1. Linking Strategies 5G3190 DMCM David Edmundson-Bird

2. Linking Strategies So what’s the problem? You have to produce a digital marketing strategy poster You have to create an effective market segmentation exercise You have to evaluate digital market segment attractiveness You have to produce a positioning approach You have to discuss the role of the digital marketing mix in your digital marketing programme

3. Linking Strategies So what do you need to learn? How we re-link business strategy and marketing strategy What traditional marketing strategy is all about What the different digital marketing scenarios are How one might consider a pure-play digital marketing strategy How one might consider a bricks-and-clicks digital marketing strategy

4. Re-linking SBU Strategy & Marketing Strategy

5. The Link between SBU Strategy & Marketing Strategy SBU Strategy gives you the context in which to make marketing strategy decisions SBU Strategy GUIDANCEBENCHMARKSDIRECTION Marketing Strategy

6. Ensuring Linkage between SBU & Marketing Strategies For marketing strategy to work, it must be aligned with SBU Strategies in 4 ways GOALALIGNMENT “FIT” BETWEENTHE STRATEGIES IMPLEMENTATIONALIGNMENT RESOURCEALIGNMENT ACTIVITYALIGNMENT

7. Goal Alignment Strategic, financial & customer goals of SBU and marketing must be aligned What stops this? Business strategy changes quickly SMT and Marketing don’t communicate No one checks to see they are aligned

8. Resource Alignment There have to be resources provided for marketing by the SBU What stops this? SBU level constraints that underestimate marketing resources required for far-reaching marketing objectives Inability to justify increase in marketing expenditure

9. Activity Alignment For marketing to work, other parts of the SBU must experience a consistent change in activities (recruitment, customer service, fulfilment) What stops this? No coordination between functions and activities Activities are not explicitly mapped onto objectives

10. Implementation Alignment Poor implementation can undermine a good marketing strategy even if the other three are fine What stops implementation alignment? Poor timing Poor resources to implement

11. What is Traditional Marketing Strategy all about?

12. Key Concepts Remember what the 3 key components of a marketing strategy are? Marketing Strategy SEGMENTING TARGETING POSITIONING

13. Marketing Strategy Decisions Marketing strategy = segmentation + targeting + positioning choices Taken to market through 4 elements of the Marketing Mix Product Promotion Position& TargetMarket Distribution Price

14. Example: Positioning by Segment THE CARTHAT’S SAFEFOR THEFAMILY THE CARFORPEOPLEWHOWANTADVENTURE

15. How do we Prioritize Segments? SEGMENTATIONPRIORITISATION Buyer Readiness Attitude of Buyer Current Trend/Mkt Leaders Willingness to Pay

16. What are the Different Digital Marketing Scenarios?

17. Marketing Strategy Formulation 2 Obvious distinctions Pure-play and Bricks-and-Clicks Similar path for marketing strategy development But some subtle, important differences

18. Marketing Strategy Formulation DIGITALSBUSTRATEGY SBUSTRATEGY - digital- real world- overall BRICKSANDCLICKS PURE PLAY MARKETINGSTRATEGY FORDIGITALBUSINESS INTEGRATEDMARKETINGSTRATEGY Choices: - Segmentation- Target market- Positioning MARKETINGSTRATEGY FOR DIGITALBUSINESS MARKETING STRATEGY FORREAL WORLDBUSINESS Choices: - Same or different segmentation- Same or different target market- Same or different positioning

19. Pure Play Digital Marketing Strategy

20. Bases for Segmentation in Pure Plays Segmentation divides the market into useful sub-units of similar consumers based on: Demographics Geography Psychographics Personality characteristics/attitudes (values, emotional responses and ideological beliefs) affecting lifestyle and purchasing behaviour Cognitive & behavioural attributes

21. Effective Segmentation for Pure Plays If segmentation is going to be effective, it has to be: Meaningful Needs to explain why customers act in a certain way Actionable Can implement against the segment Financially Viable Is a profitable segment

22. Selecting Target Markets for Pure Plays Targeting is about seeking the most attractive (sub) units: Segment size/growth Size now and potential size in 1, 2, 5 years Structural attractiveness Does the segment offer profitable entry to exploit? Organisational resources Does/could the organisation have the capability to meet the segment requirements?

23. Positioning for Pure Plays Positioning describes benefits to the target in their language – maybe just about one aspect of the product Feature Positioning “Our product does this” Benefit Positioning “Ours is the cleanest product in the world” Usage Occasion Positioning “We deliver products for birthdays” User Category Positioning “Our product is good for families with young children” Competitive Product Positioning “Our product works faster than product x from company y” Product-class Positioning “Our products are precision-built products”

24. Positioning Plan for Pure Plays How a positioning strategy becomes a positioning plan Compare newactual positionwithideal position Select andimplement themost promisingchoice Develop alternatestrategiesfor achievingideal productposition Determine idealproduct position Identify actualproduct positioning Generatealternatives foreitherrepositioning toreach ideal stateor the introductionof a new product Use a perceptualmap to identifyvariables thatmatter tobuyerswhen they makepurchases Identify the mostfavorable placementon the perceptualmap that theproduct shouldoccupy Choose plan that is most consistent with the organization's objectives, resources and strengths Evaluates outcomeof positioningefforts

25. Perceptual Maps: Cars PRICE High j i h g f LEVEL OFDESIGN Low High d e a c b Low

26. Perceptual Maps: Preference and Opportunity Segments PRICE High j i h g UNMET NEED f UNMET NEED LEVEL OFDESIGN Low High UNMET NEED UNMET NEED d e a c b UNMET NEED Low

27. Bricks-and-Clicks Digital Marketing Strategy

28. Segmentation Scenarios CHANGE IN SEGMENTATION CHARACTERISTICSdue to emerged Digital marketplace Marketexpansion & reclassification Marketexpansion YES CHANGE IN SIZEof marketsegments Market getsreclassified No change NO YES NO

29. Segmentation for Bricks-and-Clicks Segmenting digital customers will have one of 4 results No change The customers are already digital customers Market expansion Digital opportunity expands organisation’s reach beyond real-world constraints Market gets reclassified Digital customers needs differ from real-world customers Reclassified expansion Characteristics and size of digital customer base differ from real-world customer base

30. Targeting for Bricks-and-Clicks Strategies for targeting can be broken into 4 types Carpet Bombing Digital capability is a product/service enhancement that will appeal to all target customers Beachhead Targeting Digital capability is a product/service enhancement that will only appeal to a subset of target customers Bleed-over Targeting Digital capability appeals to a new customer segment as well as the existing real-world customer base New Opportunity Targeting Digital capability only appeals to a new customer segment

31. Bricks-and-Clicks Targeting Scenarios CUSTOMER HOMOGENEITY SAME CUSTOMERS DIFFERENT CUSTOMERS ENTIRE CURRENTSEGMENT Carpet bombing New opportunity Serve sameexisting real-worldsegment digitally Serve new segmentdigitally FOCUS OF EFFORT Beachhead targeting Bleed-over targeting Serve new segmentand some of existingreal-world segmentdigitally Serve portion ofexisting real-worldsegment digitally PORTION OF CURRENTSEGMENT

32. Bricks-and-Clicks Positioning Scenario Guidelines CUSTOMER HOMOGENEITY SAME CUSTOMERS DIFFERENT CUSTOMERS ENTIRE CURRENTSEGMENT Carpet bombing New opportunity Borrow heavily fromexisting real-worldpositioning Tout advantages of Digitale.g. convenience andaccessibility Completely reposition Position differentiationsthat cater to the newsegment FOCUS OF EFFORT Beachhead targeting Bleed-over targeting Borrow from existingreal-world positioning Focus more on needs ofthe smaller group Stress value-add of theDigital Proposition Use dual positioning Leverage existingpositioning Position added benefits,such as augmentedofferings via digitalproposition e.g. increased productcustomizability PORTION OF CURRENTSEGMENT

33. Summary We’ve looked at how we re-link business strategy and marketing strategy We’ve considered what traditional marketing strategy is all about We’ve explored the different digital marketing scenarios We’ve looked at how one might consider a pure-play digital marketing strategy We’ve looked at how one might consider a bricks-and-clicks digital marketing strategy