1 Entrepreneur Training: Marketing Module
2 Agenda Introduction and credentials Goal Marketing framework HomeworkPositioning Product Price Place Promotion Homework
3 Introductions
4 Credentials Who is LGE Execs? Who am I?Growing five year old group of 120 former senior executives, from multiple functions, multiple verticals, in US and Europe Available to help run companies, functions, initiatives We are the Anti-Consultants We have Supply, Demand, Finance, and Talent practices Who am I? First 11 years in Consumer Products – foundation in marketing VP Marketing for BellSouth’s SMB division Director/VP Marketing and then VP/GM for Dell’s $4B SMB division Repositioned startup, sold to Cisco Started marketing practice, merged with LGE in January, 2007
5 The fundamentals still apply!
6 A Tried and True FoundationTarget Competitive set Point(s) of difference Purpose Create sustainable advantages for the firm vis-à-vis competitive alternatives Assess and optimize existing portfolio Target needs and market based reqts Strategic roadmap to support positioning Create a product portfolio that solves the target’s relevant problems in a superior way Proactive and strategic pricing model Understand and leverage elasticity Coverage of addressable market Provide price structure that optimizes revenue and/or profit Assess target’s satisfaction with existing structure Evaluate direct, indirect, online, wholesale, etc Deliver on channel reqts for success Deliver a channel that maximizes target customer buying opportunities Virtuous cycle of awareness, trial, repeat, referral Create demand generation model to control ROI Drive sales model: Deal flow, deal size, deal velocity Provide toolset that drives demand with ROI certainty and control Promotion Place Price Product Positioning LGE Execs P5 FrameworkTM
7 Example Case Studies Positioning Product Price Place PromotionNetSolve Cisco SEM Dell Servers IT Security CMS Mobile Security Dell SMB Hosted Apps IT Architecture Solution Enterprise SW vs. SaaS vs. Appliance Voice Apps
8 Positioning: Create sustainable competitive advantage Target Who are they? Where are they? What problems do they have How do they make decisions? Competitive Set How does the target solve its problem today? What roles do “do it yourself” and “do nothing” play and why? What is the SWOT for each major competitor, including DIY and DN? What problems are left uncovered? Point of Difference With consideration to the Target and Competitive learnings… What are the unique selling propositions that provide the firm with Compelling, relevant, and sustainable advantages?
9 What You Need to Do Deliverables for Positioning:Understand current and future strengths, weaknesses, opportunities and threats, compare versus leading competitors Research market through primary and secondary means Interview key execs, employees, customers, and partners Develop a strategic positioning segmentation or framework that leverages client’s best attributes against competition to maximize appeal to the target.
10 Product: Create superior solutions to target’s problems Current Portfolio How does the current product or service deliver on the benefits that the target requires? Are there too many offerings? Too few? Are there unmet user needs that must be addressed? If so, is a new offering or a relaunch of an existing offering better? Target Requirements What are the real needs of the end user (and/or partner, as appropriate)? What understanding does the firm have today and how was this information obtained? What level of domain expertise exists and how current is the thinking? Roadmap How can a realistic roadmap position the firm as the leader in the category? Can the roadmap be achieved organically or are strategic alliances or M&A required? Are current and future products captured in a strategic roadmap that can be presented to prospects? Customers buy roadmaps, not products.
11 What You Need to Do Deliverables for Product:Understand competitive business models and offerings, and analyze strengths and weaknesses. Document and prioritize current and future end user and/or partner needs. Assess viability of current offerings to address these specific needs. Develop strategic roadmap based on current and changing needs.
12 Price: Optimize Revenue and/or profitBusiness goals Revenue at all costs? Profit maximization with topline tradeoffs? Balance? Document specific financial parameters to ensure that pricing is proactive and strategic and not merely reactive and tactical. Current Pricing Is the current pricing optimal, given the business goals? How can you leverage elasticity impact results with some degree of control? Pricing Logic Is the pricing logical across the portfolio? Does it incent the desired buyer behavior? Does the pricing schema have appeal (and therefore coverage) of the target market? Alternative Schema Are there competitive pricing models that are appealing? Are there models from outside the industry that have potential? Evaluate within context of above criteria.
13 What You Need to Do Deliverables for Price:Analyze pricing, revenue, margin, and unit velocity data to develop pricing model and elasticity curves. Validate thinking with sales and customers (as appropriate). Create and make recommendations on various pricing scenarios based on these issues. Recommend and transition tactics, as needed. Understand competitive business models and offerings
14 Place: Maximize opportunities for target to buy Existing Approach Analyze existing channel and distribution structure. Assess predominant channel structure of the category and competitors Assess the target’s level of satisfaction. Alternate Models What is the best model? Shrink wrap, license, subscription, wholesale, retail, OEM, or distributor? Understand tradeoffs of existing channel strategy and evaluate these potential alternate approaches. Prioritize and execute. Execution Understand channel requirements Develop and execute plan for recruiting, contracting, training, incenting, maintaining and growing.
15 What You Need to Do Deliverables for Place:Research and analyze the current category distribution structure to create a channel map. Identify potential gaps and opportunities. Provide informed recommendation on distribution strategies, based on the tradeoffs of status quo, costs, feasibility, and risks to changing approach. Alternately, develop a full potential plan for existing channel strategy. Create and execute an end-to-end plan for managing the channel for success.
16 Promotion: Generate Cycle of Awareness, Trial, Repeat, Referral Virtuous Cycle What are the most effective ways to generate target market awareness? Convert that awareness to first purchases? To incent repeat purchases? To activate word of mouth referrals? Within budget and time requirements? ROI What is the financial foundation of the the demand generation model? What are the ROI sensitivities? Where are first places to cut budget and first places to add? Sales Execution Create and analyze the sales model to understand and manage the dynamic tradeoffs between: Velocity Deal flow Deal size Sales coverage Compensation
17 What You Need to Do Deliverables for Promotion:Assess, quantify and prioritize assortment of programs for awareness, trial, repeat and referral. Create various spending plans based on budget parameters that include estimated revenues and profitability results. Create the demand generation model that can be used to manage tactics and expenses to project and manage ROI. Create the sales model that can be used to manage the sales and/or channel team, its expenses, and the sales funnel, pipeline and forecast.
18 Homework
19 Homework Assignment One: PositioningDevelop your positioning Complete at least two positioning statements, one each for your primary and secondary targets Target Competitive Set Point of Difference For [target] with [problem], [your company] is the best choice among [competitive set] because of [point of difference.]
20 Homework Assignment Two: ProductIdentify potential gaps in the marketplace Map target problems with competitive solutions What are the main problems that your primary and secondary targets are trying to solve? With respect to your primary and secondary targets, identify the top competitors used (including DIY and DN) Perform a SWOT (Strengths, Weaknesses, Opportunities, Threats) assessment for each competitor Rate these competitive solutions against the targets’ problems Identify potential opportunities Where are the competitive solutions inadequate? How does your firm provide a better solution? In what ways is this solution distinctive and superior? How does this match the Point of Difference identified in Positioning?
21 backups
22 LGE Execs Supply LifecycleTMBusiness Focus Business plan Offering roadmap Supply chain Service roadmap Specific Areas Differentiation strategy Architecture, schedule, process Sourcing, manufacturing, distribution Warranty, maintenance, value-added services Issues Addressed Differentiation or parity Cost, reliability, predictability Cost, flexibility, cash usage Cost, revenue, cash usage Objective Alignment of supply strategies Provide development processes that minimize complexity and cost while delivering offerings on schedule Provide lowest cost supply chain that meets market flexibility demands, with lowest possible working capital Provide service solutions that meet customer loyalty needs, generate new revenue, with minimum cost and working capital LGE Offering Analysis to optimize plan and tactics Analysis, interim leadership or project resources to accelerate development Analysis, interim leadership or project resources to speed delivery Analysis, interim leadership or project resources to ensure optimal service Alignment Development Delivery Service LGE Execs Supply LifecycleTM