• Imperative 5: Secure support from other functions

• Imperative 6: Monitor and control

 Imperative 3:
www.axcesscapon.com www.wileyindia.com Set Strategic Direction and Positioning
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 11

• Set performance objectives

• Craft the positioning statement

• Address markets in different development stages

• Make critical branding decisions

• Do we have a profitable business model?

 Imperative 3:
www.axcesscapon.com www.wileyindia.com Set Strategic Direction and Positioning
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Illustration: The Classic Life Cycle

www.axcesscapon.com www.wileyindia.com Six Marketing Imperatives
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Session Roadmap A
• Imperative 1: Determine and recommend which markets to address

• Imperative 2: Identify and target market segments

• Imperative 3: Set strategic direction and positioning

• Imperative 4: Design the market offer

• Imperative 5: Secure support from other functions

• Imperative 6: Monitor and control

www.axcesscapon.com www.wileyindia.com Imperative 4: Design the Market Offer
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 14

• Execute the value proposition

• Design the marketing mix

• Product
• Promotion
• Distribution
• Price

• Variations by market segment

• Implications for other functions

www.axcesscapon.com www.wileyindia.com Imperative 4: Design the Market Offer
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www.axcesscapon.com www.wileyindia.com Implications for Other Functions
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Marketing

Other Functions
www.axcesscapon.com www.wileyindia.com Six Marketing Imperatives
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 17

Session Roadmap A
• Imperative 1: Determine and recommend which markets to address

• Imperative 2: Identify and target market segments

• Imperative 3: Set strategic direction and positioning

• Imperative 4: Design the market offer

• Imperative 5: Secure support from other functions

• Imperative 6: Monitor and control

 Imperative 5:
www.axcesscapon.com www.wileyindia.com Secure Support from Other Functions
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Individual Silos Integrated Storage

 Imperative 5:
www.axcesscapon.com www.wileyindia.com Secure Support from Other Functions
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• Support for design

• Support for implementation

• Organizational levers
www.axcesscapon.com www.wileyindia.com Six Marketing Imperatives
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 20

Session Roadmap A
• Imperative 1: Determine and recommend which markets to address

• Imperative 2: Identify and target market segments

• Imperative 3: Set strategic direction and positioning

• Imperative 4: Design the market offer

• Imperative 5: Secure support from other functions

• Imperative 6: Monitor and control

www.axcesscapon.com www.wileyindia.com Imperative 6: Monitor and Control
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 21

• Are we achieving market/financial performance objectives?

• Are functional areas implementing the market offer?

• Are our objectives, strategies, and implementation plans in sync with

the environment?
www.axcesscapon.com www.wileyindia.com Imperative 6: Monitor and Control
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www.axcesscapon.com www.wileyindia.com Six Marketing Imperatives
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 23

Session Roadmap A
• Imperative 1: Determine and recommend which markets to address
• Imperative 2: Identify and target market segments
• Imperative 3: Set strategic direction and positioning
• Imperative 4: Design the market offer
• Imperative 5: Secure support from other functions
• Imperative 6: Monitor and control
www.axcesscapon.com www.wileyindia.com The Core Marketing Challenge
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 24

Get the Fundamentals Right

• Six marketing imperatives

• Four marketing principles

• Marketing as a philosophy
www.axcesscapon.com www.wileyindia.com Four Marketing Principles
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 25

Session Roadmap B
• Principle 1: Selectivity and Concentration

• Principle 2: Customer Value

• Principle 3: Differential Advantage

• Principle 4: Integration
www.axcesscapon.com www.wileyindia.com Principle 1: Selectivity and Concentration
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 26

• Selectivity
• Concentration
• Concentrate resources against those targets
www.axcesscapon.com www.wileyindia.com Four Marketing Principles
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 27

Session Roadmap B
• Principle 1: Selectivity and Concentration

• Principle 2: Customer Value

• Principle 3: Differential Advantage

• Principle 4: Integration
www.axcesscapon.com www.wileyindia.com Principle 2: Customer Value
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 28

The firm must focus on providing value to customers

• Customers do not want your products!
• Customer value should drive product and investment decisions.
• Market and financial performance relates directly to delivering customer value.
www.axcesscapon.com www.wileyindia.com Four Marketing Principles
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 29

Session Roadmap B
• Principle 1: Selectivity and Concentration

• Principle 2: Customer Value

• Principle 3: Differential Advantage

• Principle 4: Integration
www.axcesscapon.com www.wileyindia.com Principle 3: Differential Advantage
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 30

Differential advantage is a net benefit or cluster of benefits, offered to a

sizable group of customers, which they value and are willing to pay for, but
cannot get, or believe they cannot get, elsewhere.
www.axcesscapon.com www.wileyindia.com Principle 3: Differential Advantage
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 31

Differential Advantage:
• Emphasizes competition: customer value is not enough.
• Some advantages are better than others.
• All differential advantages eventually erode – renewing differential advantage is
crucial.
• The firm must be willing to cannibalize its differential advantage.
• A difference is not a differential advantage.
www.axcesscapon.com www.wileyindia.com Four Marketing Principles
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 32

Session Roadmap B
• Principle 1: Selectivity and Concentration

• Principle 2: Customer Value

• Principle 3: Differential Advantage

• Principle 4: Integration
www.axcesscapon.com www.wileyindia.com Principle 4: Integration
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 33

• The firm must carefully integrate all elements in design and execution
of the market offer.
• Integration in two areas:
• At the firm – functional areas/business units
• At the customer – marketing mix
• Integration requires:
• Agreement on priorities: functions/management levels/business units
• Cooperative working relationships among those designing and implementing the
market offer
• A shared value of serving customers – firm-wide external orientation
www.axcesscapon.com www.wileyindia.com The Core Marketing Challenge
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 34

Get the Fundamentals Right

• Six marketing imperatives

• Four marketing principles

• Marketing as a philosophy
www.axcesscapon.com www.wileyindia.com Marketing as a Philosophy
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 35

External Orientation
The extent to which the firm focuses attention on markets, customers,
competitors, complementers, and the environment in general.
www.axcesscapon.com www.wileyindia.com Marketing as a Philosophy
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External Orientation
Internal External
Orientation Orientation

• Do you treat customers as assets?

• Are you responsive to customer requests?
• Are you clearly focused on beating competitors?
• How quickly do you react to environmental changes?
• How well do your functions and business units work
together to deliver customer value?
www.axcesscapon.com www.wileyindia.com Marketing as a Philosophy
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Internal and External Orientations

Internal External
Orientation Orientation

• Operations • Customers
• Sales • Competitors
• Finance • Complementers
• Technology • Suppliers
• Environmental
forces
www.axcesscapon.com www.wileyindia.com Marketing as a Philosophy
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www.axcesscapon.com www.wileyindia.com Marketing as a Philosophy
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Lower prices

Reduce unit costs Volume increases

www.axcesscapon.com www.wileyindia.com External Orientation Philosophy
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 40

The externally oriented firm:

• Welcomes change
• Internalizes marketing as a philosophy
• Strives to reduce inter-functional boundaries
www.axcesscapon.com www.wileyindia.com The Core Marketing Challenge
© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 41

Get the Fundamentals Right

• Six marketing imperatives
• Four marketing principles
• Marketing as a philosophy
www.axcesscapon.com www.wileyindia.com

© Noel Capon and Siddharth Shekhar Singh, 2014. All rights reserved. PRESENTATION 1 OF 24 / 42

CHAPTER 1

Introduction to
Managing Marketing