The future belongs to those who see the possibilities before they become obvious. This presentation highlights the successfactors of innovative marketing strategies and implements the blue ocean strategy

1. International Marketing Management:
Success Factors of Alternative Marketing Strategies
Dr. Christine Falkenreck

2. 1. Strategy-related definitions | 2 Examples | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
Agenda
1 Strategy-related D fi i i
S l d Definitions and R l
d Relevance of the T i
f h Topic
2 Example
E l
3 Blue O
l Ocean S
Strategy
4 Success Factors of Al
S F f Alternative M k
Marketing S
Strategies
5 Summary
S
SMA Solar Technology AG 2
© Dr. Christine Falkenreck

3. Learning outcomes
• Understand nature role and impact of international marketing on
nature,
company goals
• Be able to describe the “Blue Ocean Strategy” as one example of
alternative marketing strategies
• Understand the importance of product innovations on the success
factors of marketing strategies
• Understand the issues and decisions involved in building on alternative
marketing strategies
• Strengthen participants’ abilities to think strategically and formulate a global
marketing strategy based on a deep understanding of customer needs and
value
© Dr. Christine Falkenreck

4. „Nobody really knows what
Nobody
strategy is.“
gy The Economist
…Do you?
© Dr. Christine Falkenreck 4

5. 1. Strategy-related definitions | 2 Examples | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
Strategy
Michael T. Porter (1980): Strategy is the creation of a unique and
valuable position, involving a different set of activities.
Brennan et al. (2007): Policies and key decisions adopted by management that
have mayor financial implications, involve substantial
resource commitment and are not easily reversible.
Marketing Strategies
− Market Scope Strategy (Si l M k t Strategy, Multi M k t Strategy, Totall Market Strategy)
(Single Market St t M lti Market St t T t M k t St t )
− Market Entry Strategy (First In Strategy, Early Entry Strategy, Laggard Entry Strategy)
− Product Strategy (Product Positioning, Repositioning, Product Scope, Design, New Product Strategy)
− Promotion Strategy (Promotion Mix Strategy, Media Selection Strategy Advertising Copy Strategy)
Strategy Strategy,
− Distribution Strategy (Distribution Scope Strategy, Multiple Channel Strategy)
− Pricing Strategy (Pricing Strategy for New and Established Products, Price Flexibility Strategy, Price
Leadership Strategy)
p gy)
© Dr. Christine Falkenreck 5

6. 1. Strategy-related definitions | 2 Examples | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
Success Factors
“There are a number of factors that impact the
success of a marketing strategy but none are more
strategy,
important than thoroughly understanding the target
market, setting clear and measurable goals and
j
objectives.” Kotler et al.,, 2007
To analyze marketing strategy success, one needs to specify variables that
measure firm performance and variables that measure international marketing
strategy and results.
Success is measured as growth in total sales, growth in earnings per share
and growth in average share prices.
© Dr. Christine Falkenreck 6

7. 1. Strategy-related definitions | 2. Example| 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
Why discussing success factors of alternative marketing strategies?
− Marketing is perceived as a cost, not an investment.
g p
− Company strategies are not defined by those who know and deal with the
markets. (remember: “Policies and key decisions adopted by management …“)
− Marketers are always asking for more money, but can rarely explain how
much incremental business this money will generate (feedback of 72% of
the CEOs).
− Marketers focus too much on the latest marketing trends such as social
media, because they believe they represent the new marketing frontiers– but
can rarely demonstrate how these trends will help them generate more
business for the company (feedback of 74% CEOs).
− Unlike CFOs and Sales Forces, they don’t think enough like
businesspeople: they focus too much on the creative, “arty” and “fluffy” side
of marketing and not enough on its business science, and rely too much on
their ad agencies to come up with the next big idea (feedback of 67% CEOs).
© Dr. Christine Falkenreck Verhoef & Leeflang (2009) 7
http://www.fournaisegroup.com/Marketers-Lack-Credibility.asp

8. 1. Strategy-related definitions | 2. Example| 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
Why are we discussing alternative marketing strategies?
http://hbr.org
8

9. 1. Strategy-related definitions | 2 Examples | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
Agenda
1 Strategy-related definitions and Relevance of the Topic
2 Example of a Successful Company
l f f l
3 Blue O
l Ocean S
Strategy
4 Success Factors of Al
S F f Alternative M k
Marketing S
Strategies
5 Summary
S
SMA Solar Technology AG 9

10. 1. Strategy-related definitions | 2. Example| 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
Example: Koenig & Bauer – manufactures 90% of all security presses
(Gelddruckmaschinen)
http://www.kba.com © Dr. Christine Falkenreck 10

11. 1. Strategy-related definitions | 2. Examples| 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
Koenig & Bauer Innovativeness is a key to a leading market position
© Dr. Christine Falkenreck 11

12. 1. Strategy-related definitions | 2. Examples| 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
Koenig & Bauer: Being close to the customer
Guiding Principles
Our customers inspire our policies
If you were the marketing manager…
Our workforce is our greatest asset
Our innovations secure our future - what would be your goal?
Our commitment is to quality - what could the marketing department
Our duty is to society do to support the objectives?
Our Objectives
To extend the frontiers of innovation
To become the technological leader in key markets
To expand our global market position in sheetfed offset, web offset, newspaper and
digital offset
To offer systems competence through in-house expertise or strategic alliances
in house
To maintain a consistently high standard of quality in both our products and our
services
To offer practical solutions to individual production needs
To intensify customer care
To maintain a high level of staff motivation and qualification
To enhance shareholder value
To protect the environment by improving press and production ecology
To fulfil our social and cultural obligations
© Dr. Christine Falkenreck 12

13. 1. Strategy-related definitions | 2 Examples | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
Agenda
1 Strategy-related definitions and Relevance of the Topic
2 Example of a S
E l f Successfull C
f Company
3 Blue Ocean Strategy
l
4 Success Factors of Al
S F f Alternative M k
Marketing S
Strategies
5 Summary
S
SMA Solar Technology AG 13

14. 1. Strategy-related definitions | 2 Example | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
“Standard” Marketing Strategy: Planning Roadmap
Standard
Who you Where you How you will
are are going
i get th
t there
Vision and Marketing Marketing g
Strategic
Critical Mission Objectives Strategy level
Basics
SWOT Marketing Marketing Planning
Goals Plan level
STP Action Implementation
Plans level
Components of Strategic Marketing Planning
STP= Segmentation, Targeting, Positioning 14
© Dr. Christine Falkenreck

15. 1. Strategy-related definitions | 2. Examples| 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
Alternative M k ti St t i
Alt ti Marketing Strategies…
• The idea of Blue Ocean strategy is to build new businesses where none
existed before.
• Start thinking about your processes from customer perspective.
© Dr. Christine Falkenreck 15

16. 1. Strategy-related definitions | 2. Examples | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
Why Blue Ocean Strategy?
y gy
• So-called Blue Ocean industries are more profitable than traditional
business fields with head-to-head competitors.
• In the Blue Ocean strategy, you must offer your customers a value
innovation (i.e. tangible product or service advancements) accompanied
by demonstrable savings.
y g
Think about Ryanair, which is not only flying people, but also providing the
whole holiday experience with accommodation and car rentals included.
Holiday does not start and end for people when they fly (that is how
traditional airlines used to think)…
© Dr. Christine Falkenreck 16

17. 1. Strategy-related definitions | 2. Examples | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
The Blue Ocean Strategy
gy
• Businesses naturally focus on current customers, a process that
invariably leads to g
y greater market segmentation analysis. But, real g
g y growth
lies beyond existing demand. To get to the open water, focus on
potential future customers.
• Assess your service’s or product’s usefulness, ease, handiness, safety,
entertainment value and environmental friendliness in light of how
each factor affects the customer upon buying it, bringing it home, using
it, ddi to it, keeping it working and eventually, di
it adding t it k i ki d t ll disposing of it
i f it.
• Remember that the customer experience is the process.
Apple did not satisfy with just creating new versions of iPhone, they
reinvented how people work with portable devices by introducing iPad.
That created them new reaches beyond traditional smartphone markets.
© Dr. Christine Falkenreck 17

18. 1. Strategy-related definitions | 2. Examples | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
Blue Ocean vs. Red Ocean Strategy
Blue Ocean Strategy Red Ocean Strategy
•Create uncontested market
•Compete in existing market
space
space
p
•Make the competition irrelevant
Make
•Beat the competition
•Create and capture new
•Exploit existing demand
demand
•Break the value-cost trade off
value cost •Make the value-cost trade off
•Align the whole system of a •Align the whole system of a
firm‘s activities with its strategic firm‘s activities with its strategic
choice of differention and low choice of differention or low cost
cost
© Dr. Christine Falkenreck 18

19. 1. Strategy-related definitions | 2. Example | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
Example: Automobiles:
What kind of strategic logic is needed to guide the creation of blue oceans?
Identification of key strategic elements
At the end of the nineteenth century, the automobile industry was small and
unattractive.
unattractive
More than 500 automakers in America competed in turning out handmade
luxury cars that cost around $1,500 and were enormously unpopular with all but
$1 500
the very rich.
Anticar activists tore up roads, ringed parked cars with barbed wire, and
organized boycotts of cardriving businessmen and politicians.
Woodrow Wilson caught the spirit of the times when he said in 1906 that “nothing
g p g
has spread socialistic feeling more than the automobile.”
19
© Dr. Christine Falkenreck

20. 1. Strategy-related definitions | 2. Example | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
Automobiles:
Identification of key strategic elements
Incumbent: company is already active in the field.
harvard business review • october 2004 *The blue oceans made by incumbents were usually within their core businesses.
20

21. 1. Strategy-related definitions | 2. Example | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
GM car for every purse and purpose
Alfred Sloan explained his famous market segment strategy of
"a car for every purse and purpose" in the 1924 annual report to
a purpose
shareholders.
Sloan divided the U.S. vehicle market into segments by price
range. Each GM brand’s products was to be focused on one
g p
segment, with Chevrolet at the low end of the market and
Cadillac at the high end.
With rival Ford Motor Company sticking to a single model in
a single segment (the low-end Model T), GM soon overtook
Ford as the sales leader in the U.S. market.
If your not thinking segments, you’re not thinking. To think
fy g g y g
segments means you have to think about what drives
customers, customer groups, future customers and the
choices that are or might be available to them.
Ted Levitt, Marketing Imagination
© Dr. Christine Falkenreck 21

22. 1. Strategy-related definitions | 2. Example | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
Why not focus on competition?
Of course competition matters.
p
But by focusing on competition, scholars, companies, and consultants have
ignored two very important— and, far more lucrative—aspects of strategy: One is
g y p p gy
to find and develop markets where there is little or no competition—blue
oceans—and the other is to exploit and protect blue oceans.
These challenges are very different from those to which strategists have devoted
most of their attention.
Kim & Mauborgne (2005) © Dr. Christine Falkenreck 22

23. 1. Strategy-related definitions | 2. Example | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
Four Action Framework to find and develop markets where there
is little or no competition—blue oceans
Which of the factors that the industry takes
Eliminate for granted should be eliminated?
Which factors should be reduced well
Reduce below the industry‘s standard?
Raise Which factors should be raised well above
the industry‘s standard?
Which factors should be created that the
Create industry has never offered?
Kim & Mauborgne (2005) © Dr. Christine Falkenreck 23

24. 1. Strategy-related definitions | 2. Example | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
Four Action Framework: the IKEA Idea : Providing Exceptional Customer Experiences
Personel to mount furniture at the customer‘s home, high
Eliminate price furniture of different brands
Reduce Costs for presentation of furniture, costs for sales people
Choice and variation of own brand furniture, multi-language
advertisments (Berlin:German-Turkish)
( )
Raise Market segmentation, focus on a certain target group: raise
awareness for „value for money“ furniture, where money can
be safed by involving the customer in the service
The IKEA Philosophy: Unique sets of furniture, exclusively
designed for IKEA, self transportation, storage room is sales
Create room,
room restaurants and entertaining kindergarden for
customer‘s children, „IKEA Family“ customer club
© Dr. Christine Falkenreck 24

25. 1. Strategy-related definitions | 2. Example | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
© Dr. Christine Falkenreck 25

26. 1. Strategy-related definitions | 2. Example | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
Ein weiterer „blue ocean“: Ikea Business
© Dr. Christine Falkenreck 26

27. 1. Strategy-related definitions | 2 Example | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
Agenda
1 Strategy-related definitions and Relevance of the Topic
2 Example of a S
E l f Successfull C
f Company
3 Blue Ocean Strategy
l
4 Success Factors of Alternative Marketing Strategies
f l k
5 Summary
S
SMA Solar Technology AG 27

28. 1. Strategy-related Definitions | 2. Examples | 3. Blue Ocean Strategy| 4. Success Factors and Limitations| 5. Summary
Generally:
Make t t i
M k strategic marketing a core competency
k ti t
Be prepared to work together with you colleauges on …
1. focus and invest resources and competencies to win in a few
attractive and clearly defined markets
2. view business in terms of opportunities in value-based market
segments to obtain optimal response
3.
3 provide a superior offering t the market segments based on a
id i ff i to th k t t b d
defensible competitive advantage
4. implement plans exceedingly well by anticipating and eliminating
barriers to organizational growth and change
Kotler, P., Berger, R. & Bickhoff, N. (2010) © Dr. Christine Falkenreck 28

29. 1. Strategy-related Definitions | 2. Example | 3. Blue Ocean Strategy| 4. Success Factors and Limitations| 5. Summary
Success factors of Alternative Marketing Strategies
S f t f Alt ti M k ti St t i
Head-to-Head Competition Blue Ocean Creation
Industry Focuses on rivals within its Looks across alternative
industry industries
Strategic group Competitive position within Looks across strategic
strategy groups within industry
Buyer group Better serving the buyer group Redefines the industry buyer
g p
group
Scope of product or Maximizing the value of product Looks across to
service offering and service offerings within the complementary product and
bounds of its industry service offerings
Functional-emotional Improving price performance Rethinking the functional-
orientation within the functional-emotional emotional orientation of the
orientation of its industry industry
Time Adapting to external trends as Participates in shaping
they occur external trends over time
Kim & Mauborgne (2005) © Dr. Christine Falkenreck 29

30. 1. Strategy-related Definitions | 2. Examples | 3. Blue Ocean Strategy| 4. Success Factors and Limitations| 5. Summary
1. Find the Customer Value in your Target Segment
Unique offering
q g Protected advantageg
– Patented innovation/trade secrets Success based on
uniqueness
– Innovative products
– Customer service (operations and technical)
Differentiated offering Marketing advantage
– Value pricing
– Unique selling propositions Success based on
– Integrated communication Value
– Creative distribution and logistics
– Brand equity
Kotler, P., Berger, R. & Bickhoff, N. (2010) © Dr. Christine Falkenreck 30

31. 1. Strategy-related Definitions | 2. Examples | 3. Blue Ocean Strategy| 4. Success Factors and Limitations| 5. Summary
2. Bear in mind that innovativeness is the key driver to company
success – be a partner to CFOs and heads of business development
• be measurable, not only creative: prove the generation of business
growth
3. Set clear measurable goals (marketing controlling)
• What are the goals of the new strategy?
• What are the new targets and milestones?
• Who is responsible for what?
4. Evaluate the possibility of strategic marketing partnerships
p y g gp p
• Co-Branding
• Ingredient Branding
• Franchise
5. Look across alternative industries (market research)
• find and develop markets where t e e is little o no co pet t o
d a d de e op a ets e e there s tt e or o competition
—blue oceans
© Dr. Christine Falkenreck 31

32. 1. Strategy-related Definitions | 2. Examples | 3. Blue Ocean Strategy| 4. Success Factors and Limitations| 5. Summary
Here are some reflective questions that you may ask:
• Are your organization’s market boundaries clear to you?
• Do you understand where your customer’s market boundaries are?
• Are you seeing the big picture?
• Do you understand where demand for services and products in your target
customer groups come from?
• Are you able to work together as a team towards a common g
y g goal or does
internal hurdles slow you down?
• Is providing exceptional customer experiences built into your marketing
strategy?
The road to success is always under construction.
Unkown
© Dr. Christine Falkenreck 32

33. 1. Strategy-related definitions | 2 Examples | 3. Blue Ocean Strategy| 4. Success Factors| 5. Summary
Agenda
1 Strategy-related definitions and Relevance of the Topic
2 Example of a S
E l f Successfull C
f Company
3 Blue Ocean Strategy
l
4 Success Factors of Alternative Marketing Strategies
f l k
5 Summary
S
SMA Solar Technology AG 33

34. 1. Strategy-related Definitions | 2. Examples | 3. Blue Ocean Strategy| 4. Success Factors and Limitations| 5. Summary
Was sind für Sie Erfolgsfaktoren alternativer Marketing Strategien?
− nah am Kunden sein und das „große Ganze“ im Blick behalten
− Stellenwert von Produktinnovation kennen: Für welche neuen
Produkteigenschaften ist der (zukünftige) Kunde bereit zu zahlen?
− Neue Geschäftsideen für neue Märkte
− Gute Kontakte zu anderen Unternehmensbereichen und möglichen
Partnern (Stichwort Co-Branding, Franchise) pflegen.
− Marketing-Controlling : Quantifizierbare Marketingziele „ Verkaufsumsatz pro
Produkt und Marktsegment während der Laufzeit des Planes“
Planes
− Marktsegmentierung und Marktforschung
− „internes Marketing“ als Beitrag zur Mitarbeitermotivation und
Mitarbeiterinformation – und zum Überwinden von „internen Aktzeptanzhürden“
„ p
Die Suche nach „Blue Oceans“ – neuen Märkten mit Entwicklungspotenzial
und wenig Wettbewerb – schafft neue Möglichkeiten, das Unternehmen im
Möglichkeiten
Markt zu positionieren, Marktanteile auszubauen und Raum für Innovationen
zu schaffen.
Dadurch wird ein Unternehmen unabhängig vom (Preis) Wettbewerb.
© Dr. Christine Falkenreck 34

35. 1. Strategy-related Definitions | 2. Examples | 3. Blue Ocean Strategy| 4. Success Factors and Limitations| 5. Summary
Mintzbergs Grundthesen zur Formulierung erfolgreicher Strategien
Stichwort „Gras Roots Strategy“
• Es gibt nicht den Weg der S
Strategieformulierung. Es kann nicht von
f
vornherein festgelegt werden, wie und wo Strategien entstehen.
• Der Prozess der Strategieformulierung darf nicht überkontrolliert werden. Es
ist wichtiger, Vielfalt im Unternehmen entstehen zu lassen – als eine
unnatürliche Konsistenz von Handlungsansätzen im Unternehmen zu
erzwingen.
g
• Es müssen Freiräume geschaffen werden, in denen sich Strategien
eigendynamisch entwickeln können.
• breites Feld kreativer Potenziale, Ressourcen zur Steigerung der
Lernfähigkeit. Mitarbeiter sind heute in Netzwerken organisiert und schaffen
übergreifenden Austausch.
Erfolgreiche Unternehmen organisieren sich anders, definieren ihre
Verantwortung übergreifend (Corporate Governance, Corporate Citizenship) und
aktivieren ihre Mitarbeiter anders als früher.
Mintzberg, Ahlstrand, & Lampel (2001) 35

36. Literature
• Brennan, R. Canning, L. & McDowell, R. (2007): Business-to-Business
Marketing, Sage
• W.Chan Kim & Renée Mauborgne (2005): Blue Ocean Strategy – How to Create
Uncontested Market Space and Make the Competition Irrelevant
• P. C. Verhoef & P. S.H. Leeflang (
g (2009): Understanding the Marketing
) g g
Department’s Influence Within the Firm, Journal of Marketing, Vol. 73
• H. Mintzberg,B. Ahlstrand, & J.Lampel (2001): Strategy Safari: A Guided Tour
Through The Wilds of Strategic Mangament, Free Press, NY
• Kotler, P., Berger, R. & Bickhoff, N. (2010): The Quintessence of Strategic
Management, Springer
• M T P t (1980): C
M.T. Porter (1980) Competitive Strategy: Techniques for Analysing Industries
titi St t T h i f A l i I d ti
and Competitors
Electronical resources
http://www.ikea.com/ms/de_DE/about_ikea/the_ikea_way/our_business_idea/index.html
http://history.gmheritagecenter.com/wiki/index.php/1924,_%22A_Car_for_Every_Purse_and_Purpose%22
http://history gmheritagecenter com/wiki/index php/1924 %22A Car for Every Purse and Purpose%22
http://hbr.org
http://www.fournaisegroup.com/Marketers-Lack-Credibility.asp
36

37. The future belongs to those
who see possibilities before they become obvious.
Unknown
37

38. Beispiel: Vernetzung strategischer und operativer Marketing- und Vertriebsplan
Auszug aus der Marketingstrategie:
-Erschließung des Absatzmarktes in Fernost
- Ausbau der Dienstleistungen
Auszug aus der strategischen Marketing- Auszug aus der operativen
und Vertriebsplanung Marketing- und Vertriebsplanung
Ziele: Aktivitäten: Budgets: Ziele: Aktivitäten Budgets:
-Mittelfristige -Definition eines - erfolgreicher
-Planung und
Etablierung in Marktentwick- -25 Mio EUR Markteintritt in -7 Mio EUR
Umsetzung des
Japan und lungskonzeptes Japan und
Markteintritts in
Südkorea unter Südkorea bis
Japan und
fünfgrößten Jahresende,
Südkorea
Anbietern am Marktanteil
Markt > 5%
- Steigerung des
- Umsetzung
Anteils an - Entwicklung - Steigerung - 6 Mio EUR
der ersten
Dienstleistungen neuier - 21 Mio EUR des
Geschäfts-
am Geschäfts- Dienstleistung
konzepte im
Gesamtumsatz konzepte im santeils auf
Dienstleistungs
auf 40% i 5
f in Dienstleistungs-
Di l i 25% bis
2 % bi
bereich
Jahren bereich Jahresende
Zunehmende Detaillierung und Kurzfristigkeit 38