Overview of Value Based Marketing (Ch.1)

1. Value Based Marketing Professor Dave Beaty, Docbeaty@2btassociates.com The Power of Brands in Value Based Markets (Chs. 13 & 14) Executing Value Based Marketing Strategies (Ch. 15) Value Based Marketing in B2B Industrial Markets (Ch. 5) Targeting Value Based Markets (Ch. 9) Value Based Marketing and Customer Value (Ch. 4) Formulating Value Based Marketing Plans (Chs.. 2, 3, 7 & 15) Overview of Value Based Marketing (Ch.1)

2. Sessions One and Two Overview of Value Based Marketing

3. Questions for the Luxor Case • Describe the external & internal environment of Luxor, and changes that occurred in the environments, from the start of the case - to the end of the case? • Describe the history of George’s career from the start of the case - to the end-of the case. • Who’s to blame for the problems that occurred? George? Luxor? • What did George do - or not do - that could have led to the problems in his career? • What did the leadership in Luxor do – or not do - that could have led to the problems that George encountered? • If you could go back in time, what should Luxor have done to prevent the problems encountered by George? • What should George have done? • As a member of the board, at the end-of the case, how should the Board Address the George dilemma?

4. DiscussionQuestions • Value, in Marketing, is the difference between a prospective customer's evaluation of the benefits and costs of one product when compared with others; • Now, define the terms “Selling” and “Marketing” • In terms of your definitions, how do you compare and contrast “Selling” and ”Marketing”? What do you think is the difference between ‘marketing’ and ‘selling’?

5. SELLING DEFINED The tricks and techniques to get people to exchange cash for your product (Source: Harvard Business Review, 2013)

6. VALUE BASED MARKETING DEFINED Creating value for “Customers” and “Stakeholders” while integrating all the functions of an organisation to focus on satisfying customers Stop relying on product sales – and start cultivating relationships with the right customers and stakeholders and put them at the centre of your business and organization (Harvard Business review, 2013)

7. POTENTIAL FOR CONFLICT • Why do you think there could be the potential for conflict between individuals working in Marketing and those working in Sales in an organisation • What complaints do sales people have about Marketing people? • What complaints do Marketing people have about Sales people? • How would you propose to manage these conflicts?

8. 10 Tips For Managing Conflict • Seek to understand before being understood • Focus on the issue—not the person • Look for a “big picture” (vision) to connect • Look for points of agreement • Keep emotions neutral • Know what you can and cannot give up • Suspend your assumptions (cultural, values or biases, etc.) but explore others • Deal face-to-face (Visual and Voice to Voice) • Take a deep breath and try to relax. • If it gets too hot---take time out • (Beaty and Robinson, 2003)

9. THE FOCUS OF VALUE BASED MARKETING?

10. Coalitional Leadership ForBuilding Positive Stakeholder Relationships Involves building a coalition of people who support the leader goals and can help influence others to implement the leader’s decisions and achieve the goals.

11. Mapping Matrices Stakeholder Buy-In

12. Exercising Power Successful Value Based managers use the power they develop in their relationships—along with persuasion– to influence people on whom they are dependent to behave in ways that make it possible for them managers to get their jobs done effectively and achieve their goals

13. Responses to the Use of Power Position Power Personal Power excessive use appropriate use Compliance Resistance Commitment

14. Sources of Stakeholder Leader Power • Dependency • Control Over Resources • Control Over Information

15. RELATIONSHIP WITH STAKEHOLDERS Constituents who have a ‘stake’, or claim, in some aspect of an organisation’s products, operations, markets, services, industry and outcomes - and who could potentially either help or hurt you from achieving your results or goals. Staff and management (Internal) Government NGO’s Municipalities Provinces Trade Unions Shareholders Vendors and suppliers Regulatory bodies and agencies Industry ombudsmen and associations How you structure your relationships with these constituents will be crucial for your long-term growth

16. Group Assignment: Stakeholder Mapping You are the Marketing Director for an NGO or Trade Union. Do a Stakeholder map! You want to establish a close relationship with each stakeholder group. Describe what you believe each stakeholder would value (and need from you) should they wish to form a relationship with you and your NGO/Trade Union. Describe how you would initiate and build a relationship to each different stakeholder group?

17. Marketing Strategy Target Market Selection Creating a Marketing Mix 8P’s A Value Based Marketing Strategy Comprises:

18. THE MARKETING MIX More recent marketing professionals have suggested expanding the marketing mix to include important variables: • People • Physical evidence • Processes • Partnerships • The ‘expanded marketing mix’8Ps Marketers combine and balance these four elements when determining how to satisfy customers’ stakeholders’ needs for a product: • Product • Price • Place (Distribution) • Promotion Sometimes called the 4Ps

19. EXPANDED MARKETING MIX: THE 8Ps The expanded marketing mix refers to the set of actions, or tactics, that a company uses to promote its brand or product in the market.

20. VALUE BASED MARKETING ENVIRONMENT

21. Discussion Question • Discuss how 1 of the 6 forces in the Value Based Marketing environment (that you don’t control) would impact on your marketing strategy for 1 of the following products: • Cigarettes • Alcohol • Diesel cars • Another example?