4Guest speaker: คุณมิ่งมงคล ทวีกุลวัฒน์ WeekDateTopics and instructorAssignment130 Oct. 2008Core marketing strategies: cost leaderships, differentiation, and focusDifferentiation and competitive advantageDifferentiation and Blue ocean conceptSession facilitator:ดร.สุทธาวรรณ และ ดร.โรจนศักดิ์• Read Chapter 1 and case study for discussion in the next session• ทำข้อตกลงร่วมกัน ในการกำหนดหัวข้อศึกษา และรายงาน Term paper26 Nov. 2008Innovation management introductionInnovation processCreativityCommercialization and innovationSession facilitator:ดร.สุทธาวรรณ• Read Chapters 3 and 4 and case studies for discussion in the next session• Case study presentation313 Nov. 2008Managing innovation within firmInnovation and operations management• Read Chapters 6 and 7 and case studies for discussion in the next session• Case studies presentation427 Nov. 2008Managing organizational knowledgeStrategic alliance and networks• Read Chapter 9 and case study for discussion in the next sessionCase studies presentationSubmit progress report of term paper to 2 instructors’ s54 Dec. 2008Managing R&D projects• Revise Chapters 1,3,4,6,7 and 9 for mid-term examination611 Dec. 2008Guest speaker: คุณมิ่งมงคล ทวีกุลวัฒน์Senior account director, Spa advertising Co., Ltd.718 Dec. 2008Guest speaker: คุณมิสสพล มิตรเวโรจน์Managing Director, Inthaco Co., Ltd.• Read Chapters 11, and 14 for discussion in the next session8ตรวจสอบข้อมูลจาบัณฑิตวิทยาลัยMid-term examination
5(กำหนดโดยผู้สอน) ดร.สุทธาวรรณ Topics and instructor Assignment WeekDateTopics and instructorAssignment98 Jan. 2009Product and brand strategyNew product developmentNew 8 P’s developmentPackaging and product developmentNew service innovationSession facilitator:ดร.โรจนศักดิ์• quiz 1• Read Chapter 10, 15 and 16 for discussion in the next session• Assignment 1: Term report proposal development1015 Jan. 2009Market research and new 8 P’s developmentManaging new 8 P’s development• quiz 2• Present and discuss Assignment 1 (submission)1122 Jan. 2009Presentation & Discussion the progress of term reportDiscussion the scope and details of selected 8 P’s innovation development as the term paper report• quiz 3• Assignment 2(กำหนดโดยผู้สอน)1229 Jan. 2008การประเมินผล ผลงานนวัตกรรมของนักศึกษาครั้งที่ 1 (10% ของคะแนนรวมทั้งภาคการศึกษา)135 Feb. 2008การประเมินผล ผลงานนวัตกรรมของนักศึกษาครั้งที่ 2 (10% ของคะแนนรวมทั้งภาคการศึกษา)1412 Feb. 2008การประเมินผล ผลงานนวัตกรรมของนักศึกษาครั้งที่ 3 (10% ของคะแนนรวมทั้งภาคการศึกษา)1519 Feb. 2008Session facilitator & Evaluation: ดร.โรจนศักดิ์ และดร.สุทธาวรรณการประเมินผล ผลงานนวัตกรรมของนักศึกษาครั้งที่ 4 (20% ของคะแนนรวมทั้งภาคการศึกษา)16ตรวจสอบข้อมูลจากบัณฑิตวิทยาลัยFinal examination***ไม่มีการสอบปลายภาค***
6Course Evaluation Case studies presentation 10% Quiz, assignments, and class attention 10%Term paper %Mid-term Examination 30%Final Examination %
7Main textTrott, Paul (2008) Innovation Management and New Product Development, 4th Edition, Pearson Education Limited, Essex, England.
8The World’s Most Innovative Companies AppleGoogleToyota MotorGeneral ElectricMicrosoftTata groupNintendoP&GSonyNokiaAmazonIBMResearch in MotionBMWSource: Jena McGregor, ‘Most innovative companies’, Business Week, 2008
9The World’s Most Innovative Companies Hewlett-PackardHondaWalt DisneyGeneral MotorsReliance IndustriesBoeingGoldman Sachs group3MWal-Mart storesTargetFacebookSource: Jena McGregor, ‘Most innovative companies’, Business Week, 2008
10TopicsCore marketing strategies: cost leaderships, differentiation, and focusDifferentiation and competitive advantageDifferentiation and Blue ocean concept
11Competitive 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.
12Competitive 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.
13Sources of Competitive Advantage Superior skillsSuperior resourcesCore competencesValue chain
14Core Marketing Strategies Competitive strategiesCost leadershipDifferentiationCost focus and Differentiation focus
15Cost leadership To become the low cost producer in the industry A cost leader must achieve parity or at least proximity in the bases of differentiationOften achieve by economies of scale
16Achieving Cost Leadership Economies of scaleExperienceCapacity utilizationLinkagesIntegrationTimingInter-relationshipsLocation
17DifferentiationTo be unique in the industry along some dimensions that are widely valued by buyersPremium price for product; but cannot ignore cost position (still should decrease cost)Differentiation: product/ distribution/ sales/ marketing/ service/ image, etc.
18Focus To be best in a segment or group of segments Two variants: cost focus & differentiation focus
19Achieving Differentiation Uniqueness driversProduct and/or Service differentiationQuality/ packaging/ branding/ servicePricing differentiationPrice war vs. Premium pricingPromotional differentiationPromotional tools/ messageDistribution differentiationShopping by phone through TV-based catalogues/ the InternetBrand differentiationUnique emotional proposition
20How to Differentiate A three- step process Defining the customer value modelBuilding the customer value hierarchy(i.e. a fine restaurant)Basic –food is edible and deliveredExpected – good china/ tableware/ tablecloth/ napkin/ flowers/ service/ well-prepared foodDesired – pleasant/ quiet/ interesting & great foodUnanticipated – complementary sorbetDeciding on the customer value package
21Sustaining Competitive Advantage Unique and valued productsClear, tight definition of market targetsEnhanced customer linkagesEstablished brand and company creditability
22STP Marketing Segmentation Target market Positioning size, growth, attractiveness, company objectives and resourcesPositioningProduct position/ positioning mapCompetitive differentiation
23Competitive Positioning Strategy Advantage-creating resources;-Contribute to providing value for customersAre unique to the firmAre hard for competitors to acquire or imitate
24Competing through the New Marketing Mix 4PsProductPricePromotionPlace4CsCustomer needs/ wantsCost to satisfyCommunicationConvenience to buy
25The Market Offer Key product/service concepts Product/service choice criteria: rational/ emotional/ lifestyle/ assurance brandProduct/service differentiationDiffusion of innovationManaging the product over its life cycleThe impact of the Internet on market offering
26Marketing Mix: Product Differential AdvantageValue to CustomerProduct performanceLower cost; higher revenue; safety; pleasure; statusDurabilityLonger life; lower costsReliabilityLower maintenance and production cost; higher revenue; fewer problems
28Pricing Strategies Pricing consideration Production costsEconomic value to the customerCompetitor price levelsDesired competitive positioningCorporate objectivesPrice elasticity of demandAssessing value to the customerThe effect of the Internet on pricing decisions
29Pricing Strategies Pricing methods Promotional pricing Cost plus pricingGoing rate pricing, based on prevalent market pricePerceived value pricingPromotional pricingSpecial eventsCash rebatesLow interest financePsychological pricing
30Marketing Mix: Price Differential Advantage Value to Customer Lower priceLower cost of purchaseCredit facilitiesLower costs; better cash flowLow-interest loansHigher pricePrice-quality match
31Communication Strategies The communications processA basic communications modelAwarenessInterestDesireAction
32Communication Strategies Communications decisionsWhat message to conveyWhat communications tools to useHow to translate the message in copyWhich media to useHow much to spend on communications
34Communication Strategies The use of the Internet for marketing communicationsBanner advertising and pay-per-clickViral marketingPre-launch promotionAdvertising audience measurement
35Marketing Mix: Promotion Differential AdvantageValue to CustomerCreative/ more advertisingSuperior brand personalityCreative/ more sales promotionDirect added valueCo-operative promotionsLower costsWell-trained salesforceSuperior problem-solving
36Marketing Mix: Promotion Differential AdvantageValue to CustomerDual sellingSales assistance; higher salesFast, accurate quotesLower costs; fewer problemsFree demonstrationsLower risk of purchaseFree or low cost trialFast complaint handlingFewer problems; lower costs
37Some Aspects of Marketing Innovation Viral MarketingWord of Mouth MarketingDigital Marketing Innovation
38Viral Marketing 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.
39Word of Mouth Marketing Different possibilities to create a big effect with small budget:Word of mouth marketing is a highly valued marketing tool for advertisersThe 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.
40Word of Mouth Marketing Four different rules to produce good word of mouth marketing;Be interestingSmart idea: is always a key successful businessFind a megaphone: via Blogs, YouTube,Build trust: through emotional and excellent service & CRM
41Digital Marketing Innovations One way to maintain competitive edgeOnline communicationsSearch gets local (i.e. Google Maps)Doing more with bannersIn-game advertising (esp. FMCG)Pay-per-texts with personalityCorporate blogging (more personal and informal)Opening conversations among managers, staffs, teams, suppliers and customers.Owning PR messagePromote CSR through Blogs
50Zappos Online: Shoes, Bags, Accessories, etc Deeply engage with customers and employeesStarted in San Francisco (IT) move to Las Vegas (Hospitality)Now current employees is 1,600Pay employees to quit $1,000 (starting from $100 $500 and now $1,000)Company is bigger & bigger keep quality10% of new recruits quit4- week: company culture/ value/ stress/ commitment/ customer service trainingOne more week in Kentucky for warehouse and shippingIf not the right fit, company pays $1,000 bonus to quitExtraordinary customer service
51Zappos Grow successfully because of **Frontline** Lots responsibilitiesNo scriptsNo time limitAuthorized from company to make customers satisfy
52Zappos 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 momThe customer post her appreciation on internet blog, within a week viralBrilliant PR
53Blue Ocean StrategyThe reason of the appearance of the Blue Ocean StrategyIncreasing numbers of industries and supply exceeds demandglobalizationaccelerated commoditization of products and servicesincreasing price warsshrinking profit marginsbrands are becoming more similar select based on price
54Red Ocean VS. Blue Ocean Red Ocean Strategy Blue 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
55BOS Logic: Reconstruct market boundaries Boundaries ofCompetitionBOS Logic: Reconstruct market boundariesHead-to-HeadCompetitionCreatingNew Market SpaceIndustryFocuses on rivals within its industryStrategic GroupFocuses on competitive position within strategic groupBuyer GroupFocuses on better serving the buyer groupScope of Product and Service OfferingsFocuses on maximizing the value of product and service offerings within the bounds of its industryFunctional-emotional Orientation of an IndustryFocuses on improving price-performance with the functional-emotional orientation of this industryTime/TrendsFocuses on adapting to external trends as they occurLooks across alternative industriesLooks across strategic groups within its industryRedefines the buyer group of the industryLooks across to complementary product and service offerings that go beyond the bounds of its industryRethinks the functional-emotional orientation of its industryParticipation in shaping external trends over timeThere are a clear pattern for creating blue oceans, with six basics approaches to remarking market boundaries: The six paths frameworkIn the first path companies in the red ocean define their industry similarly and focus on being the best within it. But to create new market space companies must look across alternative industries because a company competes not only with the other firms in its own industry, but also with companies in those other industries that produce alternative products and services.The second path: The next boundary is the strategic group. A strategic group is companies within an industry that pursue a similar strategy.The key in creating new market space is to understand what factors determine buyers´ decision to switch from one strategic group to another.The third path: In most industries, competitors converge on the definition of the target buyer. In the reality, though, there is a chain of buyer who directly or indirectly involved in the buying decision: the purchaser, the user, for example.But by looking across buyer groups, companies can gain new insights into how to redesign their value curves to focus on a previously overlooked set of buyers.The fourth path: In the red ocean: few products and services are used in a vacuum. In most cases, other products and services affect their value. But companies can create new market space by focusing on the complements that detract from the value of their product or service.The fifth path: Competition in an industry tends to converge around two bases of appeal:-Some industries compete principally on price and function, their appeal is rational. Other industries compete largely on feelings, their appeal is emotional.Companies can find new market spaces when they are willing to challenge the functional-emotional orientation of their industry.The sixth path: All industries are subject to external trends that affect their business over time. Firms tend to pace their own thinking to keep up with the development of the trends they are tracking.By finding insights trends that are observable today, firms can unlock innovation that creates new market spaces.
56Value innovationIt 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.