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1 MB 572 Differentiation and Marketing Innovation Key instructors: ดร. สุทธาวรรณ จีระ พันธุ ดร. โรจนศักดิ์ โฉมวิไล ลักษณ์

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1 1 MB 572 Differentiation and Marketing Innovation Key instructors: ดร. สุทธาวรรณ จีระ พันธุ ดร. โรจนศักดิ์ โฉมวิไล ลักษณ์

2 2 Course Description แนวคิดหนึ่งที่มีความสำคัญต่อการแข่งขันทาง การตลาดในปัจจุบัน คือ การสร้างความ แตกต่าง และการสร้างนวัตกรรม ดังนั้น การศึกษาวิชานี้ นักศึกษาควรได้รับความรู้ ความเข้าใจ และมีโอกาสประยุกต์ความรู้ เพื่อให้ทักษะเกี่ยวกับกระบวนการและวิธีการ พัฒนานวัตกรรม (Innovation process) การ สร้างความแตกต่าง (Differentiation) การ ก่อกำเนิดแนวคิด (Creativity) การพัฒนา แนวคิดต่างๆดังกล่าวไปสู่เชิงพาณิชย์ (Commercialization) และเพื่อสร้างความ ได้เปรียบเชิงแข่งขัน (Competitive advantages)

3 3 Objectives เพื่อทราบและเข้าใจแนวคิด และทฤษฎี พื้นฐานที่สำคัญเกี่ยวกับกระบวนการและ วิธีการพัฒนานวัตกรรม (Innovation process) การสร้างความแตกต่าง (Differentiation) การก่อกำเนิดแนวคิด (Creativity) เพื่อศึกษาและฝึกทักษะ โดยการประยุกต์ ความรู้ความเข้าใจแนวคิด และทฤษฎีพื้นฐาน ดังกล่าว โดยการวิเคราะห์และสังเคราะห์ สร้างหรือออกแบบ แบบจำลองงานนวัตกรรม ของส่วนประสมการตลาดเชิงพาณิชย์และเพื่อ การสร้างความได้เปรียบเชิงแข่งขัน

4 WeekDateTopics and instructorAssignment 130 Oct  Core marketing strategies: cost leaderships, differentiation, and focus  Differentiation and competitive advantage  Differentiation and Blue ocean concept  Session facilitator : ดร. สุทธาวรรณ และ ดร. โรจนศักดิ์ Read Chapter 1 and case study for discussion in the next session ทำข้อตกลงร่วมกัน ในการกำหนดหัวข้อ ศึกษา และรายงาน Term paper 26 Nov  Innovation management introduction  Innovation process  Creativity  Commercialization and innovation  Session facilitator : ดร. สุทธาวรรณ Read Chapters 3 and 4 and case studies for discussion in the next session Case study presentation 313 Nov  Managing innovation within firm  Innovation and operations management  Session facilitator : ดร. สุทธาวรรณ Read Chapters 6 and 7 and case studies for discussion in the next session Case studies presentation 4 27 Nov  Managing organizational knowledge  Strategic alliance and networks  Session facilitator : ดร. สุทธาวรรณ Read Chapter 9 and case study for discussion in the next session Case studies presentation Submit progress report of term paper to 2 instructors’ s 54 Dec  Managing R&D projects  Session facilitator : ดร. สุทธาวรรณ Revise Chapters 1,3,4,6,7 and 9 for mid-term examination Case study presentation 611 Dec Guest speaker: คุณมิ่งมงคล ทวีกุลวัฒน์ Senior account director, Spa advertising Co., Ltd. Revise Chapters 1,3,4,6,7 and 9 for mid-term examination 718 Dec Guest speaker: คุณมิสสพล มิตรเวโรจน์ Managing Director, Inthaco Co., Ltd. Read Chapters 11, and 14 for discussion in the next session 8ตรวจสอบข้อมูลจา บัณฑิตวิทยาลัย Mid-term examination

5 WeekDate Topics and instructorAssignment 98 Jan  Product and brand strategy  New product development  New 8 P’s development  Packaging and product development  New service innovation  Session facilitator : ดร. โรจนศักดิ์ quiz 1 Read Chapter 10, 15 and 16 for discussion in the next session Assignment 1: Term report proposal development 1015 Jan  Market research and new 8 P’s development  Managing new 8 P’s development  Session facilitator : ดร. โรจนศักดิ์ quiz 2 Present and discuss Assignment 1 (submission) 1122 Jan  Presentation & Discussion the progress of term report  Discussion the scope and details of selected 8 P’s innovation development as the term paper report  Session facilitator : ดร. โรจนศักดิ์ quiz 3 Assignment 2 ( กำหนดโดยผู้สอน ) 1229 Jan  Presentation & Discussion the progress of term report  Session facilitator: ดร. โรจนศักดิ์  การประเมินผล ผลงานนวัตกรรมของ นักศึกษาครั้งที่ 1 (10% ของคะแนน รวมทั้งภาคการศึกษา) 135 Feb  Presentation & Discussion the progress of term report  Session facilitator: ดร. โรจนศักดิ์  การประเมินผล ผลงานนวัตกรรมของ นักศึกษาครั้งที่ 2 (10% ของคะแนน รวมทั้งภาคการศึกษา) 1412 Feb  Presentation & Discussion the progress of term report  Session facilitator: ดร. โรจนศักดิ์  การประเมินผล ผลงานนวัตกรรมของ นักศึกษาครั้งที่ 3 (10% ของคะแนน รวมทั้งภาคการศึกษา) 1519 Feb  Presentation & Discussion the progress of term report  Session facilitator & Evaluation: ดร. โรจนศักดิ์ และ ดร. สุทธาวรรณ  การประเมินผล ผลงานนวัตกรรมของ นักศึกษาครั้งที่ 4 (20% ของคะแนน รวมทั้งภาคการศึกษา) 16ตรวจสอบข้อมูลจาก บัณฑิตวิทยาลัย Final examination *** ไม่มีการสอบปลายภาค ***

6 6 Course Evaluation Case studies presentation10% Quiz, assignments, and class attention 10% Term paper50% Mid-term Examination30% Final Examination - %

7 7 Main text Trott, Paul (2008) Innovation Management and New Product Development, 4th Edition, Pearson Education Limited, Essex, England.

8 8 The World’s Most Innovative Companies 1. Apple 2. Google 3. Toyota Motor 4. General Electric 5. Microsoft 6. Tata group 7. Nintendo 8. P&G 9. Sony 10. Nokia 11. Amazon 12. IBM 13. Research in Motion 14. BMW Source: Jena McGregor, ‘Most innovative companies’, Business Week, 2008

9 9 15. Hewlett-Packard 16. Honda 17. Walt Disney 18. General Motors 19. Reliance Industries 20. Boeing 21. Goldman Sachs group 22. 3M 23. Wal-Mart stores 24. Target 25. Facebook The World’s Most Innovative Companies Source: Jena McGregor, ‘Most innovative companies’, Business Week, 2008

10 10 Topics Core marketing strategies: cost leaderships, differentiation, and focus Differentiation and competitive advantage Differentiation and Blue ocean concept

11 11 Competitive Advantage The key superior performance is to gain and hold a competitive advantage through differentiation of product offering, which provides superior customer value or by managing for lowest delivered cost.

12 12 Competitive Advantage Competitive advantage is the advantage over competitors gained by offering greater value either through lower prices or by providing more benefits that justify higher prices.

13 13 Sources of Competitive Advantage Superior skills Superior resources Core competences Value chain

14 14 Core Marketing Strategies Competitive strategies Cost leadership Differentiation Cost focus and Differentiation focus

15 15 Cost leadership To become the low cost producer in the industry A cost leader must achieve parity or at least proximity in the bases of differentiation Often achieve by economies of scale

16 16 Achieving Cost Leadership Economies of scale Experience Capacity utilization Linkages Integration Timing Inter-relationships Location

17 17 Differentiation To be unique in the industry along some dimensions that are widely valued by buyers Premium price for product; but cannot ignore cost position (still should decrease cost) Differentiation: product/ distribution/ sales/ marketing/ service/ image, etc.

18 18 Focus To be best in a segment or group of segments Two variants: cost focus & differentiation focus

19 19 Achieving Differentiation Uniqueness drivers Product and/or Service differentiation Quality/ packaging/ branding/ service Pricing differentiation Price war vs. Premium pricing Promotional differentiation Promotional tools/ message Distribution differentiation Shopping by phone through TV-based catalogues/ the Internet Brand differentiation Unique emotional proposition

20 20 How to Differentiate A three- step process 1. Defining the customer value model 2. Building the customer value hierarchy (i.e. a fine restaurant) o Basic –food is edible and delivered o Expected – good china/ tableware/ tablecloth/ napkin/ flowers/ service/ well-prepared food o Desired – pleasant/ quiet/ interesting & great food o Unanticipated – complementary sorbet 3. Deciding on the customer value package

21 21 Sustaining Competitive Advantage Unique and valued products Clear, tight definition of market targets Enhanced customer linkages Established brand and company creditability

22 22 STP Marketing Segmentation Target market size, growth, attractiveness, company objectives and resources Positioning Product position/ positioning map Competitive differentiation

23 23 Competitive Positioning Strategy Advantage-creating resources;- Contribute to providing value for customers Are unique to the firm Are hard for competitors to acquire or imitate

24 24 Competing through the New Marketing Mix 4Ps Product Price Promotion Place 4Cs Customer needs/ wants Cost to satisfy Communication Convenience to buy

25 25 The Market Offer Key product/service concepts Product/service choice criteria: rational/ emotional/ lifestyle/ assurance brand Product/service differentiation Diffusion of innovation Managing the product over its life cycle The impact of the Internet on market offering

26 26 Differential AdvantageValue to Customer Product performanceLower cost; higher revenue; safety; pleasure; status DurabilityLonger life; lower costs ReliabilityLower maintenance and production cost; higher revenue; fewer problems Marketing Mix: Product

27 27 Differential Advantage Value to Customer StyleGood looks; status UpgradabilityLower costs; prestige Technical assistanceBetter-quality products; closer supplier-buyer relationships InstallationFewer problems Marketing Mix: Product

28 28 Pricing Strategies Pricing consideration Production costs Economic value to the customer Competitor price levels Desired competitive positioning Corporate objectives Price elasticity of demand Assessing value to the customer The effect of the Internet on pricing decisions

29 29 Pricing methods Cost plus pricing Going rate pricing, based on prevalent market price Perceived value pricing Promotional pricing Special events Cash rebates Low interest finance Psychological pricing Pricing Strategies

30 30 Differential AdvantageValue to Customer Lower priceLower cost of purchase Credit facilitiesLower costs; better cash flow Low-interest loansLower costs; better cash flow Higher pricePrice-quality match Marketing Mix: Price

31 31 Communication Strategies The communications process A basic communications model Awareness Interest Desire Action

32 32 Communication Strategies Communications decisions What message to convey What communications tools to use How to translate the message in copy Which media to use How much to spend on communications

33 33 Communication Strategies Communications tools Advertising Public relations Sales promotions Personal selling Direct marketing Sponsorship

34 34 Communication Strategies The use of the Internet for marketing communications Banner advertising and pay-per-click Viral marketing Pre-launch promotion Advertising audience measurement

35 35 Differential AdvantageValue to Customer Creative/ more advertisingSuperior brand personality Creative/ more sales promotion Direct added value Co-operative promotionsLower costs Well-trained salesforceSuperior problem-solving Marketing Mix: Promotion

36 36 Differential AdvantageValue to Customer Dual sellingSales assistance; higher sales Fast, accurate quotesLower costs; fewer problems Free demonstrationsLower risk of purchase Free or low cost trialLower risk of purchase Fast complaint handlingFewer problems; lower costs Marketing Mix: Promotion

37 37 Some Aspects of Marketing Innovation Viral Marketing Word of Mouth Marketing Digital Marketing Innovation

38 38 Viral Marketing is the key to success. marketing techniques that use social networks to produce increases in brand awareness or to achieve other marketing objectives (such as product sales) through self-replicating viral processes, analogous to the spread of computer viruses. It can be word-of-mouth delivered or enhanced by the network effects of the Internet. Viral promotions may take the form of video clips, advergames, text messages. Viral Marketing

39 39 Word of Mouth Marketing Different possibilities to create a big effect with small budget: Word of mouth marketing is a highly valued marketing tool for advertisers The receiver of word-of-mouth referrals tends to believe that the communicator is speaking honestly. The receiver relies on the information. A very successful word-of-mouth promotion creates BUZZ.

40 40 Four different rules to produce good word of mouth marketing; Be interesting Smart idea: is always a key successful business Find a megaphone: via Blogs, YouTube, Build trust: through emotional and excellent service & CRM Word of Mouth Marketing

41 41 Digital Marketing Innovations One way to maintain competitive edge Online communications Search gets local (i.e. Google Maps) Doing more with banners In-game advertising (esp. FMCG) Pay-per-text s with personality Corporate blogging (more personal and informal) Opening conversations among managers, staffs, teams, suppliers and customers. Owning PR message Promote CSR through Blogs

42 42 Axe Fantasy Examples of Marketing Innovation

43 43 Stop & Grow Examples of Marketing Innovation

44 44 Fiat Ducato Examples of Marketing Innovation

45 45 World Water Day

46 46 Bergmann Funeral Services

47 47 Distribution Strategies Channels of distribution Effects of the Internet on distribution strategies

48 48 Differential AdvantageValue to Customer LocationConvenience; lower costs Quick/ reliable deliveryLower cost; fewer problems Distributor supportMore effective selling/ marketing; close buyer-seller relationships Delivery guaranteesPeace of mind Computerized reorderingLess work; lower costs Marketing Mix: Distribution

49 49 Extended Marketing Mix- 8Ps People Job design/ job description Selection Training appraisal Processes Customer relationship management Physical evidence Partners

50 50 Zappos Online: Shoes, Bags, Accessories, etc Deeply engage with customers and employees Started in San Francisco (IT)  move to Las Vegas (Hospitality) Now current employees is 1,600 Pay employees to quit $1,000 (starting from $100  $500  and now $1,000) Company is bigger & bigger  keep quality 10% of new recruits quit 4- week: company culture/ value/ stress/ commitment/ customer service training One more week in Kentucky for warehouse and shipping If not the right fit, company pays $1,000 bonus to quit Extraordinary customer service

51 51 Zappos Grow successfully because of **Frontline** Lots responsibilities No scripts No time limit Authorized from company to make customers satisfy

52 52 Zappos Viral Marketing: customer service One customer bought 15 pairs of shoes for her mothers, 2 weeks return/refund policy. Customer service sent to remind. Found out that her mom was sick, and no time to send them back (UPS). Customer service sent UPS to pick up with flowers and card for her mom The customer post her appreciation on internet blog, within a week  viral Brilliant PR

53 53 Blue Ocean Strategy The reason of the appearance of the Blue Ocean Strategy Increasing numbers of industries and supply exceeds demand globalization accelerated commoditization of products and services increasing price wars shrinking profit margins brands are becoming more similar  select based on price

54 54 Red Ocean VS. Blue Ocean Red Ocean StrategyBlue Ocean Strategy Compete in existing market space. Create uncontested market space. Beat the competition.Make the competition irrelevant. Exploit existing demand.Create and capture new demand. Make the value-cost trade-off.Break the value-cost trade-off. Align the whole system of a strategic firm's activities with its choice of differentiation or low cost. Align the whole system of a firm's activities in pursuit of differentiation and low cost. VALUE INNOVATION

55 BOS Logic: Reconstruct market boundaries Industry Focuses on rivals within its industry Strategic Group Focuses on competitive position within strategic group Buyer Group Focuses on better serving the buyer group Scope of Product and Service Offerings Focuses on maximizing the value of product and service offerings within the bounds of its industry Functional-emotional Orientation of an Industry Focuses on improving price- performance with the functional- emotional orientation of this industry Time/Trends Focuses on adapting to external trends as they occur Looks across alternative industries Looks across strategic groups within its industry Redefines the buyer group of the industry Looks across to complementary product and service offerings that go beyond the bounds of its industry Rethinks the functional-emotional orientation of its industry Participation in shaping external trends over time Boundaries of Competition Head-to-Head Competition Creating New Market Space

56 56 Value innovation It is a new way of thinking about and executing strategy that results in the creation of a blue ocean and a break from the competition. The value-cost trade-off: either create greater value to the customers at higher cost or create reasonable value at a lower cost. BOS pursues differentiation and low cost simultaneously.

57 57 Value Innovation Four elements Eliminate Reduce Raise Create


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