Hooley Marketing in The 21st-Century

Marketing Challenges for st the 21 Century
with
Graham HOOLEY Aston Business School
Marketing in the 21st Century

A research project involving 5,638 firms in 13 countries to date:
UK; Netherlands; Greece; Austria; Finland; Ireland; New Zealand; Australia; Hungary; Poland; Slovenia; Hong Kong; China
Ongoing in Germany, Brazil, Korea, Taiwan
The changing marketplace

Customers are increasingly demanding better quality and reliability in the products and services they buy Customer wants, needs and expectations are changing more rapidly We operate in a market where all customers want essentially the same thing New products and services are coming to market more quickly than in the past Competition for sales is intense Competition is now global rather than just domestic Competition is well established and entrenched The Internet and e-commerce is having a significant impact on business practices
Total (5638)
93% 64% 41% 80% 90% 68% 44% 55%
UK (487)
93% 69% 26%* 75% 86% 63% 21%* 65%
Pressures on Marketing
Increasingly demanding customers Heterogeneous & fragmenting markets
Rapid technological change
Intense, global, fluid competition
How do the better performers manage?

Financial Performance
Overall Profit, ROI, Profit Margin
Market Performance
Sales Volume, Market Share, Customer Satisfaction
Overall Performance
Financial and Market Top vs Bottom 10%
Country differences in Performance

Best performing countries:
Greece; New Zealand; China; Ireland; Austria; Australia; Poland
Average performing countries:

United Kingdom; Finland
Weaker performing countries:

Hong Kong; Hungary; Slovenia; Netherlands
Marketing Strategy Basics
Create a LEARNING ORGANISATION
Learning Orientation
We continually question our own views of the market place Our organisational values include learning as a key to improvement Employee training is seen as an investment rather than as a cost Our ability as an organisation to learn is a key competitive advantage
0 10 20 Top 24 26 39 30 Bottom 40 UK 50 60 13 9 23
25 22 42
35 27 50
Our companys ability to learn is a key competitive advantage

Average Netherlands Greece Slovenia China Hong Kong Poland Hungary Australia New Zealand Finland Austria Ireland United Kingdom 3.77 3.88 3.2 3.8 4.02 4.22 4.27 3.95 4.1 3.85 4.23 4.41 3.97
3.2
3.4
3.6
3.8
4.2
4.4
4.6
Market research
We are good at using information about markets, customers and competitors We understand customer needs and requirements well Our market research focuses on understanding customer needs and requirements We make extensive use of market research in our organisation
0 9 2 14 5 10 15 Top 20 Bottom 25 UK 30 35 40 10 1 28
20 7 34
18 11 27
We make extensive use of market research

Average Netherlands Greece Slovenia China Hong Kong Poland Hungary Australia New Zealand Finland Austria Ireland United Kingdom 2.85 2.62 2.96 3.17 2.72 2.6 2.8 2.66 2.9 3.12 3.46 2.53 3.37 2.93
2.5
2.7
2.9
3.1
3.3
3.5
3.7
Look for developing trends
Technological
Economic
Political
Social Legal
Put your customers under the microscope

What really gives them value?
Understand what drives your competitors and their strategies
The Learning Organisation

Data Acquisition Information Processing
Take action as a result! Information Dissemination

Heightened market orientation and a focus on creating superior customer satisfaction
Market Orientation
Customer satisfaction is systematically and frequently assessed Our people know how to add value for our customers Our strategies are driven by the creation of customer satisfaction Our commitment to serving customer needs is closely monitored
0 10 20 Top 26 23 50 25 19 45
27 21 48
33 31 54
30 Bottom
40 UK
50
60
Customer satisfaction is systematically and frequently assessed

4.2
4.4
4.6
4.8
5.2
5.4
Product-Led Marketing
What do we make?
Whatever it is, make them want it!
Customer-Led Marketing
What do they want?
Whatever it is, give it to them!
Resource-Based Marketing
What are we good at that customers value?
Find a profitable match between market needs and company resources!

Heightened market orientation and a focus on creating superior customer satisfaction

Positioning built on exploiting marketing resources, assets and capabilities
Get your targeting and positioning right!
Basic Positioning Options

Premium Quality Superior Service Low Price Innovation Customised Basic Quality Limited Service High Price Imitation Standardised
Competitive Positioning
Degree of Customisation Degree of innovation Low Price Offerings Customer service provided Technical product/service quality 0
5 12 23 5 13 12 23 16 15 17 35 27 18 22
10
15
Top
20
Bottom
25
UK
30
35
40
Price Positioning
2.9
3.1
3.2
3.3
3.4
Quality Positioning
3.25
3.35
3.45
3.55
3.65
3.75
3.85
3.95
4.05
Service Positioning
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
Innovation Positioning
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
Customization Positioning
3.5
3.55
3.6
3.65
3.7
3.75
3.8
3.85
Positioning Examples
Low price, no frills
Customization Low Price Quality
Innovation
Service
Low Price
Quality leader
Customization Quality
Innovation
Service
Positioning Examples
Innovation & Customization
Customization Low Price Quality
Innovation Low Price
Service
Service leader
Customization Quality
Innovation
Service
Key Marketing Resources

RESOURCES
CULTURE ASSETS CAPABILITIES
Customer Based Marketing Assets

37
Company or brand name and reputation Credibility through being established in the market Superior levels of customer service and support Relationships with key target customers
9
13 55 36 14 51 18 36 25 11 37
10
20
Top
30
Bottom
40
UK
50
60
Customer Based Marketing Assets

3.5
3.6
3.7
3.8
3.9
4.1
4.2
Marketing Support Assets

8
Cost advantage in production Superior marketing information systems Superior cost control systems
5 16
5 1 15
4 3 15
Copyrights and Patents

0
4 17
5
Top
10
Bottom UK
15
20
Marketing Support Assets

Average Netherlands Greece Slovenia China Hong Kong Poland Hungary Australia New Zealand Finland Austria Ireland United Kingdom 3.05 3.11 3.13 3 3 3.08 3.17 3.25 3.16 2.98 3.25 3.05 3.21 3.11
2.9
2.95
3.05
3.1
3.15
3.2
3.25
3.3
Channel Based Marketing Assets

10
Good relationships with suppliers
5 24 10
Extent or nature of distribution network The uniqueness of the distribution approach Relationships with distribution channel intermediaries
4 29 7 2 21 5 3 14
10
15
Top
20
25
UK
30
35
Bottom
Channel Based Marketing Assets

3.03
3.08
3.13
3.18
3.23
3.28
3.33
3.38
Alliance Based Marketing Assets

7
Market access through alliances
2 17 4
Access to partner's technology Access to partner's managerial knowhow Access to partner's finance
2 15 4 2 13 5 2 10
5
Top
10
Bottom UK
15
20
Alliance Based Marketing Assets

2.9
3.1
3.2
3.3
3.4
Customer Linking Capabilities

Using information about markets, customers and competitors Understanding customer wants and needs Creating relationships with key customers Maintaining and enhancing customer relationships
6 41 10 1 28 20 7 34 24 8 42 23
10
20
Top
30
Bottom UK
40
50
Customer Linking Capabilities

3.45
3.55
3.65
3.75
3.85
3.95
4.05
The Relationship Marketing Ladder

Partner Advocate Supporter Client
Emphasis on customer catching Emphasis on customer keeping
Customer Prospect
(Source: Adrian Payne 1995)
Management Capabilities
14
Strong financial management
4 31 8
Effective human resource management
3 21 11
Good operations management expertise
3 24 11
Good marketing management capability
2 27
10
15
Top
20
25
UK
30
35
Bottom
Management Capabilities
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
Organisation Spanning Capabilities

Ability to launch successful new products/services Good at pricing both for demand and financial return Good internal communications Effective new product development processes
3 19 5 3 21 4 23 7 11 6 26 8
10
Top
15
Bottom
20
UK
25
30
Organisation Spanning Capabilities

3.05
3.15
3.25
3.35
3.45
3.55
3.65
3.75
Networking Capabilities
Ability to manage relationships with suppliers Good at pooling expertise with partners
2 16 6 5 3 23 5
Mutual trust with partners
3 16 5
Shared commitment with partners
3 17
10
Top
15
Bottom UK
20
25
Networking Capabilities
3.3
3.4
3.5
3.6
3.7
3.8

Rethink the role of marketing in the organisation Heightened market orientation and a focus on creating superior customer satisfaction

Establish close relationships with key customers and groups Positioning built on exploiting marketing resources, assets and capabilities
Market Based Resources

Customer Linking Capabilities .22 .37 .16 .40 .50 .42 Managerial Capabilities .26 Human Resource Assets .27 Reputational Assets .38 Market Innovation Capabilities .20
UK Performance Model
Performance
Customer Performance .25 Market Performance .21 Financial Performance .49
Marketing Support .26 Resources

Market Orientation
.44
Chi-square=34.68. sig=.05, RMSEA=.07. GFI=.97, NNFI=.89, CFI=.95
Hooley, Greenley, Cadogan, Fahy J. (2005) "The performance impact of marketing resources" forthcoming Journal of Business Research

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Marketing Challenges for st the 21 Century

Graham HOOLEY Aston Business School

Marketing in the 21st Century

Ongoing in Germany, Brazil, Korea, Taiwan

The changing marketplace

Rapid technological change

Intense, global, fluid competition

How do the better performers manage?

Country differences in Performance

Average performing countries:

Weaker performing countries:

Marketing Strategy Basics

Create a LEARNING ORGANISATION

Our companys ability to learn is a key competitive advantage

We make extensive use of market research

Look for developing trends

Put your customers under the microscope

Understand what drives your competitors and their strategies

The Learning Organisation

Take action as a result! Information Dissemination

Marketing Strategy Basics

Create a LEARNING ORGANISATION

Customer satisfaction is systematically and frequently assessed

Whatever it is, make them want it!

What do they want?

Whatever it is, give it to them!

What are we good at that customers value?

Find a profitable match between market needs and company resources!

Marketing Strategy Basics

Create a LEARNING ORGANISATION

Get your targeting and positioning right!

Basic Positioning Options

Innovation Low Price

Key Marketing Resources

Customer Based Marketing Assets

Customer Based Marketing Assets

Marketing Support Assets

Copyrights and Patents

Marketing Support Assets

Channel Based Marketing Assets

Good relationships with suppliers

Channel Based Marketing Assets

Alliance Based Marketing Assets

Market access through alliances

Alliance Based Marketing Assets

Customer Linking Capabilities

Customer Linking Capabilities

The Relationship Marketing Ladder

Strong financial management

Effective human resource management

Good operations management expertise

Good marketing management capability

Organisation Spanning Capabilities

Organisation Spanning Capabilities

Mutual trust with partners

Shared commitment with partners

Marketing Strategy Basics

Create a LEARNING ORGANISATION

Market Based Resources

Marketing Support .26 Resources

Chi-square=34.68. sig=.05, RMSEA=.07. GFI=.97, NNFI=.89, CFI=.95

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