Final Refelection

Final Reflection Paper: GSB551 December 2016 (Final Blog post)

Please complete a short blog. Please complete it by Friday 12/16 5pm

You do not need to refer to any cases or provide citations or sources. You simply need to reflect on your own experience in Managerial Marketing GSB551.  I am providing these 3 questions as starting points. You can add any other thoughts or reflections regarding your learning.

Question 1 on Business/Marketing: The Peter Drucker quotes shown below were the exact same ones we talked about in our first class in October.  Which ones resonate with you regarding business, marketing, the cases, the team process, and what we covered in this course? (You do not need to comment on all!) If possible, relate the quote to a company or brand we studied.

Quotes by Peter Drucker (1909-2005)

•       “Efficiency is doing things right; effectiveness is doing the right things.”

•       “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.”

•       “The purpose of business is to create and keep a customer.”

•        “Because its purpose is to create a customer, your business has two purposes and two purposes only: Marketing and innovation. Marketing and innovation make you money, generate sales, produce profit. Everything else is an expense...”

•       “The leaders who work most effectively, it seems to me, never say "I." And that's not because they have trained themselves not to say "I." They don't think "I." They think "we"; they think "team." They understand their job to be to make the team function. They accept responsibility and don't sidestep it, but "we" gets the credit…. This is what creates trust, what enables you to get the task done.”

•       “The best way to predict the future is to create it.”

•       “You can either take action, or you can hang back and hope for a miracle.  Miracles are great, but they are so unpredictable.”

From my perspective all of these quotes reflect all of the areas: business, marketing, the cases, the team process, and what we covered in this course.  It seems that all of these areas are successful when these are attributed to their mission. When we utilize these in quotes or thoughts in reviewing cases and in a group situation we can collaborate and discover a lot about the company that we are looking at. Take Nordstrom's, Apple, and Starbuck's they are always looking to see what the customers will want, how they want to be treated and what can they do to make them want what they offer. 

Question 2 on Teams: Reflect on the dynamics of collaboration as you experienced it within your own team and as you observed it on the other teams. Did you do some things by design to manage relationships?  How did you make progress regarding analyzing data and using it effectively, developing and evaluating creative alternatives, and collaboratively making decisions? What strategies did you use that helped?

The group that I had was amazing, Willy and Will made it easy to banter back and forth until we determined the right course of action to take when detailing these cases. We all found ways to incorporate what we thought needed to be reviewed and what our desired outcome would look like. None of us were totally sure about what we were doing but we sacrificed our spare time and worked together to make it all happen. This was a great group!

Question 3 on Overall Outcomes: What are your most important new takeaways from this course? What will help you as you continue your studies and in your world of work? Add anything else of importance when you reflect back on key learning.  What should we STOP/START/CONTINUE doing when offering GSB551?

I biggest take away for me is the fact that no matter what or doing in life or business, marketing is important and needs to happen in order to be successful. We need to market ourselves when presenting to upper management, interviewing for a job, or just being a student. Marketing is an important part of life, we are all some form of a customer, internal or external. Individuals and companies that understand this fact thrive and grow, the key to all aspects of life in general. 

The class was extremely stressful in the beginning due to the addition of the review material. I understand the point behind this tactic but given my business background it was a little over the top from my perspective. However, knowing that most of the kids did not have any exposure to marketing in undergrad, this was probably a good decision. My recommendation going forward is to maybe incorporate these basics into assignments that enforce the basics. Take it to real life situations that show them that marketing is not just about retail but in fact encompasses almost everything they touch in life. I know easy said, tough done but in business this is an important aspect, these kids will be going into upper management positions and yet if they cannot see things for what they are, the companies and associates that they work for will suffer. I believe that you will find a way to make this class everything it needs to be, I have learned a lot from your classes. If I can help in anyway please let me know, what you teach is important.

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Week 7 Blog

Week 7 Blog:

FROM THE NOTES ON THE CASE: Customer Experience/Journey   Review the exhibit from “Competing on Customer Journeys” and the marketing traditional funnel.  Create a workflow of how Starbucks attracts, retains, builds deeper relationships, and ultimately enthusiastically loyal customers who are ambassadors, looking at the digital initiatives and the in-store experience.  What has contributed to or detracted from their “unique customer experience” in every venue?  See Figures 4.3 and 6.2.  Analyze how Merry Mondays worked as a recent promotion (funnel/customer journey.)  If you could create a new promotion for SB, what would it be and what would it do to the funnel/customer journey?

Blog Assignment

1.       On this week’s blog reflect on your team’s strategies/tactics for the Starbuck’s Loyalty case and those of the other teams. How was this case different in the process and outcomes than the Pantene/Nielsen case?

The problem statement was different, the changing of CEO’s was not apparent to us as the problem. We identified that no matter what the issue it was apparent that they keep market share and stay ahead of the curve. Technology is a huge deal for Starbuck’s and so we utilized a timeline to see how and what was implemented and if a significant impact correlated to their increase. Pantene/Nielsen was a market share issue but was it really an issue, it was a product line profit decrease but in general they still showed success within a shift to another one of their popular brands. I think both companies have identified the importance of figuring out a root cause, by doing so they place themselves in a position to enhance themselves in many ways. Promotion and packaging was the issue for Pantene, an item that is an occasional purchase due to the time it takes to utilize the product. Starbuck’s is a quick self indulgence that or can be fleeting moment with an opportunity for multiple purchases by one individuals in a day. More reputation and satisfaction based.

2.       Then, create a promotional calendar of what SB should do (in-store and digitally) and when they should do it--for various target markets using their Customer Relationship Management system (CRM). Also, as discussed in class, they could do a better job of promoting their causes, so integrate that into the calendar.  Remember, their Triple P management philosophy:  The CFO wants to reduce costs while increasing traffic and order size and the number of loyal customers using the app; the sustainability goals are looming to get consumers to alter their cup usage (and other things).  They want to streamline operations to make the line move faster and keep both employees and customers delighted.  Prepare a calendar using the next page as your template.  Put it on your blog and bring a copy to class next week.

Design a Better Loyalty Promotion Plan for Starbucks to Build Profitable Business using CRM

Group 1: Most Loyal/Promoters.  Goal: Increase $ per purchase; Stimulate positive word-of-mouth and gifting; Attract buy more than coffee (food); Convince them to convert to their own mug.  Consider: What would a VIP program do for them? What special perks come to VIP’s? 

Quarter 1: Team up with snap chat to entice people to snap a pic of their favorite beverage in their reusable cups

Quarter 2: Manufacture cups that personalize the experience, like mother’s day, father’s day, etc. Give them a holiday package deal and entice them to purchase a gift card. Adding points for the great gifting idea.

Quarter 3: Work with Groupon to develop an initiative for office teams to compete, stipulation they need to bring their own mugs

Quarter 4: Hold a jingle/ad contest inviting customers and non-customers the opportunity to be a part of the company. The goal will be promotion of “Thinking Green.”

Group 2: Passives/Satisfied/not yet loyal.  Goals: Convert to regular user.  Increase number of times per month come to SB. Offer reasons/incentives to prefer SB brand. Join Loyalty program/download and use app.

Quarter 1: Find a way to enhance their benefits for using the program, merge entire families points making it appear to be a better way to increase points and benefits faster

Quarter 2 Promote a competition by store, the individuals with the most points have a chance to win free coffee for a month/year.

Quarter 3: Offer free merchandise for so many purchases

Quarter 4:

Group 3: Infrequent users of SB who are members of Loyalty Program.  Goals: Increase frequency of visits.  Promote new products and flavor of the month. 

Quarter 1:

Quarter 2:

Quarter 3:

Quarter 4

Starbuck’s Triple P and Circular Economy

Starbuck’s Triple P and Circular Economy

1.       How are they doing with this Triple Bottom Line approach to running their business? Are they doing well on all 3 dimensions?

Starbuck’s is doing extremely well in regards to the triple bottom line approach. They continue to look at each area to see what can be improved. Profit is their ability to continue to gain new vision as to what the customers want to see and or desire from them as a company. They utilize their customer’s ideas via technology and other sources. They are always aware of the needs of their employees, as we have seen with their tuition initiative. Starbucks has a huge connection with the community and the environment. This is a great way for them to gain positive support via word of mouth.

2.       How does their approach fit with the “circular economy” article?

They are trying to encompass a circular economy model but given the nature of the service they provide, that will be extremely difficult. Human beings have good intentions when it comes to wanting to do the right thing but ease and convenience tends to control their lives. They can offer or sell all the reusable cups they want but it will not reduce the number of cups and other disposables they require for operations. I was the chairman of the recycling committee where I worked and trying to put circular economy into motion was a huge undertaking, we are dealing with free will. I found that taking the redundant waste at the beginning was more beneficial but in the case of Starbuck’s they only have a couple of choices. Biodegradable cups, which adds cost and or partner with a company that can take used paper cups and recycle them into something else of value, not an easy task in regards to food related items.

3.       Does this corporation mission and set of values fit with marketing?

In my opinion it does, they have identified with numerous groups and have developed a following. Their credibility has increased and keeps increasing. They continue to develop and grow in ways set forth by customer satisfaction and desire. Customer is king, this is evident when we review the highlights of all of the most successful company’s such as Nordstrom’s. Appealing to the masses in ways that touch them emotionally or a way that identifies with a cause or ideal.

Customer Loyalty Isn’t Enough. Grow Your Share of Wallet

Customer Loyalty Isn’t Enough. Grow Your Share of Wallet

Companies spend a great deal of time and money trying to improve customer loyalty by measuring and managing metrics like:

·       Satisfaction

·       Net promoter scores

Traditional gauges of loyalty correlate poorly with what matters most:

·       Share of wallet- the percentage of a customer’s spending within a category that’s captured by a given brand, or store or firm

Making changes to increase satisfaction won’t necessarily help

The rank that consumers assign to a brand relative to the other brands they use predicts share of wallet according to a simple, previously unknown formula, the Wallet Allocation Rule.

·       Correlation between a brand’s Wallet Allocation Rule Score and its share of wallet:

o   A perfect correlation is 1.0

o   Remarkably consistent 0.9

o   Robust 0.8

o   Very weak 0.1

The Rule in Practice

·       The new rule has important implications for strategy. To understand what drives changes in share of wallet, focus needs to be shifted from drives of satisfaction to drivers of rank.

o   First you can’t assess bran performance as if it exists in a vacuum

o   Second, the rule makes it possible to craft strategies that directly affect brand performance and then measure the impact on share of wallet

The Wallet Allocation Rule is clear on this point:

·       If you can’t prove your rank

·       You can’t prove your share of wallet

How to improve your rank:

·       Follow the wallet allocation rule to establish the share of wallet of each competitor your customers use

·       Determine how many customers use each competitor

·       Calculate the revenue that goes from your customers to each competitor

·       Identify the primary reasons your customers use your competitors

·       Prioritize your opportunities to improve your share of wallet

The One Number You Need to Grow

The One Number You Need to Grow

Loyalty – the willingness of someone- a customer, an employee, a friend – to make an investment or personal sacrifice in order to strengthen a relationship.

·       Customer loyalty – much more than repeat purchases

Loyalty:

·       Affects profitability

·       Drives top-line growth

·       Helps eliminate outflow

Loyal Customers:

·       Devote a large share of their wallets to a company they feel good about

·       Talk up the company to their friends, family, and colleagues (word of mouth)

·       They promote that they’ve received good economic value from a company

·       They put their reputations on the line for the company/product

·       Bring in new customers – no charge to the company

The Wrong Yardsticks

Loyalty is so important to profitable growth, measuring and managing it makes good sense.

The best companies focus on:

·       Customer retention rates (that measurement is merely mediocre)

o   Retention rates provide a valuable link to profitability-their relationship to growth is tenuous

o   Track customer defections – the degree to which a bucket is emptying rather than filling up

o   Retention rates are poor indication of customer loyalty in situations where customers are held hostage by high switching costs or other barriers, or other factors

·       An even less reliable means of gauging loyalty is through conventional customer satisfaction measures:

o   Satisfaction lacks a consistently demonstrable connection to actual customer behavior and growth

o   American Consumer Satisfaction Index- publishes quarterly in the Wall Street Journal

§  Reflects the customer satisfaction ratings of some 200 U.S. companies

·       Even the most sophisticated measurement systems have serious flaws:

o   Customer satisfaction surveys

Getting the Facts

Useful metrics for gauging customer loyalty:

§  Customer surveys:

o   Matching survey responses from individual customers to their actual behavior

o   Repeat purchases and referral patterns – over time

§  Loyalty Acid Test – a survey designed to establish the stat of relations between a company and its customers

§  Promoters – customers with the highest rates of repurchases and referral, gave ratings of nine to ten

§  Passively Satisfied – customers that logged a seven or eight

§  Detractors -customers that scored from zero to six

Clustering customers into three categories- promoters, the passively satisfied, and detractors- turned out to provide the simplest, most intuitive, and best predictor of customer behavior

§  Increase the number of promoters and reduce the number of detractors more readily than increasing the mean of their satisfaction index by one standard deviation

The Growth Connection

§  The only path to profitable growth may lie in a company’s ability to get its loyal customers to become, in effect, its marketing department

o   Brief email survey asking respondents to rate one or two companies with which they are familiar:

§  Obtain comparable and reliable revenue-growth data for a range of competitors where there were sufficient consumer responses

·       They plotted each firm’s net promoters

·       The percentage of promoters minus the percentage of detractors – against the company’s revenue growth rate

Developing products for a circular economy

Developing products for a circular economy

Cross-functional collaboration and customer-focused design thinking can help companies reap more value from the energy and resources they use
• When a consumer uses a product infrequently or discards it because it has worn out, at least some of the energy and material that went into making the product has been wasted.
• Some businesses are using circular-economy principles to create products that are durable, easy to reuse or recycle—and profitable
Two tactics can help:
1. Devising a highly collaborative product-development process that both accounts for and helps to determine sourcing requirements, production methods, marketing, sales, and other aspects of how goods are made and how they are handled at the end of their lives.
2. Use design thinking, which can help companies discover unexpected ways of meeting customers’ needs with much greater resource efficiency than in the past.
How collaboration helps companies develop circular economy products
The idea of a circular economy- a company would look at how it might manage the entire life cycle of its products in order to maximize the value of them and their component materials.
Circular-economy principles:
• Seen at work today in the mobile-phone sector
• They collect these phones, fix them, install fresh software, and sell them, especially in markets where many people cannot afford or do not need the latest models.
Developing a product that a company can manage over its life cycle requires more collaboration than is customary. Product design has to be conducive to:
• Reuse
• Repair
• Recycling
Company’s need processes and systems to help customers when products wear out, approach obsolescence, fail, or no longer provide satisfaction.
All departments and organizations need to have a say in product development:
• Procurement
• Marketing
• Sales
• Other company departments
• Suppliers
• Freight carriers
• Distributors
• Retailers
• entities all along the value chain
User-centered design approach- focuses on finding the best way to meet customers’ needs, rather than the best way to design products.
How design thinking reinforces circular-economy principles in product development

• Design thinking starts with observing customers in their everyday lives to learn about their material needs and about how well (or poorly) those needs are met by existing products.
• Product designers, marketing specialists, engineers, and others involved in making and selling products use the resulting insights on customer needs to rapidly prototype, test, and refine new concepts for products and services, without relying on old assumptions that might constrain their ideas.
• Design thinking also means asking how to provide value to consumers using a minimum amount of material
• Design thinking thus relies on the sort of collaboration that is central to developing circular-economy products
A design-thinking process, the company would start with:
• one- or two-day working session with all the affected departments and other organizations in the value chain
• Participants would discuss customer needs and relevant business operations— particularly manufacturing and service—and come up with ideas for new offerings as well as the business-model changes needed to support them
• the product-development team would create prototypes
• prototypes would be shared with the same groups from the initial meeting and discussed in another working session
• Product developers would then refine their designs for further consideration by the wider group of stakeholders
• The process would continue until the product is ready to be made and the business changes required to support it have been defined by the relevant departments
• final decision to bring out the product is also thus a choice about reorganizing the business so it can capture maximum value from the new product over its entire life cycle
Increasing pressure from consumers and governments, particularly in developed countries, to be better stewards of resources and the environment.
A major financial and economic opportunity
Each year some $2.6 trillion worth of material in fast-moving consumer goods—80 percent of the material value—is thrown away and never recovered
Companies that successfully design products for a circular economy stand to capture considerable value and create lasting, rewarding relationships with customers.

Competing on Customer Journeys

Competing on Customer Journeys

Digital technologies over the past decade has created “empowered” consumers so expert in their use of tools and information, they call the shots, hunting down rock bottom prices.

·         Retailers/Service suppliers scrambled to develop big data and analytical capabilities to understand customers, regain control

·         Leveraging emerging technologies, processes, and organizational structures in order to restore the balance of power, create new value brands

Journey’s – central to the customer’s experience of a brand-and as important as the product itself- providing competitive advantage

·         Companies are shaping their paths, leading rather than following

Example: Sungevity-manages the end-to-end process

·         Sales and custom installation

·         Coordinating the work of an ecosystem of companies:

o   Supply

o   Finance

o   Install

o   Service the panels

Their “product” is seamless, personalized digital customer journey, based on innovative data about the solar potential of each home or business. Making the “journey” compelling that once the customers encounter it, competitors may not even be considered.

·         Reconfigured the classic model of the decision journey

·         Immediately paring the consideration set to one brand

·         Streamlining the evaluation phase

·         Delivering the customer into a “loyalty loop”

                      

Getting Proactive (McKinsey’s marketing and sales practice)

Consumers decision journeys

·         How people move from initially considering a product or service to purchasing it and then bonding with the brand

·         The sequence of interactions consumers have before they achieve a certain aim

o   Example: transferring cable service to a new address

·         Firms have shifted strategy from reactive to aggressively proactive

Four Key Capabilities

Companies build the most effective journeys master four interconnected capabilities:

1.       Automation- involves the digitalization and streamlining of steps in the journey that were formerly done manually

2.       Proactive personalization-companies take information gleaned either from past interactions with a customer or from existing sources and use it to instantaneously customize the shoppers experience

3.       Contextual interaction- using knowledge about where a customer is in a journey physically or virtually to draw him forward into the next interactions the company wants him to pursue

4.       Journey innovation- ongoing experimentation and active analysis of customer needs, technologies, and service in order to spot opportunities to extend the relationship with the customer

The New Journey Management Organization

Technology smarts are necessary but not sufficient for designing competitive, continuously improving journeys; companies also need new organizational structures and types of management

                                               

Chief experience officer - Overseeing all of a firm’s interactions with customers

Journey focused strategist – helps guide decisions on which journey investments and customer segments to focus; he or she prioritizes current journeys for digital developmen and spots opportunities for new ones.

Journey product manager (AKA: solution managers, experience managers, or segment managers)- the journey’s economic and creative stewards. They have ultimate accountability for its business performance, managing it as they would any product.

Product managers- judged according to how well they meet an array of product-specific measures, including journey ROI.

Scrum teams- specialists from across IT, analytics, operations, marketing, and other functions. these team members work to understand customers’ wants and needs at each step of the journey and make taking the next step worthwhile.

o   Nordstrom is one company that uses this scrum-team approach