WORKSHOP #4

CUSTOMER TARGETING (MARKETING)

STRATEGY
THE FUNDAMENTAL ELEMENTS OF THE DEFINITION OF A
CUSTOMER TARGETING (MARKETING) STRATEGY
Corporate Strategy
Customer Targeting
(Marketing)
Customer Targeting (Marketing)
Environmental Scan
Formulation of Customer
Targeting (Marketing)
Strategy
)
Budgeting
and operational budgets
Mission of the firm
Strategic thrusts and planning
challenges
Customer Targeting (Marketing)
Requirements
(Marketing) Internal Scrutiny
Strengths and weaknesses
Distinctive Customer Targeting
competencies for all
strategic categories of decisions
Industry and competitive analysis
Customer Targeting (Marketing)
intelligence
Customer Targeting
(Marketing Strategic Agenda
Strategic funds programming
MAJOR CATEGORIES OF STRATEGIC DECISIONS
LINKED TO CUSTOMER TARGETING
1. MARKETING INTELLIGENCE
It corresponds to the effort conducted by the firm to decipher competitors'
standing and to try to anticipate their future moves. Important issues are
product introductions, marketing approaches, changes in segmentation
practices, price policies, product liabilities, new distribution channels, and
improved services approaches.
2. DEFINING AND ANALYZING MARKETS
These decisions are concerned with generating marketing intelligence for
the firm. It starts with an appropriate market segmentation, and a finer
definition of product-market segments so as to capture the different
preferences and needs of customers. In each of those segments, an
analysis of the behavior of consumers and organizational buyers is
conducted, as well as of the overall strategic competitive situation.
3. PRODUCT STRATEGY
It refers to decisions on how to position a business unit product offering -
including specific products, breadth of product lines, mix, and bundling - to
serve its target markets, establishing strategic objectives for products -
market share, profit contribution, and selecting a branding strategy.
4. NEW PRODUCTS DEVELOPMENT AND INTRODUCTION
Issue included are: idea generation, screening and evaluation of ideas,
business analysis, development of a prototype, formulation of a marketing
approach, market testing in pilot regions, adjustment of administrative and
support systems, and new products introduction.
5. DISTRIBUTION STRATEGY
Decisions involved: selection of a distribution channel - whether direct or
via retailers, wholesalers, or agents; design and management of the
physical distribution system - including customer service, demand
forecasting, inventory control, materials handling, order processing, parts
and service support, warehousing and storage, procurement, packaging,
returned goods handling, and traffic and transportation; and push vs. pull
mode of operation of the distribution and sales systems.
6. PRICE STRATEGY
The central factors that affect price strategy are product competitive
positioning, product mix, brand strategy, and product quality and features.
The distribution strategy also influences how the price decision will be
affected by the advertising and sales force strategy
7. PROMOTION AND ADVERTISING STRATEGIES
An integrated promotion strategy has four components: advertising -
presentation and promotion of ideas, goods, or services by an identified
sponsor; personal selling - oral presentation to one or more prospective
purchasers; sales promotion - includes trade shows, contests, samples,
point-of-purchase displays, and coupons; and publicity - exhibition in mass
media not paid for directly by sponsor.
8. SALES STRATEGY
This encompasses all of the key decisions that should support a coherent
sales strategy including account management, cross-selling and up-
selling, territory management lead closure, opportunity management, sales
force incentives, sales team composition, and customer engagement
process.
9. SERVICE STRATEGY
The extend to which service activities become a highest priority to the firm
is a critical element of service strategy. Critical decisions are the scope of
the service offering, the degree of technical support provided, the amount
of customization of service activities, the management of account
inquiries, service dispatch, problem resolution, and service tracking.
10. MARKETING ORGANIZATION AND MANAGERIAL
INFRASTRUCTURE
It includes the development of an organization structure; planning, control
and information systems; and rewards and incentives systems in
accordance with the culture of the firm and the marketing strategy. It is
important to reflect on the proper segmentation in the organizational
structure of product marketing - which typically resides in the back-end of
the organization, and customer marketing - which typically resides in the
front-end.
MEASURES OF PERFORMANCE RELATED TO
CUSTOMER TARGETING STRATEGY
At the heart of customer targeting strategy there are four
major strategic positioning that, taken as a whole, can
serve as the primary criteria for customer targeting
strategic performance:
1. PRODUCT STRATEGY
Sales growth rate
Market share
Relative market share
Breadth of product line , market coverage, degree of
differentiation
Rate of successful new product introductions
Product bundling
2. CUSTOMER STRATEGY
Customer share
Customer retention
Profitability by customer
Customer involvement in joint product development
Degree of customization of product offering
3. DISTRIBUTION STRATEGY
Efficiency of distribution channels
Customer service levels
Distribution costs per channel
Distribution and sales force productivity
4. PRICE STRATEGY
Price sensitivity
Pricing of marketing mix
5. PROMOTION AND ADVERTISING STRATEGY
Product segmentation
Brand acceptance
Customer targeting (marketing) intelligence: ability to
anticipate customer needs and to detect changes in
marketing trends
6. SERVICE STRATEGY
Service growth rate
Breadth of service offering
Degree of customization of service
Service profitability
Service performance per customer
CUSTOMER TARGETING (MARKETING) REQUIREMENTS FROM THRUSTS
Strategic Thrust Customer Targeting (Marketing) Requirements
Relevant Competitor
Indicators
1, Product strategy
sales growth rate
market share
relative market share
breadth of product line,
market coverage, degree of
differentiation
rate of successful new
product introductions
product bundling
2. Customer Strategy
Customer share
Customer retention
Profitability by customer
Customer involvement in joint
product development
Degree of customization of
product offering
3. Distribution strategy
efficiency of distribution
channels
customer service levels
distribution costs per
channel
distribution and sales force
productivity
Very Weak Weak Even Strong Very Strong
COMPETITIVE PROFILE.
STRATEGIC PERFORMANCE MEASUREMENT OF CUSTOMER TARGETING STRATEGIC PERFORMANCE MEASUREMENT OF CUSTOMER TARGETING STRATEGIC PERFORMANCE MEASUREMENT OF CUSTOMER TARGETING STRATEGIC PERFORMANCE MEASUREMENT OF CUSTOMER TARGETING STRATEGIC PERFORMANCE MEASUREMENT OF CUSTOMER TARGETING
COMPETITIVE PROFILE.
STRATEGIC PERFORMANCE MEASUREMENT OF CUSTOMER TARGETING
(Continued)
Relevant Competitor
Indicators Weak Even Strong
6.
of service
Very Weak Very Strong
4, Price strategy
price sensitivity
pricing of marketing mix
5. Promotion and advertising
strategy
product segmentation
brand acceptance
marketing intelligence:
ability to anticipate cus-
tomer needs and so detect
changes in marketing trends
Service Strategy
Service growth rate
Breadth of service offering
Degree of customization
Service profitability
Service performance per
customer
CUSTOMER TARGETING (MARKETING) ENVIRONMENTAL SCAN -
IDENTIFICATION OF OPPORTUNITIES AND THREATS
Critical Impact
External Positive Negative
Factors (Opportunities) (Threats)
Market Factors
CUSTOMER TARGETING (MARKETING) ENVIRONMENTAL SCAN -
IDENTIFICATION OF OPPORTUNITIES AND THREATS
Critical Impact
External Positive Negative
Factors (Opportunities) (Threats)
Competitive Factors
CUSTOMER TARGETING (MARKETING) ENVIRONMENTAL SCAN -
IDENTIFICATION OF OPPORTUNITIES AND THREATS
Critical Impact
External Positive Negative
Factors (Opportunities) (Threats)
Economic Factors
CUSTOMER TARGETING (MARKETING) ENVIRONMENTAL SCAN -
IDENTIFICATION OF OPPORTUNITIES AND THREATS
Critical Impact
External Positive Negative
Factors (Opportunities) (Threats)
Government and Political
Factors
CUSTOMER TARGETING (MARKETING) ENVIRONMENTAL SCAN -
IDENTIFICATION OF OPPORTUNITIES AND THREATS
Critical Impact
External Positive Negative
Factors (Opportunities) (Threats)
Regulatory Factors
CUSTOMER TARGETING (MARKETING) ENVIRONMENTAL SCAN -
IDENTIFICATION OF OPPORTUNITIES AND THREATS
Critical Impact
External Positive Negative
Factors (Opportunities) (Threats)
Technological Factors
CUSTOMER TARGETING (MARKETING) ENVIRONMENTAL SCAN -
IDENTIFICATION OF OPPORTUNITIES AND THREATS
Critical Impact
External Positive Negative
Factors (Opportunities) (Threats)
Legal Factors
CUSTOMER TARGETING (MARKETING) ENVIRONMENTAL SCAN -
IDENTIFICATION OF OPPORTUNITIES AND THREATS
Critical Impact
External Positive Negative
Factors (Opportunities) (Threats)
Social Factors
CUSTOMER TARGETING (MARKETING) ENVIRONMENTAL SCAN -
IDENTIFICATION OF OPPORTUNITIES AND THREATS
Critical Impact
External Positive Negative
Factors (Opportunities) (Threats)
Environmental Factors
CHARACTERIZE YOUR PRESENT CUSTOMER TARGETNG POLICIES
REGARDING THE MAJOR DECISION MAKING CATEGORIES

Decision Category Description of Policy Strengths Weaknesses

Marketing
Intelligence

















Note: In the assessment of strengths and weaknesses try to have relevant competitors in mind and
use proper strategic performance measurement.
CHARACTERIZE YOUR PRESENT CUSTOMER TARGETING POLICIES
REGARDING THE MAJOR DECISION MAKING CATEGORIES (Continued)

Decision Category Description of Policy Strengths Weaknesses

Defining and
Analyzing
Markets

















CHARACTERIZE YOUR PRESENT CUSTOMER TARGETING POLICIES
REGARDING THE MAJOR DECISION MAKING CATEGORIES (Continued)

Decision Category Description of Policy Strengths Weaknesses

Product
Strategy


















CHARACTERIZE YOUR PRESENT CUSTOMER TARGETING POLICIES
REGARDING THE MAJOR DECISION MAKING CATEGORIES (Continued)

Decision Category Description of Policy Strengths Weaknesses

New Products
Development and
Introduction

















CHARACTERIZE YOUR PRESENT CUSTOMER TARGETING POLICIES
REGARDING THE MAJOR DECISION MAKING CATEGORIES (Continued)

Decision Category Description of Policy Strengths Weaknesses

Distribution
Strategy


















CHARACTERIZE YOUR PRESENT CUSTOMER TARGETING POLICIES
REGARDING THE MAJOR DECISION MAKING CATEGORIES (Continued)

Decision Category Description of Policy Strengths Weaknesses

Price
Strategy


















CHARACTERIZE YOUR PRESENT CUSTOMER TARGETING POLICIES
REGARDING THE MAJOR DECISION MAKING CATEGORIES (Continued)

Decision Category Description of Policy Strengths Weaknesses

Promotion and
Advertising
Strategy

















CHARACTERIZE YOUR PRESENT CUSTOMER TARGETING POLICIES
REGARDING THE MAJOR DECISION MAKING CATEGORIES (Continued)

Decision Category Description of Policy Strengths Weaknesses

Sales Strategy



















CHARACTERIZE YOUR PRESENT CUSTOMER TARGETING POLICIES
REGARDING THE MAJOR DECISION MAKING CATEGORIES (Continued)

Decision Category Description of Policy Strengths Weaknesses

Service Strategy



















CHARACTERIZE YOUR PRESENT CUSTOMER TARGETING POLICIES
REGARDING THE MAJOR DECISION MAKING CATEGORIES (Continued)

Decision Category Description of Policy Strengths Weaknesses

Marketing
Organization and
Managerial
Infrastructure














CUSTOMER TARGETING (MARKETING) STRATEGIC AGENDA
1 -
2 -
1
B
u
s
i
n
e
s
s

P
r
o
c
e
s
s
e
s

Organizational Units
Performance
Strategic Thrusts Measurements
Key role in formulation and implementation B - Business Model
Important role of support and concurrence OE - Operational effectiveness
- Identifies the 'Champion', who takes leadership for the strategic thrust execution CT - Customer Targeting
I - Innovation
CUSTOMER TARGETING (MARKETING) STRATEGIC AGENDA
1 -
2 -
1
B
u
s
i
n
e
s
s

P
r
o
c
e
s
s
e
s

Organizational Units
Performance
Strategic Thrusts Measurements
Key role in formulation and implementation B - Business Model
Important role of support and concurrence OE - Operational effectiveness
- Identifies the 'Champion', who takes leadership for the strategic thrust execution CT - Customer Targeting
I Innovation
ASSIGNMENT OF PRIORITIES TO STRATEGIC THRUSTS


Priorities
Strategic Thrusts

A B C Weight




























A - Absolute first priority (postponement will hurt competitive position significantly).
B - Highly desirable (postponement will affect competitive position adversely).
C - Desirable (if funds were available, competitive position could be enhanced).
DEFINITION OF STRATEGIC THRUSTS

Name

Description





Responsible Manager

Other Key Participants


Other Important Contributors


Key Indicators for Management Control and Targets






First Major Milestone Description

First Major Milestone Date

Resources Required


Statement of Benefits







TESTS TO EVALUATE THE QUALITY OF THE STRATEGIC
AGENDA


1. Comprehensiveness





2. Stretch





3. Monitoring and Control- Ease of Implementation





4. Motivation- Quality of Working Environment





5. Vulnerability