Strategic Marketing PDF 2024-2025 IHEC

Strategic Marketing 10 – Agile Marketing 2024-2025 Olivier Schunck [email protected] 21GEO22A – Strategic Marketing - Module 10 1  Course Outline Marketing’s A brief history of Marketing...

Strategic Marketing 10 – Agile Marketing 2024-2025 Olivier Schunck [email protected] 21GEO22A – Strategic Marketing - Module 10 1  Course Outline Marketing’s A brief history of Marketing Digital & Marketing strategy in the 1 6 Journey and where it stands today Social Digital Era Strategic Basics of Marketing Strategy Emerging AI, Gen AI & emerging tech- 2 7 Marketing explained, step-by-step technology led Marketing Reinvention Customer Customers’ behavior & needs Brand & Brand identity, trust and 3 8 Centricity and distinctive experiences Purpose purpose-driven marketing Research & Customer intelligence driven Responsible Marketing in times of crisis: 4 9 Insights by data/AI & human insights Marketing Sustainable and Ethical Market & Competitive advantage to Agile Resilient & agile marketing 5 10 Competition stand out and innovate Marketing operating models Note: To align to the presentations of guest speakers, the order of modules 5 to 9 has been slightly changed 21GEO22A – Strategic Marketing - Module 10 2  Today’s focus Marketing’s A brief history of Marketing Digital & Marketing strategy in the 1 6 Journey and where it stands today Social Digital Era Strategic Basics of Marketing Strategy Emerging AI, Gen AI & emerging tech- 2 7 Marketing explained, step-by-step technology led Marketing Reinvention Customer Customers’ behavior & needs Brand & Brand identity, trust and 3 8 Centricity and distinctive experiences Purpose purpose-driven marketing Research & Customer intelligence driven Responsible Marketing in times of crisis: 4 9 Insights by data/AI & human insights Marketing Sustainable and Ethical Market & Competitive advantage to Agile Resilient & agile marketing 5 10 Competition stand out and innovate Marketing operating models Note: To align to the presentations of guest speakers, the order of modules 5 to 9 has been slightly changed 21GEO22A – Strategic Marketing - Module 10 3 ASK – Imagine you lead a GoGreen’s marketing team… GoGreen is a producer of outdoor clothing, footwear and gear. Products are sold through own stores, retailers and online Unexpectedly, a competitor launches a new outdoor shoe line. How would your marketing respond in the short-term? 21GEO22A – Strategic Marketing - Module 10 4 ASK – Imagine you lead a GoGreen’s marketing team… Form a rapid response squad, cross functional Conduct a rapid competitor & market analysis Identify potential financial impact Assess pricing scenarios and current budget constraints Amplify GoGreen's brand (sustainability, quality…) Target promotions at ‘most exposed’ customers Work with social media influencers to engage community Accelerate own new products in the pipeline Strengthen SEO efforts and digital marketing Partner with outdoor celebrity/event to promote offers … and more 21GEO22A – Strategic Marketing - Module 10 5 Agile Marketing Operating Models 21GEO22A – Strategic Marketing - Module 10  The future of marketing is constantly evolving AI-HYPER PERSONALIZATION GEN AI CONTENT SYNTHETIC DATA VOICE COMMERCE 5G / BLOCKCHAIN AR/VR MARKETING IMMERSIVE MARKETING ROBOTICS & DRONES etc. In 2013 …ALREADY THERE In 2023 Source: Based on a Microsoft/MediaPlanet research, 2013 21GEO22A – Strategic Marketing - Module 10 …and its is faster, more unpredictable & more complex FASTER UNPREDICTABLE COMPLEX In 2023 ChiefMartech identified 11,038 marketing technology solutions for firms to work with… To adapt to these fast changes companies, need to develop marketing adaptability and agility Source: BGC analysis for the two first and https://chiefmartec.com/2023 21GEO22A – Strategic Marketing - Module 10 Marketing Operating Model The disruption unleashed by the digital and customer experience revolutions is here to stay and even accelerate. The future success of marketing rests upon its ability to continuously anticipate and deliver against the fast-changing expectations of the connected customer. Marketers must find innovative ways to create more touchpoints, develop new talent, new capabilities, build strong teams, and deploy cutting-edge technologies…all while improving ROI. Today's marketing requires velocity: speed with direction. The future of marketing to this connected customer requires - a well-designed new operating model, - supported by advanced capabilities in Data, Analytics, Automation, Metrics & Technologies - in a clear organisational structure working hand-in-hand - with all partners combined with the creative work - the “math and magic” of marketing. 21GEO22A – Strategic Marketing - Module 10 9 Marketing Operating Model Illustrations of Marketing Operating Models 21GEO22A – Strategic Marketing - Module 10 10 Marketing Operating Model What is an Operating Model? An operating model is both an abstract and visual representation of how an organization delivers value to its customers or beneficiaries as well as how an organization runs itself. An operating model describes the way an organization does business today – a TOM (=Targeted Operating Model) is for tomorrow. It shows the various components, showing how it works. It can help stakeholders to understand the whole. 21GEO22A – Strategic Marketing - Module 10 11 Marketing Operating Model Why do companies need an Operating Model? The right marketing operating model serves as a bridge between strategy and execution. It ensures that internal processes are aligned to meet growing customer expectations. A marketing operating model is even more important for global companies as their organisational set-up is extremely complex, creating new & unknown costs. A rigorous model acknowledges the interaction between each of the components and ensures it is agile enough to adapt to changes in the business or environment. 21GEO22A – Strategic Marketing - Module 10 12 Marketing Operating Model What are the key components? The elements of an operating model differ based on the framework used but generally they include: Core / differentiating Processes & capabilities workflows Organization Technology (incl. infrastructure) Governance and People and culture decision-making Performance management 21GEO22A – Strategic Marketing - Module 10 13 Marketing Operating Model What are the key components? The elements of an operating model differ based on the framework used but generally they include: Core / differentiating Processes & capabilities workflows Organization Technology (incl. infrastructure) Governance and People and culture decision-making Let’s zoom into Performancethese two key management elements 21GEO22A – Strategic Marketing - Module 10 14 Operating Model Focus #1 Organization 21GEO22A – Strategic Marketing - Module 10 Marketing Organization Successful marketing requires the right strategy and an outstanding team to bring it all together. However, introducing an effective marketing organization structure can take the business to the next level. With a solid marketing structure in place, the staff knows exactly what is expected of them. With everyone clear on their jobs and their roles in the company’s success, everything operates more smoothly, and it enables the team to work as one. Structure is a critical component of defining the organization. In the next slides, five common organization structures for marketing are covered. 21GEO22A – Strategic Marketing - Module 10 16 Marketing Organization – Functional Structure One of the most common ways to structure a marketing team is by function. Functional structures organize employees into groups based on their job positions, skillsets and duties they perform. A specialised team or function group is an assortment of employees with similar job aspects. Specialised functional groups can promote consistent work and speed up work performance since they don't involve employees outside of their function. They work independently with functional leads reporting directly to the CMO. An example of this structure would be to assign teams based by focus such as digital marketing, marketing research, product marketing, content / creative marketing, and any other type of marketing function the business requires. 21GEO22A – Strategic Marketing - Module 10 17 ASK – Key benefits & challenges of a functional structure? 21GEO22A – Strategic Marketing - Module 10 18 ANSWER – Key benefits & challenges of a functional struct.? Deeper expertise Silo mentality More cost efficiencies No end-to-end view Skills development focus Slow decision-making Standardized processes Over-specialization Clear roles & accountability Conflicting objectives 21GEO22A – Strategic Marketing - Module 10 19 Marketing Organization – Product-based Structure A product-based structure is mostly ideal for a company selling a variety of products or services. Product management or brand management based. This structure assigns employees into groups or divisions that focus on each individual product line. Each division can have employees from every specialized function, whereas a functional structure has employees divided into separate groups that focus on one specialized function. A product-based structure can give each division independence from one another, which allows employees to focus on their own division-related tasks since they do not have to pull in people from other departments. 21GEO22A – Strategic Marketing - Module 10 20 Marketing Organization – Geographical Structure Large organizations that operate in multiple countries typically do best with the geographical marketing organization structure. Using this structure can be helpful because it divides employees into teams based on geographical regions. Breaking down marketing by territories is beneficial for focusing on regional audiences and engaging with local markets. In this way, marketing teams can create campaigns that resonate with their specific region instead of using language that is too vague in order to fit a broader audience. Giving them the ability to connect to the audience on a deeper level designing local marketing strategies based on their target audience. 21GEO22A – Strategic Marketing - Module 10 21 Marketing Organization – Market-/Customer-based Some businesses focus on certain industries, markets or types of consumers while creating a marketing organization structure. The marketing teams can be structured based on industry, markets, business size, or another type of customer segment (demographic, value based,…). This is helpful for firms that interact with a variety of customer groups. By dividing teams based on customer segments, the messaging and platforms can be more uniquely tailored to the interests and concerns of each customer group. For each, a different team focuses on understanding needs and creating tailored marketing strategies. The structure usually works well for large customer bases and complex sales process. 21GEO22A – Strategic Marketing - Module 10 22 Marketing Organization – Customer stage The customer stage structure focuses on the customer pipeline. The marketing teams are assigned different customer stages such as building brand awareness, customer acquisition, customer conversion, and finally customer retention. Each team develops specific language and marketing strategies to reach their customer demographics. While the team are assigned different stages of the customer’s journey, however, the various stages still have to work together to ensure seamless messaging and branding. 21GEO22A – Strategic Marketing - Module 10 23 Marketing Organization – Defining the structure There are other structures such as network structure, matrix structure and all kinds of hybrid ones. There is no one-size fits all marketing organization structure.Not all structures are suitable for all companies. When designing the organization structure, companies will have to consider aspects such as: Own characteristics (company size, industry…- Alignment with business goals Customer centricity Specialization vs. Integration Flexibility and adaptability 21GEO22A – Strategic Marketing - Module 10 24  Marketing Organization – Beyond structure… - Galbraith’s Star Model - The Star Model helps companies holistically create the organization necessary to sustain a company's business models and value propositions over time. It was developed by Jay Galbraith an organizational theorist, consultant and professor at IMD. It goes beyond just defining the organization’s structure focusing on five elements that need to be aligned and connected to successfully shape the decisions and behaviors of an organization: strategy, people, reward systems, structure and processes Finally, the current culture and leadership styles are key. While not explicitly called out by the model, they are underlying to many of its components such as strategy, reward systems and people. Referencing the "Star Model" from jay Galbraith, 2002 21GEO22A – Strategic Marketing - Module 10 25 Operating Model Focus #2 Technology 21GEO22A – Strategic Marketing - Module 10  Technology – At the core of agile marketing Marketing technologies (aka martech) have become essential to today marketing operating models Senior marketers anticipate a sharp increase in their martech spend over the next 5 years, but this anticipated surge in martech spend belies ongoing problems with martech capabilities. For example, 39% of CMO state that they still have not used such generative AI tools for their marketing activities. Source: CMO Survey—conducted biannually since 2008 by Duke University’s Fuqua School of Business marketing professor Christine Moorman 21GEO22A – Strategic Marketing - Module 10  Technology – At the core of agile marketing - Critical technology capabilities - ▪ The critical technology capabilities brings together key components, like cloud, data, AI and security, to drive enable companies to adapt swiftly to change ▪ Given the increased importance of digital techno- logies for customer experience and productivity improvement, harnessing these capabilities fully is of primary importance for marketing. Source: Capabilities for the Digital Core, Accenture 2024 Source: CMO Survey—conducted biannually since 2008 by Duke University’s Fuqua School of Business marketing professor Christine Moorman 21GEO22A – Strategic Marketing - Module 10 Technology – At the core of agile marketing ▪ Remember that reliable, holistic and integrated customer and market data are at the core of the - Sephora omni-channel case study (Module 6) - use of technology ▪ If in an industry where customers can be anonymous (e.g. retail, consumer goods…) the best technology platform cannot be used optimally. ▪ To access/grow insights firms can develop initiatives to gain customers’ identity/information: o Digital solutions: loyalty programs, interactive mobile apps/website features, instore Wi-Fi… o Digital marketing: Social media campaign/contest, email marketing/sign-up, social listening/reviews… o In-person actions: surveys, Instore data capture (e.g. at check out), events with sign-up… …and as 60%-73%* of all data within a o Partnerships: payment providers, 3rd party data company goes unused for analytics, work providers for anonymized data to be extrapolated with other functions (e.g. customer service…) * Forrester research 21GEO22A – Strategic Marketing - Module 10  Technology – At the core of agile marketing …and highlights the complexity in terms of investment decisions and digital skills gaps that CMO face. The tremendous growth over the past decade in terms of providers of marketing technologies, from ~150 to ~11.000, underlines this evolution… Source: www.chiefmartec.com/2023 21GEO22A – Strategic Marketing - Module 10 Agile Marketing 21GEO22A – Strategic Marketing - Module 10  Video 21GEO22A – Strategic Marketing - Module 10 Towards more agility In an era full of VUCAH - volatility, uncertainty, complexity, ambiguity and hyper connection - companies can no longer make long term plans without making numerous adjustments along the way. In fact most long-term plans are already outdated by the time the milestones are reached. Companies need to match the speed of customers shifts and outpace the competition at the same time. Agility has been the new name. 21GEO22A – Strategic Marketing - Module 10  Towards more agility Source: House of Marketing 21GEO22A – Strategic Marketing - Module 10  Agile - A new way of working emerged… For many, Agile was officially born in 2001 in the software world with the “Agile Manifesto” and its 12 principles. The fast pace of technological change has forced development companies to build software in a faster and more efficient way – to be flexible and able to respond quickly to evolving customer needs and expectations. Agile working methodologies have then evolved out of the software development industry. Whilst it’s true that the manifesto brought the word into common parlance, many of the ideas and concepts of modern agility date back well into the mid-20th century. When we talk about lean-agile today, we’re talking about something far broader than the manifesto sought to address and far more varied than just software projects. In fact, Lean-Agile thinking has roots in concepts that date back well into the 20th century, but maybe the story starts even earlier. Whilst for many the word Agile is closely associated with Software and Technology, many of the concepts are built upon or have evolved from ideas to improve industrial processes and manufacturing. We can trace some recognisable Lean concepts back to post-second-world-war Japan, with their concepts of Just In Time delivery and the beginnings of the Toyota Way and Toyota Production System approach to manufacturing. Source: House of Marketing 21GEO22A – Strategic Marketing - Module 10  About Agile “Agility is the ability to adapt and respond to change... Agile organizations view change as an opportunity, not a threat ” — Jim Highsmith, co-author of the Agile Manifesto Source: XXXXXXXXXXXXXXXXXXXXX 21GEO22A – Strategic Marketing - Module 10 36  Agile - A brief history… Source: Gareth Holebrook 21GEO22A – Strategic Marketing - Module 10  Agile - A brief history… Source: www.radixweb.com 21GEO22A – Strategic Marketing - Module 10 Agile – What is it about… in a few words. Agile is not simply a framework or a methodology – it's a mindset. When organisations truly embrace agile working, they have different values, different goals, different ways of organising and coordinating work, a different role for management, and different ways of communicating. Always focusing on the customer and continuous improvement. Agile working is a combination of both incremental and iterative development. An incremental process is one where products and services are designed, built and delivered in pieces. An iterative process is one that improves a product or service through successive refinement. First a 'Minimum Viable Product' (MVP) is developed, to test with customers. The MVP does not yet have all the desired functionality, but through successive feedback rounds with customers the product or service is improved - each iteration adding more detail and functionality. 21GEO22A – Strategic Marketing - Module 10 Agile – What is it about… in a few words. Agile working empowers small multi-disciplinary teams to be responsible for entire processes and value chains, end-to-end. This breaks down silos and encourages collaboration. The hallmark of an agile organisation is a workforce that adapts quickly to change, and works efficiently with a minimum number of handovers to achieve a fast time to volume. Self steering teams & Senior Leadership provide direction & vision but not how to get there. An agile organization is alive – continuously improving itself and adapting to change. 21GEO22A – Strategic Marketing - Module 10 Agile Marketing The role of the marketeer has evolved drastically over the last years, marketing teams today need to work in a way that is more incremental, measurable, and compatible with our rapidly changing digital world. It requires a new way of working & new skills such as growth marketing. Agile marketing is the application of agile values and principles to manage the way a marketing team gets work done. At its core, an agile approach values flexibility, iteration, and speed. It enables you to quickly learn what does and does not work, based on data & analytics, so you can incrementally improve the results of your marketing efforts, deploying tests quickly, evaluating the results, and rapidly iterating. This is why many organizations are turning to agile marketing. It allows teams to be nimble, offer more personalized messages, stay competitive, and deliver better results for the business. 21GEO22A – Strategic Marketing - Module 10 Agile Marketing Agile marketing requires a certain kind of mindset that some traditional companies lack, more into a waterfall, command & control traditional management style, characterised by long lead times and uncertain results. By default, start-up companies often have agile mentalities due to their scarce resources. They need to make things happen quickly before budgets run out. Complicated structure and bureaucracy inherent in big organisations are the worst enemies of agile marketing. It’s not for all teams not for all companies, it is not a one size fits all. Taking some take-aways from Agile and from other methodologies and building what best work is often the best solution. 21GEO22A – Strategic Marketing - Module 10 Agile Marketing – How does it work? Agility should be seen as bottom-up and top-down information management, a way of empowering people and breaking down silos. Small teams with cross-functional talents, called squads, highly empowered, have decision-making authority to execute highly focused tasks. These squads embrace innovation, perform rapid experimentation MVP (Minimum Viable Product), focusing on test and learn. 21GEO22A – Strategic Marketing - Module 10 Agile Marketing – How does it work? ► Organizing squads around specific customer objectives ensures that everyone on the team is connected to the customer. Ensuring always aligned with the purpose and on brand. ► Giving squads clear KPIs, such as a volume of new customers or specific revenue goals, ensures that everything is measured and evaluated. ► Every two/three weeks, deliveries occur in a ‘sprint’. It is therefore also possible to check whether what is being done corresponds to current requirements. ► The creation of such a 'flow' has a positive impact on the creation of value for customers. Collaboration is important to do this effectively and improvements are discussed in a retrospective ► This change allows the focus to be on project delivery. The mindset changes. Delivery in short sprints means that the ball can be caught quickly, results can be achieved, shared and celebrated, and learning can take place every time. ► Continuous improvement is an essential part of agility, with an important role for "psychological safety” as dare to fail is one of the key success factors. 21GEO22A – Strategic Marketing - Module 10 Agile Marketing – How does it work? 21GEO22A – Strategic Marketing - Module 10  About Agile “Agility is principally about mindset, not practices.” — Jim Highsmith, co-author of the Agile Manifesto Source: XXXXXXXXXXXXXXXXXXXXX 21GEO22 – Strategic Marketing - Module 10 46 Agile Marketing – Mindsets for Transformation 21GEO22A – Strategic Marketing - Module 10 Agile Marketing – Agile and consistency go together Not everything should be Agile 21GEO22A – Strategic Marketing - Module 10  Agile Marketing – Agile and consistency go together ILLUSTRATION: Sales activation (agile/short-term) and Brand building (consistent/long-term) While marketing effort to activate sales need to be responsive to market evolution and be able to scale fast, the impact is generally limited in the short-term Brand building on the contrary, conveys a stable and consistent message over long periods, thereby creating more long-term value Success is by combining both… Source: Marketing Week based on research done by Les Binet and Peter Field of ”The Long and Short of It” co-sponsored by Institute of Practitioners in Advertising. 2013 21GEO22A – Strategic Marketing - Module 10  Agile Marketing – Agile and consistency go together ILLUSTRATION: Sales activation (agile/short-term) and Brand building (stable/long-term) Peter Field and Les Binet have that short- & long- term marketing work best together They advocate the ’60:40 rule’ as a guide, roughly 60% of advertising spend is on brand building and 40% is on activation (performance marketing) It’s a guideline. It may depend on the product stage and media landscape Source: Marketing Week based on research done by Les Binet and Peter Field of ”The Long and Short of It” co-sponsored by Institute of Practitioners in Advertising. 2013 21GEO22A – Strategic Marketing - Module 10 Agile Operating Model for Marketing 21GEO22A – Strategic Marketing - Module 10  Agile Marketing Operating Models When it comes to marketing agility, successful companies move beyond the traditional organizational trade-offs companies have always had to make? They leverage the advances in data and technology to enable them to address both sides of five critical trade-offs. Source: Accenture, Tech-powered operating models, 2023 21GEO22A – Strategic Marketing - Module 10 ASK – How can Marketing bridge the ‘Core vs. New’ trade-off? Think for example at the ZYLA case (new energy drink launched by Spadel) Core / differentiating Processes & capabilities workflows Organization Technology (incl. infrastructure) Governance and People and culture decision-making Performance management OPERATING MODEL AGILE MINDSET 21GEO22A – Strategic Marketing - Module 10 53 Agile Marketing: #1 Core and new Marketing needs to find a way to balance both, continued growth of core products/services while developing new ones at the same time. Key marketing challenges for new product development: Market Fit: Risk of strong competitive reaction/pressures Customer Risk: Wrong needs, different target segments Reputational Damage : Negative feedback or launch failures harming brand equity and core products Cannibalization risk: Core market share negatively impacted Financial Risk: High development cost, poor ROI Regulatory Risk: Compliance failure with law/IP Operational Risk: Operations disrupting core activities …. 21GEO22A – Strategic Marketing - Module 10 Agile Marketing: #1 Core and new Potential solutions – illustrative, non exhaustive Agile marketing organization structure such as squads or incubator entity structure for the ‘New’ with distinct goals, KPIs and governance New brand (stand-alone) rather than an extension of current core brand(s) to protect the existing portfolio’s brand equity, if new initiatives fail Agile processes: rapid experimentation MVP approach focus on iterative test & learn or conduct limited pilots that are then scaled fast Ongoing performance tracking to identify shortfall rapidly and re-orient Strategic partnerships or investments (e.g. venture capital) to share risks and/or acquire specific expertise. Potential pitfalls to mitigate:- illustrative Higher overall marketing costs Talent motivation (cool vs. old) Lack of trust (e.g., if new brand) Governance duplication Missed synergies etc. 21GEO22A – Strategic Marketing - Module 10 Agile Marketing: #2 Scale and agility Potential solution – illustrative Potential solution – illustrative Organize customer facing product teams around growth and shared services teams for efficiency and scale Using digital content creation and personalization to adapt real-time Examples for marketing: Lead to changes and scale them rapidly management, creative/content services, digital marketing, lead via digital platforms throughout all management (B2B)… the organization 21GEO22A – Strategic Marketing - Module 10 Agile Marketing: #3 Global and local Potential solution – Case study (see also module 2A) Walmart’s South Korean market entry in the early 2000s failed as it was focused on replica- ting its global (US-driven) business model. The inability to localize operations & compete with strong domestic players, could have been addressed for example by: o Creating deeper insights into local shopping habits and cultural expectations o Partnering with local players. e.g. Tesco’s a joint venture partnership with Samsung - leading Korean firm - was very successful o Better market research on competitors o Tailored marketing mix better to the local consumers (store CX, product offer…) o Focus on agility: pilot first, then scale 21GEO22A – Strategic Marketing - Module 10 Agile Marketing: #3 Global and local Potential solution – Case study McDonald’s balances its global brand and ‘standard menu’ with localization to adapt to specific needs, tastes and pressures from competitor fast-food chains 21GEO22A – Strategic Marketing - Module 10  Video 21GEO22A – Strategic Marketing - Module 10 Agile Marketing: #4 Fixed and flexible Potential solution – Case study Sportswear giant adidas expects half of its sales to come through direct to consumer (DTC) channels by 2025. The company is redesigning its operating model to support this shift to DTC and create flexibility to respond to changing consumer behaviors. adidas has invested in e-commerce presence, store network and membership program to deliver seamless, omnichannel customer experiences tailored to consumers’ preferences. In addition to digitizing stores, adidas is expanding digitization to wholesale partners, investing in an ERP system and sustainability to bolster its supply chain and upskilling the workforce to support the new operating model. Source: adidas, “adidas Presents Growth Strategy ‘Own the Game’ Until 2025,” March 10, 2021 21GEO22A – Strategic Marketing - Module 10 Agile Marketing: #5 Inside and outside Potential solution – Illustrative Main advantages for external collaboration Access to Expertise: Gain specialized skills & knowledge that may not be available in-house. Cost Efficiency: Avoid the fixed costs of maintaining full-time teams for specialized tasks. Fresh Perspectives: Introduce innovative ideas and strategies from external viewpoints. Scalability: Scale marketing efforts up or Over more than 40 years down quickly based on business needs. of longstanding Advanced Technologies: Leverage cutting- marketing partnership, edge tools without investing directly in them. this advertising agency has built a incredible Risk Mitigation: Share risks with external Brand Equity for Nike agencies e.g. legal or market uncertainties. etc. 21GEO22A – Strategic Marketing - Module 10 The power of partnership 21GEO22A – Strategic Marketing - Module 10 Power of partnerships In today’s complex environment, internal and external partnerships are required to ensure marketing’s success: Internal Partnerships External Partnerships ► CEO and entire C-Suite ► Agency partnerships ► Information technology (IT) ► Innovation partnerships ► Legal/Compliance/Risk ► Technology partnerships ► Sustainability/ESG/DE&I ► Passion partnerships – Sponsoring ► Internal communications ► Public private partnerships ► Human resources (HR) ► Industry and trade partnerships ► Sales / Commercial ► Local community partnerships ► Product innovation/R&D ► Part-time, free-lance workers ► Customer Service ►... ► Public relations/Media relations ► … 21GEO22A – Strategic Marketing - Module 10 Internal partnerships Internally, Marketing interacts with many functions & stakeholders CEO CFO/Finance CIO/IT/Digital Legal/Risk Sustainability/ESG Internal Comms HR/Talent … CMO and Marketing teams can benefit from close collaboration 21GEO22A – Strategic Marketing - Module 10 Internal partnerships ❑ CEO and C-Suite (upper management) The first thing that is important is that marketing is totally in line with and supporting the CEO’s vision for the company. Marketing knowledge and the value it brings shall be well understood at top management in an organization. Without support from top management, marketing will not have enough ‘power’ to be successful (and budget). A common misunderstanding is that top managers think that marketing is just about communication and/or advertising, while it is much broader. ❑ CFO and Finance Credible & sufficiently substantiated estimates, budget negotiation & attribution with metrics, measurement & reporting in place. Not seen as a cost centre. ❑ CIO and IT / Digital Key enabler and driver, certainly today with the growing confluence between marketing abilities and technology capabilities. 21GEO22A – Strategic Marketing - Module 10 Internal partnerships ❑ Legal/Compliance/Risk With significant consumer protections and regulations cropping up in an unprecedented fashion, marketeers need to understand the regulatory landscape as well as the boundaries and opportunities there are. A close partnership with their policy & regulatory colleagues to get guidance and keeping a good balance between what is fait to the consumers and also pragmatic to the marketeer to operate within. ❑ Sustainability/ESG Sustainable marketing is a great way to promote environmentally and socially responsible products, practices, and brand values, as long as you get it right. Better be on top of all new regulations and standards and partner with the sustainability team to ensure proper actions. ❑ Internal communications Support from within the whole organization to fulfil the promises and to facilitate the implementation. All employees need to understand the marketing strategy and shall be brand ambassadors. 21GEO22A – Strategic Marketing - Module 10 Internal partnerships ❑ HR/Talent Given the complexity of marketing today and the range of capabilities needed, marketers need a new talent strategy built around three elements: insource mission-critical roles, hire “whole- brained” talent & foster an ROI-focused management style. A strategy to attract, retain, train, reward and upskill talent with best-in-class expertise. As customer journeys become more complex, CMOs must recruit and develop new skill sets to support these journeys, while maintaining a culture of creativity and collaboration in new hybrid work environments. This is challenging at the best of times, with increased talent competition, and in the face of new trends (e.g. quite quitting…), the talent challenge is amplified. 21GEO22A – Strategic Marketing - Module 10 Internal partnerships ❑ Other functions Depending on the company’s organization structure some of the below areas are or not within the marketing department, it is anyway crucial to have close partnerships & be deeply connected. As every touchpoint with the company is an opportunity to reinforce the brand promise and experience. ▪ Product Innovation/R&D ▪ Customer service ▪ Sales / Commercial ▪ Public relations ▪ Media relations 21GEO22A – Strategic Marketing - Module 10 External partnerships ❑ Agency partnerships (1/3) As much as data and technology will be critical for effective and impactful communication, creativity will be a huge differentiator. It connect with the hearts and souls of consumers. Creative agencies, media agencies, digital agencies, content agencies, research agencies, PR agencies,... They need to understand completely what the vision is, the strategy, the priorities and the existing constraints so this is not to be seen as a mere procurement exercise. Being in sync with the right agency, with the right attitude and creative team and treat them as equal, as real partners (not just ad-hoc suppliers). For them to understand the business and the soul of the brand is an experiential and evolutionary process. A strong agency ecosystem is essential to ensure a significant impact on brand investments. This means choosing the most relevant partners (complementarity vs. competition), and also an operating model that focuses on efficiency and effectiveness. The best ecosystem does not depend on the number in it, but on the extent to which these partners are relevant to the changing needs of the business and are complementary rather than in conflict for a larger share of budget. 21GEO22A – Strategic Marketing - Module 10 External partnerships ❑ Agency partnerships (2/3) Globalization and digital transformation have seen the context for the client-agency relationship change markedly over the years. This increasingly complex marketing and communications landscape often goes hand in hand with an increase in the number of agency partners that help brands create and implement their projects. Many advertisers feel that the impact of their marketing budgets and efforts is diminishing due to the increase in the number of agency partners - confusion or duplication of roles & responsibilities, lack of complementarity, excessive fragmentation of budget,… There has been a creation of multiple agencies ecosystems. Of which Silk@Proximus is an example for the Belgian market. Ecosystem with a creative agency - Famous grey, a digital agency - Prophets, a media Agency - Maxus & a point of sales agency - Altavia ACT. When working with a true agency ecosystem, the objectives is to optimise performance and efficiency : one holistic framework for all, avoiding redundancy, working in parallel to go faster 21GEO22A – Strategic Marketing - Module 10  External partnerships ❑ Agency partnerships (3/3) The future will redefine the consumer landscape and the approaches taken by brands and agencies, according to the Institute of Practitioners in Advertising (IPA) Each of the identified models has strengths and weaknesses, ways of working, remuneration and measurement and varying Five relationship models: The Titan – a brand chooses one single external body to provide all marketing. degrees of growth potential. The Engineer – one body handles strategy while multiple agencies execute that strategy. The relevance of each model The Coalition – strategy and execution is undertaken by several agencies. varying depending on the client The Hybrid – combination of in-house client services and external agencies for strategy & execution. and the campaign. The In-house – the vast majority of a brand’s marketing is handled in-house. Source: IPA report reveals future agency-brand relationship models, November 2020 21GEO22A – Strategic Marketing - Module 10 External partnerships ❑ Innovation partnerships Not only with large companies offering new tech, Video as well as with start-ups and scaling-up, hungry for growth and very agile. Growing together. ❑ Technology partnerships Given the rate of change and that most marketers are not deeply knowledgeable about technology, having external technology partners is very common across all marketing. ❑ Media partnerships Media has been traditionally a core area of marketing. It has been disrupted and is going to get further disrupted. Therefore, they are looking for medium to long term partnerships and new business models. 21GEO22A – Strategic Marketing - Module 10 Deep dive - Media partnerships From Media to channels to ecosystems ►The evolution of the media landscape shall also be taken into consideration, which is better called "evolution of the channel landscape". The touchpoints used in marketing are through communication channels, actually only 40% of them are media as packaging, word-of-mouth... are also channels. ►Marketers work on a planning of contact points which no longer only including the classic media. Many channels, more impact to be measured & sometimes complex to measure. We could say we go from media to channels to ecosystems which leads to more complexity. ►Indeed, the touchpoint approach is increasingly becoming a real ecosystem. All the elements interact with each other. ►This interaction creates an additional challenge, namely the determination of the total attribution. How can we determine which part of the ecosystem had which impact on which part of the sales funnel. Econometric studies are needed to do this. Today, even the traditional media themselves fail to establish this impact. They continue to report the results of each individual medium. ►In choosing the channel approach, always keeping in mind on which stage of the funnel you are working on : Awareness, engagement or conversion? 21GEO22A – Strategic Marketing - Module 10 Deep dive - The Belgian Media Ecosystem (1/4) 21GEO22A – Strategic Marketing - Module 10 Deep dive - The Belgian Media Ecosystem (2/4) 21GEO22A – Strategic Marketing - Module 10 Deep dive - The Belgian Media Ecosystem (3/4) 21GEO22A – Strategic Marketing - Module 10 Deep dive - The Belgian Media Ecosystem (4/4) 21GEO22A – Strategic Marketing - Module 10 Deep dive - New media players emerge: Deliveroo case As sales took a dive post-pandemic, Deliveroo, the food delivery platform turned to ads to recover losses. Deliveroo has launched its own advertising platform, Deliveroo Media and E-commerce. Since July 2022, brands are able to advertise to Deliveroo customers with relevant offers across its app, on Deliveroo’s website and as part of social media, email and push notification campaigns. Currently Deliveroo partners are able to make use of its advertising services, with sponsored positioning for restaurant or grocery partners for example. This new advertising platform means consumer FMCG brands are able to advertise to millions of highly engaged Deliveroo customers. Turning to ads played a big part of Deliveroo diversification strategy and has been working very well so far. Deliveroo’s ad platform has helped the food delivery company grow revenue by 5% in the first half of its financial year 2023. 21GEO22A – Strategic Marketing - Module 10 Deep dive - New media players emerge: Deliveroo case 21GEO22A – Strategic Marketing - Module 10 External partnerships ❑ Passion Partnerships – Sponsoring Partnership with sports, music, dining,… Sponsorship can play a vital role in both gaining consumer attention as well as enabling experiential marketing. 21GEO22A – Strategic Marketing - Module 10 External partnerships ❑ Passion Partnerships – Sponsoring Partnership with sports, music, dining,… Sponsorship can play a vital role in both gaining consumer attention as well as enabling experiential marketing. Sponsorship consists of public support for events, projects, teams or individuals, in 2 forms : Sponsorship: support for sporting, cultural, scientific or social activities, aimed at increasing the visibility of the company's name/brand and benefiting (commercial profitability) from the advertising and media effects of the supported activity. Patronage: discreet actions in support of cultural, scientific, social or humanitarian activities without seeking immediate advertising profits, and aiming essentially to improve the company's image with the general public. Even if there is no magic formula for quantifying the effects, measuring them is not difficult in itself. One can organise an exit survey at the end of the festival or sports event or afterwards. Over frequent measurements the impact of sponsorship can be identified. 21GEO22A – Strategic Marketing - Module 10 External partnerships ❑ Passion Partnerships – Sponsoring (continued) Several consideration come into play when consider sponsorship: ▪ Clear identity / positioning of rightsholder and brand ▪ Brand fit = the perfect match ▪ Smart goals ▪ Relevant activation ▪ Differentiating ▪ Emotional-link ▪ Story telling / content ▪ Alignment Why + What + How ▪ Right budget ▪ Trust in collaboration ▪ Measuring impact ▪ Strong options : Co-creation, Good cause & ESG 21GEO22A – Strategic Marketing - Module 10 External partnerships ❑ Public-Private Partnerships (PPP) Not only charitable and not-for-profit initiatives also for profit. Certainly in areas such as smart cities, healthcare, community education,… ❑ Industry and trade partnerships These partnerships can be very beneficial for the company as well as the entire industry, tackling policy making, standard setting, educating stakeholders,…Working together on standards for interoperability avoiding inconsistency and incompatibility helping shape the policies and define the parameters for the industry. ❑ Local community partnerships Local communities are becoming an increasingly important focus for customers - buy local. Establishing partnerships with local communities to genuinely make a difference ❑ Part-time, free-lance workers partnerships With the strong trends towards freelance work/gig economy, marketing organization models need to be rethought in this context (processes, confidentiality,…) 21GEO22A – Strategic Marketing - Module 10 Deep Dive: Co-marketing Co-branding Co-creation 21GEO22A – Strategic Marketing - Module 10 Deep Dive: Co-Branding ► Co-branding is a strategic marketing and advertising partnership between two brands wherein the success of one brand brings success to its partner brand, too. ► It has to be a win-win for all players in the game. ► Co-branding is when two or more brands combine their brand equity—their logo, name, and reputation in the market—into a single product or service. It often involves a joint product development, where both put their names on a new product/service being produced. ► Co-branding is when two distinct brands team up to create a unique product or service that works across their combined audiences, which they could not offer individually. Both audiences need to find value. 21GEO22A – Strategic Marketing - Module 10 Deep Dive: Co-Branding ► Co-branding is a way for brands to share costs or combine skills or images considered complementary. ► Of course, the success of co-branding relies upon the choice of the brand to partner with and the reputation of all brands involved. They all need to have something to gain and should provide some value to one other in order for the partnership to be a win-win. ► There are a ton of great examples of co-branding partnerships out there, but also a lot of failures because of internal or external forces ► Both brands should have a shared set of values and Example of appeal to the same style of customers, but they should co-branding that ended not be exactly the same to offer real added value due to reputation ► Each brand involved must be transparent and clear on its damage objectives from the start, working toward a similar goal. 21GEO22A – Strategic Marketing - Module 10  Video 21GEO22A – Strategic Marketing - Module 10 Deep Dive: Co-Branding Advantages for the brands : ► benefit from each others reputation ► engage with current customers in a fresh and innovative way ► grow their community ► increase sales ► win new customers ► boost awareness, extend their visibility to a market they may not have had access ► strengthen their brand equity/credibility 21GEO22A – Strategic Marketing - Module 10 Deep Dive: Co-Marketing ► Co-marketing is an approach to marketing that involves two or more complementary businesses working together to promote each other’s products or services. By forming a mutually beneficial strategic partnership with a non-competitive business, both parties can reach new audiences and market more efficiently. ► Co-marketing occurs when two like-minded brands align their marketing efforts to promote each other’s product or service. While a hybrid product is not created, a co-marketing undertaking allows brands to leverage their relationships with other brands. ► Co-marketing campaigns aim to deliver greater results in terms of visibility, reach, and sales advances that could not have been accomplished without the support of another brand. ► Co-marketing takes many different forms and can be negotiated between B2B and B2C brands, products and services businesses, and new start-ups and established brands—as long as you can connect the dots between you and your partner to establish equal value on both ends. 21GEO22A – Strategic Marketing - Module 10 Deep Dive: Co-Marketing ►Co-marketing aligns the marketing efforts of two brands but does not result in the creation of a new product or service. Instead, they collaborate to promote a shared offer around each other’s brand image and existing products or services. ►Co-marketing can energize your brand and can be done in many ways: Content marketing partnerships, Promotional campaigns, Advertising, Events, Sponsoring, Loyalty program, Product placement, Social media contests, free samples,… ►It is valuable for all brands that want to widen their audience, increase brand awareness, and offer a new type of content to their customers. Tips, brands need to have similar audiences set mutual goals the purpose of the project must be similar for both brands involved there needs to be benefit parity not partner with brands that could bring down credibility partner with brands that have the expertise they do not have 21GEO22A – Strategic Marketing - Module 10 Deep Dive: Co-Marketing The benefits of Co-marketing ► Reaching new audiences of potential customers by working with businesses that share the same buyer persona but belong to a different product category ► Cutting costs by pooling together resources, such as marketing budgets, distribution channels, networks, talent, etc. ► Selling more products by getting exposure to another business’s customer base ► Generating press coverage because brand collabs are often newsworthy, especially if an established name is involved ► Expanding network with valuable connections in parts of industry with no access to before ► Building valuable long-term relationships that over time can lead to more unconditional exchanges of value, knowledge, networks, and support 21GEO22A – Strategic Marketing - Module 10 Deep Dive: Co-Marketing Types of Co-marketing ► Affiliate Marketing: this is where brands ► Content Marketing Partnerships: this strategy entails collaborate with influencers, bloggers, and other providing or generating content for the other brand in the creatives with a similar audience, to gain access partnership. This helps to control brand messaging and to new customers. leverage reach. ► Distribution Partnership: this involves co-marketing ► Loyalty Marketing Programs/contests: an incentive efforts where a brand bundles a partner's product with marketing program may encourage specific customer its own, or vice versa. Combination. behaviour with offers for partner brands. In this case, ► Product Placement: in this co-marketing strategy, a brands are working together to reward customer loyalty. product is placed in a section of the other brand’s This can happen when people purchase frequently, make content/platforms. Common in movies & TV show. high-value transactions, or even promote the brand themselves. ► Licensing Agreements: these agreements give other companies permission to sell and ► Referral Agreements: in this co-marketing method, one distribute a product. company agrees to refer business to the other, in return for a reward. This is particularly useful for small businesses ► Event Sponsorships: companies may sponsor events that offer limited services, it can then fill a gap in the from other businesses to put their name at the forefront of marketing materials in order to increase services offered by referring customers to another brand exposure and drive engagement. company they trust. ►.... 21GEO22A – Strategic Marketing - Module 10 Deep Dive: Co-Marketing 21GEO22A – Strategic Marketing - Module 10 Deep Dive: Co-Creation ►Co-creation is the practice of involving a brand’s audience in the creation of a new product or service, name, slogan or advertising campaign. ►Co-creation is a process involving customers, stakeholders, experts, suppliers and/or employees. The goal of collaborative co-creation is to promote the culture of sharing ideas, instead of keeping it to yourself. Mass-customization and open source are the two relevant terms that are closely related and work alongside. For example, when deciding on a new product, the consumers can vote for a new texture, colour, shape, textile, or flavour… ►Co-creation allows to: - Have a deep understanding of the target audience, their behaviours and expectations - Be customer-centric, putting the customer’s experience at the heart of every decision - Build a powerful community ►Engaging with a brand’s community opens up a wide range of opportunities to innovate, experiment, test, collect data, validate ideas, and disrupt the market. It is essential for brands to improve their agility, flexibility, and culture in order to appeal to consumers and build brand loyalty. It will help brands and businesses transform for the better. ►Nowadays, thanks to social media, co-creation & influencer marketing have been booming. Brands are partnering with influencers that are loved by a large number of people, to create entirely new verticals and product lines. Influencers have become social media celebrities, giving little choice to brands but to co- create with them. Micro- influencers is the new trend offering more credibility and authenticity. 21GEO22A – Strategic Marketing - Module 10 Deep Dive: Co-Creation 21GEO22A – Strategic Marketing - Module 10 Case: Partnering with the IOC 21GEO22A – Strategic Marketing - Module 10 Case: Partnering with the IOC 21GEO22A – Strategic Marketing - Module 10  Video Video 21GEO22A – Strategic Marketing - Module 10 98  Co-marketing, Co-branding and Co-creation are collaborative partnerships that are a source of innovation, growth, and collaboration. Collective thinking and action are key for all brands. 21GEO22A – Strategic Marketing - Module 10  Information about the exam (January 2025) 21GEO22A – Strategic Marketing - Module 10 100 Exam January 2025 Written examen (in English) Two parts − Multiple choices questionnaire section − Open question section Material covered: − Lectures & slides + potentially other support materials − Elements covered during class, incl. examples, videos & case discussions Note: No specific dates (e.g. “First ad agency was created in…”) No survey data (e.g. “34% of CMO said…”) 21GEO22A – Strategic Marketing - Module 10 101 Exam January 2025 – Multiple choice sample questions ILLUSTRATIVE ILLUSTRATIVE …on acronyms & definitions …on process, model & framework What does CLV stand for? The buyer decision process has five stages. A. Customer Lifetime Value Which of the following is NOT one of these? B. Current Local Value A. need recognition C. Consumer Loss Velocity B. information search D. Corporate Leverage Volume C. variety-seeking buying behavior E. None of the above D. purchase decision E. post-purchase evaluation …on key concepts The four-part framework to diversify how/where A value proposition explains the you look to identify unmet needs in a digital age, unique _______ a product offers to customers. talks about ‘microscope’ when a company: A. features A. Focuses broadly on users outside its core B. benefits B. Focuses broadly on mainstream users C. costs C. Focuses closely on users outside its core D. risks D. Focuses closely on mainstream users E. needs E. None of the above 21GEO22A – Strategic Marketing - Module 10 102 Exam January 2025 – Multiple choice sample questions ILLUSTRATIVE …on short case studies (inspired by the ones covered during class) The tech company NeoTech works with the coffee chain BrewBeans to design a smart coffee machine. This machine syncs with NeoTech’s app to provide personalized coffee suggestions based on customer preferences and usage data collected from the app. The machine features both brands’ logos and is marketed under a joint advertising campaign. What type of partnership collaboration does this scenario best represent? A. Sponsorship B. Co-marketing C. Outsourcing Agreement D. Co-Branding E. Technology licensing 21GEO22A – Strategic Marketing - Module 10 103  Thank You! Do you have questions or would like to share your feedback? [email protected] 21GEO22A – Strategic Marketing - Module 10 Links to videos in this presentation Agile Marketing explained https://www.youtube.com/watch?v=JMS6Xee7SmA McDonald’s Global vs. Local Menu https://www.youtube.com/watch?v=AGO-c-8QXh0 Shell – Lego cobranding backclash https://www.youtube.com/watch?v=qhbliUq0_r4 IOC and Visa partnership https://www.youtube.com/watch?v=pCVBkuMO5W4 21GEO22A – Strategic Marketing - Module 10 105