The Manager's View

For those of you that are looking for a simple process for launching a new product or entering a new market, I have developed a checklist below that can be used for either. Checklist 1.      State your company mission – This is why the business exists or will exist. Coca Cola is a good example, their mission talks about refreshing the world, creating value and inspiring happiness and optimism. Note there is nothing said about selling Coke. 2.      State your company vision – This is how the company will create value for the company, the customer and collaborators. Again, Coca Cola is a good example. The coke vision talks about being a great place to work, building a portfolio of quality beverage brands, nurturing a winning network of customers and suppliers, being a responsible citizen, being a profitable company and being a lean, effective and fast moving company. 3.      Does the new product or new market fit wit...

When I worked as a newspaper executive we had a special sales group called print specialists. This group typically was comprised of the more senior and gifted sales personnel. These specialists had knowledge of ROP (in-paper) advertising, preprints, commercial printing, direct mail and production processes. This group sold the more complicated products and assisted sales people selling more traditional lines of newspaper products in broadening the scope of sales opportunities. A print specialist was able to set down with an advertiser and develop an advertising program that best suited the customer’s needs. The program could include ROP ads coupled with a direct mail campaign with customized brochures reaching targeted audiences. Sales commission programs encouraged all sales groups to use the expertise of the print specialist. Using this approach all sales personnel had an opportunity to increase their income while improving the newspaper’s profits and providing real valu...

Disruptive Innovation theory holds that disruptive innovations result from a new industry entrant finding a way to better serve the industry leader’s least profitable customers. After the new entrant has captured the least profitable customers from the industry leader it begins to pursue the next level of customers that are underserved by the industry leader. This process continues until the new market entrant displaces the industry leader. This is well researched and there is a large body of evidence to support this theory of market disruptions. It does not, however, explain disruptions that seem to take place at the top of the customer value chain. For example the disruption of the nylon tire business by the steel belted radial tire was not due to unprofitable customers being underserved by the industry leader (DuPont). Rather it was the need for a superior tire that was sought by the most profitable customers. For newspapers, the first segment of business to be lost was...

Value creation is a phenomenon that is much discussed and is the basis for all economic activity. That is, for a product or service to be sold it must be viewed as providing some value for the purchaser. In some instances, value is based on long-standing measurements and is tied to supply and demand. The more some thing is demanded when there is a limited supply results in an increase in its value. For individuals with new products or services, determining value is critical to the success of a new venture. In these situations there is no history to gauge value that might be based on supply and demand. There is only anecdotal and (at times) research based evidence on the potential value of the new offering. In the early 1970s Gerald Zaltman (Processes and Phenomena of Social Change, Wiley Interscience, 1973) conducted research based on social change. In these studies he determined that there were several factors that caused societal change. In the late 1970s I used thes...

In order to develop any marketing strategy, a strategist must consider how value will be created for the company, the customer and the collaborators. Pictured in the graphic below, the highest strategic value is created when the value for each of the participants (customers, collaborators and the company)  coincide or overlap.  The larger the area of common value, the greater the chance for strategic success. As the overlapping areas decrease in size the more difficult the strategy will be to execute successfully.   As discussed in earlier blogs value is created by using the 4 Ps of marketing: Price, Place, Product and Promotion.  In the grid below a strategist can address the value for each of the four Ps as it relates to the customers, collaborators and the company. Each of the four Ps must be in alignment with each other and create the intended value for each of the participants. When the area of the participants'  common value is ...

There is a process for developing a successful Marketing Strategy. The steps outlined below describe that process: I.                State the Mission   - This is a description of the purpose of the quest. For example Coca Cola’s Mission is to: refresh the world, inspire optimism, to create value and make a difference. II.              State the Vision - This is a description of how value is created for all who participate in the quest or a business. For businesses, the Vision describes how value will be created for the customers, the collaborators and the company. III.            State the Objective – This is a description of the desired outcome of the strategy. The objective must have a quantifiable and a timing element.   An example would be “to increase sales 5% in 6 months”. IV.  ...

The graphic above, used in Alexander Chernev's Marketing Plan Handbook, is an illustration of how optimal value is created for business strategy. As the graphic suggests optimal value is created when a strategy provides adequate value for the company providing a product or service, adequate value for the customer and adequate value for any collaborators facilitating the interaction between the customer and the company. As the graphic suggests, the optimal value that insures strategic success provides success for all three participants: customers, collaborators and the company providing the service or product. Also as the graphic suggests an increase in optimal value for one of the participants can mean a reduction in the value for the other participants. For example a strategy that has too much focus on the customer can reduce the ability of the company to survive by putting undue negative pressure on profit margins. Collaborators can be critical to the succ...

I teach a consulting lab at the University of Houston's C.T. Bauer College of Business. Each semester two to four companies are selected to have a team of MBA students assigned to work with key company executives on a business challenge. Each team of students is selected from a field of applicants. The students’ resumes are reviewed and the faculty makes final selection for the team. In previous semesters projects have ranged from location and market entry strategies for banks, organizational design for moving intellectual property from design to commercialization for a telemedicine collaboration and the development of space use efficiency programs for a major airport system . For the immediate future projects include a marketing strategy for an Internet of Things software company, a marketing strategy for a global writer/author association and a manpower efficiency study for a major airport system. To participate a company must complete an application (shown below) and be...

Here is the third example of developing a marketing strategy project for a new product. This is a fictional company developed by a team of MBA students in my marketing strategy course at the University of Houston C.T. Bauer College of Business. Executive Summary Avenir is a forward thinking and progressive technology company seeking to positively impact the lives of our customers, collaborators, and shareholders through the creation of new technology.  We were established in 2001 and are proud to employ 211 hardworking individuals at our Houston, TX headquarters. Avenir designs, markets and licenses the K-1 battery, a new kinetic powered battery that will enhance cellular telephone battery life.  The K-1 battery will alleviate the need to constantly charge cellular phone batteries through electronic devices.  Our new battery offers a significant leap forward in the world of portable electronic power to the cellular customer. Our collabo...