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CAPABILITY BASED MARKETING.
Term Paper ID:28532
Essay Subject:
Discusses its paradigms & strategies. Analyzes a hypothetical company undergoing capability marketing to sell software on internet.... More...
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Paper Abstract:
Discusses its paradigms & strategies. Analyzes a hypothetical company undergoing capability marketing to sell software on internet.
Paper Introduction:
UTILIZING CAPABILITY-BASED MARKETING
TO SELL SOFTWARE ON THE IINTERNET
Executive Summary
The theory of capability marketing, as suggested by many scholars (Doyle, 1998; Doyle, 1999; King, 1999) provides valuable paradigms to follow when embarking upon marketing management.
Several of these paradigms will be examined and tested in this paper by applying them to a hypothetical software company, Solfan, Inc.
Using the capabilities-marketing construct, Solfan's operations will be analyzed, and then a recommended strategy for using the company's capabilities will be suggested for implementation. At the conclusion, the suggested strategy will be analyzed in
Text of the Paper:
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Contemporary thinking is that notall customers are equally valuable. Capability-marketing is information driven, and thisinformation is a combination of both empirical theory and practical,experience-based knowledge. At the conclusion, thesuggested strategy will be analyzed in light of projected and conceiveddifficulties in implementation. Guard-Pro is a Sym-Tech-based SQL front end adapter designed toenable Oracle 7 database software to automatically link to either Linux orNT servers. King, D. (2nd ed.).London: Prentice-Hall Europe. P. In this way, the marketingcompany will develop the capabilities to deal effectively with the demandsof the contemporary environment, according to Peter Doyle (1998). Several of these paradigms will be examined and tested in this paperby applying them to a hypothetical software company, Solfan, Inc. In assessing competition, marketing organizations must considerseveral factors. (1993 March). Westbrook, R., & Williamson, P. The findings of this study explained how the capability-basedmarketing approach could be applied to achieve some of the goals predictedby Peter Doyle (1998). Bibliography Doyle, D. More qualitative analysis is needed,according to Doyle (1999), to profile the current customer base toconcentrate marketing resources on value-added customers. This retooling, done in four months, enabled Solfan to modify itssoftware program to serve as an NT firewall protection system only. S. Adding value to marketing. Doyle points out that a commonmistake made by marketers is to see the subject of marketing as afunctional discipline rather than an integrative business process. Conclusions Solfan can solve many of the problems created by the changing softwaremarket by first assessing its core capabilities and resources: where doesit have a competitive advantage? Practical Difficulties Projected The strategy outlined above, even though it calls for a reduction inthe face-to-face sales force (one which will result in tremendous cost-savings) will give Solfan a sales presence in the medium it understands,which is an essential element of capability marketing. Marketplaces areconstantly changing. Introducing Solfan's Capability-Marketing Situation Solfan, Inc. Using this asa framework for Solfan, we recommend the following strategy.Step 1. 3. The analysis should entail competitive advantages, productinnovations, channels, customer service, warranties, and cost structures.3. Retail price tobusinesses running either the Linux or NT platforms was $27,4 for thebase unit, with additional upgrades that were arranged on a customizedbasis. (1998). This upgraderesulted in a 74 percent obsolescence of the Solfan product, and thecompany was faced with a critical decision. The products and services offered: Determine which of itssoftware offerings have the best odds for future payoff. Using the capabilities-marketing construct, Solfan's operations willbe analyzed, and then a recommended strategy for using the company'scapabilities will be suggested for implementation. Mass customization:Japan's new frontier. Develop a market segmentation analysis to determine the potentialnumber of users for NetLock. Globalization, information technology, networking, andan information-based economy are leading to a replacement of massproduction by mass customization, which in turn, is leading to a shift awayfrom mass marketing and toward relationship marketing. (1999). Mass production ledto mass marketing. Solfan must assess its capability marketing strengthsin four areas: 1. This segmentation analysis should not be donesolely in terms of what it thinks should happen to its product, NetLock,but should examine the entire business software consumer base worldwide.Since it has sided with the Microsoft NT platform rather than Linux, partof this segmentation can be obtained through Microsoft Partners DevelopmentPrograms. Marketing management and strategy. London: Kogan Page. First, we can expect that certain members of the sales force (thosethat were left after the first massive change during the retooling effort)will resist the change, since they will be (in their minds) reduced to"information providers" rather than "purchase motivators." Second, we can assume that there will be resistance from some of theoriginal members of the company that resist the idea of re-engineering costreductions even though they will result in quality enhancements. New products in most industries increasingly depend on skills in awidening range of technologies. The only decisions where marketing had sole responsibility tendedto be tactical: promotions, line extensions, and superficial positioningpolicies" (Doyle, 1999, 23).Step 2: Analyze the Competition Solfan should look at the competition in practical and very realisticterms. Solfan must be able to learn from thosecustomers, those suppliers, and those competitors who place the moststringent demands and pressures on the company. What the literature on capability-based marketingdoes not reflect is how much its costs a marketing company to short-changeits proven good customers to expend most of its efforts on problemcustomers. (1998 April). While suppliers, intermediaries, and competitors are majorplayers along with consumers in capability-based marketing, there is noquestion that the concept is based in consumer satisfaction. (1999). was founded in 1996 to sell a proprietary software calledGuard-Pro. King (1999) contends that companies such as Brown Thomas, WaterfordWedgeworth, Superquinn, Dell, and Microsoft are market leaders in theirfields because they all know their customers, anticipate their needs, andkeep improving the value they offer them. The dynamics of a marketplace are subject to all ofthe forces that change can exert on market segments, products and services,and the strengths and weaknesses of a company (McKay, 1998). Capability-basedmarketing holds that companies should learn to be better marketers and tohone their capabilities through diligent efforts to serve their mostdemanding customers. Dublin, Ireland: Accounting and finance Department,National College of Ireland. Most companies are in more than one arena. In May, 1997, Oracle upgraded to version 8, and launched a massivemarketing program extolling the benefits of the new version. Marketing's strategic importance. It could retool its softwareto match the Oracle upgrade, or it could redesign the front end to run onlower-hierarchy computers. Among the more important of these factors is the demandenvironment. It is that shiftthat our hypothetical company, Solfan, is going through right now. 35). Problem Identification McKay (1998) states that a firm, to respond effectively to thechanging environment, must assess its business in terms of the capability-marketing concept. Using this approach would eliminate what Doyle (1998) observed to bethe primary causes of marketing failures. European Management Journal, 11, 38. http://www.mii. These companies, according to King (1999) do not waste time and moneyon the wrong customers. This approachis consistent with capability-based marketing (Westbrook and Williamson,1993). Thus, marketing firms are"moving from a confrontational to a partnership culture in which members ofthe channel had normally, long-term contracts to work together to reducetotal system costs or bring new products to market" (Doyle, 1999, p. In the contemporary environment, network competition is an essentialcharacteristic of successful marketing firms. Capability-marketing, it will be recalled, helps marketing managersdevelop the capabilities to attain a competitive advantage in thecontemporary and ever changing environment. The original Guard-Pro package was OEM-based with a licensingagreement for Base Coding from both Oracle and Microsoft. ie/discuss.htm McKay, E. 2. UTILIZING CAPABILITY-BASED MARKETING TO SELL SOFTWARE ON THE IINTERNET Executive Summary The theory of capability marketing, as suggested by many scholars(Doyle, 1998; Doyle, 1999; King, 1999) provides valuable paradigms tofollow when embarking upon marketing management. Identifying and keeping strategic, loyal andprofitable customers. A Strategy for Solfan Capability-based marketing primarily is a consumer-led vision ofmarketing. "Marketing directors have sought to make marketing decisions ratherthan share responsibility for satisfying customers with cross-functionalteams. However, since it is a radicalchange for firms such as Solfan, a number of resistances can be expected. Thenew product, NetLock was capable of running on a Pentium 5, required 13megs of disc space, and was upgradable to 25 units linked with NT software. Marketing(American Management Association International), 1, 3-8. The business arena: The marketplace is where customers, thedistribution mix, competitors, and the general business environment allinteract to create the arena of marketing activity. Doyle, P. The major forces that are driving capability-marketing are (1) theglobalization of markets, (2) advances in information technology andnetworking, (3) the evolving information age economy, and (4) thetransition from mass production to mass customization. Segment the Market 1. The strengths and weaknesses of the company in each market:Measure present and future prospects for the NetLock software and otherrelated products. The market segments it has serviced or can service:Determine which segments of the market will be important in the future. Expand the company web site to a sales tool. The new product was introduced in January, 1998, at Comdex and orders for12, units were taken, with a retail price of $812. Customers are clearly segmented and the operatingmodel, including design, marketing, sales, and measurement, is geared todelivering superior value and satisfying their exact needs. Those orders were exciting, but hardly generated enough potentialrevenue to allow the company to maintain its marketing force. 4. And since NetLock is a network-basedproduct, pitched at a much lower price than the original $27, product,the information-dissemination abilities of the Internet make it a viablesales tool. Introduction to Capability Marketing Essentially, capability-based marketing holds that a firm is dependenton the relationships that it holds, and its success depends on the extentto which it manages those relationships in a mutually profitable manner(Doyle, 1999). The companymanagement was satisfied that there was a good consumer market for thislower-end firewall protection and decided that before it could make adecision about the marketing direction it should take, it needed to do somethorough marketing research including segmentation analysis. It's a given that most of the E-commerce on the Internet has been inthe business-to-business arena. Solfan executives could find instructive David Doyle's idea that thekey question which marketing organizations should be asking in thecontemporary environment is as follows: Should the company go for the mass-customer market or be more selective? Companies can no longer master these skillalone, instead they rely on collaborative networking. Among theperceived benefits, is the fact that it will enable Solfan to extend itsskill base and substantially enhance its capacity for innovation. Networking alsoallows firms to move faster, which is particularly important now with first-mover advantages becoming an increasingly key determinant of long-termprofitability and share.
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