Business-to-Consumer Marketing Overview

Business-to-Consumer Marketing

• Focuses on strategies for companies selling products or services directly to consumers.
• Prof. Dr. Valerie Wulfhorst is the instructor for this course.
• The university offering the course is Fachhochschule Südwestfalen.

Agenda

• The course covers marketing definition and goals, marketing strategies, analysis of initial strategic situations, formulation and evaluation of strategies, the marketing mix (product, price, sales, communication), and customer relationship management.

Key Aspects of Marketing Strategy

• Includes an initial overview of the marketing strategy concept.
• Covers the "Classics" of strategic success factor research (PIMS Project, Experience Curve Model, Life Cycle Model).
• Outlines the marketing strategy development process.

Learning Objectives

• Students will gain familiarity with various company strategies and marketing objectives.
• They will understand the different strategy levels within companies and their interrelationships.
• The course will cover fundamental and critical PIMS Project findings, along with experience curve model implications and life cycle model analysis.
• Students will learn to define a company's basic orientation, including financial and non-financial objectives and allocation of resources across business units.
• They will grasp the process of business unit and marketing strategy development.

Overview of the Marketing Strategy Concept

• The different types of company strategies and marketing objectives will be explored.
• The various strategy levels within a company and how they connect will be detailed.

What is Strategy?

• Strategy is the plan, policies, and principles guiding an organization's actions toward achieving its goals.
• Common characteristics of strategy definitions include consistency, integration, cohesiveness, and a long-term view.
• It involves allocating resources and defining areas of competition.

Corporate Strategy

• Defines the company's overall direction and long-term goals, spanning industries and markets.
• It involves alignment of the overall company with core financial and non-financial objectives, defining the appropriate markets and business units.
• It focuses on distributing resources across business units and establishing a strategy for activities.
• Aims to develop and evaluate strategically relevant company resources and capabilities.

System of Company Objectives

• Company objectives flow from a business mission to define the long-term company goals.
• These flow through to functional objectives, such as marketing objectives, which are tied to the 4Ps (product, price, place, promotion).

Examples of Business Missions

• Steve Jobs's vision for Apple was to use technology to advance humanity.
• Harley Davidson's mission is about the journey.
• IKEA's mission is to create a better everyday life.
• Nike's vision is focused on "Just Do It."

Example: Business Mission/Values of Tesla

• Tesla's mission is to accelerate the advent of sustainable transport by introducing compelling mass-market electric cars.

Example: Business Units at Mercedes-Benz

• Mercedes-Benz AG, Daimler Truck AG, and Daimler Mobility AG are examples of business units for Mercedes-Benz.

Example: Mercedes-Benz "Cars" Strategy (SBU)

• The "Cars" strategy at Mercedes-Benz focuses on becoming the most desirable car brand internationally, while expanding the customer base across segments and focusing on profitable growth and sustainability.

Marketing Objectives of a Company

• Objectives are related to potential prerequisites, market success, and financial performance based on actual customer behavior.

Systematization of Marketing Objectives

• Objectives are categorized as related to potential, market success, and financial performance.

Goals of Marketing – The Value-Based View

• Marketing decisions influence non-financial performance which in turn impacts financial performance.

Marketing-Performance-Chain

• Marketing actions drive marketing assets, which create value-based performance.
• Key assets include customer satisfaction, customer retention, product quality, brand value, customer value, and customer image.
• These actions, in turn, drive various value-based performance measures like Return On Capital Employed (ROCE) and Customer Value Added (CVA).

Differentiation of Strategies According to Level in the Organization

• Presents a framework for differentiating strategies at different organizational levels.
• Illustrates the relation of business units, functional strategies, and corporate strategies.
• Demonstrates how procurement, production, and marketing strategies are linked.

Business Unit Strategy

• Defines measures needed for success in a given market segment.
• Includes alignment of company functions and the position of marketing within the broader corporate strategy.

Different Approaches to Classifying the Marketing Strategy

• Different approaches for viewing marketing strategy within the broader context of a company's activities.

The "Classics" of Success Factor Research

• Explores the PIMS Project, alongside experience curve and life-cycle model research.

PIMS Project: Structure

• Describes the PIMS database structure, data sources, methodology, and outputs.
• Focuses on how the project collects and analyzes data from 2,600 business units to determine ROI drivers.

What is PIMS?

• Describes the Profit Impact of Market Strategies (PIMS) project as a long-term study of business unit (SBU) performance across industries.
• Emphasizes insights gained into the factors influencing SBU success.
• Provides details on the project's history, including its origins with General Electric and subsequent management by the Strategic Planning Institute (SPI).

The PIMS Database

• Outlines the aspects of competitiveness, characteristics of the business environment, production or service characteristics, SBU strategy, and budgetary allocation.

PIMS – The ROI Is Affected by the Following Three Key Influencing Variables

• Explains how Relative Product Quality, Relative Market Share and Investment Intensity impact Return on Investment (ROI).
• Outlines the positive impact of a high market share and product quality.
• Reveals the negative influence of high investment on ROI.

Experience Curve Model: Explanation

• Discusses the basic concept of the experience curve model, showing how unit costs decrease with increased production volume due to fixed cost degression, learning effects, and economies of scale.
• Explains the potential for cost reductions (20-30%) with doubled production.

Empirically Determined Cost Reductions when Doubling Accumulated Volume for Various Product Types

• Presents empirical data demonstrating cost reduction percentages when the production volume is doubled for various products (electric stove, automobile, home air conditioning system, etc.).

Experience Curve - Critical Evaluation

• Notes that the model's application requires a product with consistent identity over time.
• Indicates challenges in strategic marketing due to the focus on one variable (volume).
• Outlines the dependence of the model on market characteristics.

Sales and Profit Curves According to the Life Cycle Model

• Describes the relationship among different sales and profit curves across the product life cycle stages, including introduction, growth, maturity, and saturation phases.

Life Cycle Model: Explanation

• Explains the model's phases (introduction, growth, maturity, saturation) and how varying marketing efforts are needed for each stage.

Characteristics of Market Life Cycle Phases

• Describes distinct criteria and characteristics for each phase of the market life cycle (introduction, growth, maturity, and saturation), including market growth, market potential, market share, stability of market share, and number of competitors.

Characteristics of Market Life Cycle Phases: (Further details)

• Details criteria like loyalty, entry barriers, technology, and the strategic implications at each stage.

Life Cycle Model: Critical Evaluation

• Time as the single variable for sales explanations simplifies reality.
• Emphasizes that empirical sales curves often don't perfectly match typical S-curves.
• Shows how managers strategically manipulate the curve through actions like market penetration or product compatibility.

Product Life Cycle Types

• Presents illustrations of various product life cycle curves (a, b, c, d).

Typical Strategic Behavior in the Various Life Cycle Phases

• Shows how strategic decisions (Market Objective, Target Market Range, Product Decisions, Pricing Decisions) change in response to the product's life cycle phase.

Typical Strategic Behavior in the Various Life Cycle Phases (Further details)

• Presents strategic communication, sales, and distribution decisions (e.g., selective vs. intensive) aligned with different phases of a product's life cycle.

The Marketing Strategy Development Process

• Outlines the process for developing a marketing strategy by sequentially analyzing the situation, formulating strategies, evaluating alternatives, selecting a strategy, implementing it, and monitoring its performance.