DuPont Latin America Programa de Formaci

1
DuPont Latin America Programa de Formación en
Marketing

• Taller 2 Entendiendo el Mercado
• Hojas de trabajo
• 13 y 14 de junio de 2006
• Buenos Aires

2
Workshop 1Business Strategy Inputs

• Objective Full understanding of the Business
  Strategy environment affecting the Teams project
• Output A list of Business Strategy
  considerations/parameters/ limitations/guidelines
  the Team must incorporate in its strategic
  thinking
• Steps
• Review the list of sample Business Strategy
  inputs (Slide 11)
• Write down the Business Strategy inputs that
  affect this project rephrase as appropriate to
  business situation as you know it
• Decide which one require validation and note plan
  accordingly
• Review Slide 12 for possible relevance to Teams
  project incorporate as appropriate
• Designate spokesperson to characterize Teams
  Business Situation for the class.

3
Value Adding Chain

• Definition
• A progress of steps from fundamental raw
  materials through goods purchased by
  end-use consumers

4
Simplified Value-Adding Chain
C O N S U M E R
Customers
E N D U S E R
Raw MaterialSupplier
Value Driver
Transactional Customer
DuPont
Information
Offering
Revenue
5
VAC Player Definitions

• Transactional Customer
• That level in the chain that we exchange goods
  and services for revenue
• Value Driver
• That level in the chain that best interprets
  end-user needs and values into specifications and
  represents (sometimes dictates) them along the
  chain
• Power Center
• That level of the chain having the ability to
  affect what happens in the industry
• May be same level as Value Driver
• VAC Influencer
• - People or entities(who may not
  purchase/handle products) that
  influence the buying decisions made by targeted
  customers

6
US Mobile AC After Market VAC
7
Industrial Motors Value Adding Chain (Global)

• OEMs are primary value
• drivers and power center
• Laminators have been gaining
• power

Equipment Vendors (15)
Other Insulation Materials
Sub-assembler (20)
End-user (1000s)
Distributor/ Fabricator (12)
DuPont NOMEX
Laminator NMN DMD (80)
Motor OEM (50)
Polyester Film Matt
Core Steel Magnet Wire Suppliers
Influencers UL, IEC

• Key competitors
• Lower temperature sheet
• insulation materials Mfg. (Quin-T)
• Laminators - polyester based
• laminates

8
VAC Dynamics Questions

• What level is the value driver?
• What level has the power currently?
• How would you anticipate that power distribution
  might change in the future? Why?
• Do we anticipate structural changes due to
• Acquisitions/Divestitures
  -Technology Shifts
• Backward/Forward Integration -Failures / New
  Entrants
• Alliances
• How might we gain power and influence along the
  chain to create and extract greater value?
• Where along the chain is the business currently
  focused?
• Where should it be focused in the future?

9
Workshop 2 Value Adding Chain (VAC) Update

• Objective Update each Teams Process Map of
  how the VAC operates
• Output An easily-understood drawing showing
• -- VAC Players relationships along the VAC
  approx. per level
• -- Key flows of Value Adding activity
• -- Key influencers
• -- Notes indicating key dynamics
• -- Value Driver estimated of decision
  making power re inputs like ours at each level
• -- Current allocation of DP marketing effort
  at each level of VAC
• Steps
• Review current draft of VAC diagram list new
  inputs from Team pre-work exploration
• Incorporate new information into outputs listed
  above update VAC Process Map accordingly
• Prepare report back overview of Project VAC and
  key learnings.

10
Value Adding Chain Analysis Summary

• Understanding the VAC is a foundation for
  effective marketing Planning
• Describes the various levels of the Value Chain
  in terms of roles, power, critical success
  factors, values and needs
• Recognizes value-adding activities throughout
• Forces attention beyond the transactional
  customerall the way to the End User/Consumer,
  the ultimate determiner of value
• Assesses how well the Value Chain is working
  (effectiveness and efficiency) and opportunities
  for improvement
• Prompts real consideration of how your business
  should allocate/focus marketing resources along
  the VAC to become more influential in selection
  of products/services used.

11
Capturing Value Downstream
Direct Customer
Your Business
End Customer
Distribution

• Does our offering provide benefit/value to the
  End Customer? If not, what is the last level of
  the VAC to recognize DuPonts contribution to
  value?
• Does our Direct Customer recognize (and
  acknowledge) the benefit/value our offering
  delivers to the End Customer? To his Customer? Is
  he capturing value for benefits/uniqueness of
  what we provide?
• What might we do to help our direct customers
  (and other VAC Players) be more successful?
• Do downstream customers have a reason to specify
  our product to our Direct Customer? Or to exert
  other pull-through influence? Do we have a means
  of explaining tos them the value of specifying DP
  inputs?

12
Workshop 3Brainstorming Ways DP might Gain
Influence

• Objective Broad early-stage thinking about
  possibilities for improving DPs Influence /
  Value Add / Value Capture in the VAC
• Output A prioritized list of possible
  strategies/actions that would improve DPs
  position
• Steps
• Designate Scribe
• Encourage open participation by all Team members
• Generate un-evaluate list of possibilities
• Review list and highlight those that seem most
  exciting and somewhat practical

13
Workshop 3Brainstorming Guidelines

• Everyone participates equally
• No criticism / evaluation of ideas during idea
  collection phase
• Dont be limited by practicality
• As ideas dwindle, take a new perspective on the
  problem
• Turn it upside down or inside out
• Paint it a new color or texture
• Think about it from POV of customer at each level
  of VAC
• Think about the most dreaded moves competitors
  might make and what they suggest you might do to
  preclude them
• Write everything down youll come back later to
  sort it all out
• Be sure to highlight your best ideas for easy
  reference later

14
Workshop 4 Trends Affecting your VAC

• Objective Identify trends affecting Industry
  and VAC that need to be considered in the
  Strategic Plan
• Output A prioritized list of relevant trends,
  ranked according to likelihood of occurrence and
  significance to the business
• Steps With reference to the Industry/VAC in
  which you plan to participate
• Have each Team member write relevant trends on
  Post-It notes, one per sheet. Capture as many as
  come to mind. (Be sure to reflect on VAC
  interviews youve conducted)
• Arrange Post-It notes on a 2x2 matrix
• Vertical Degree of Certainty, Lo to Hi
• Horizontal Impact on the business, Lo to Hi
• As a Team, confirm location of each trend
• Capture a list of trends remaining in upper
  right quadrant, starting in top right corner
• Highlight 3-5 that have greatest leverage on
  Project success

15
External Trend Analysis Map
High
Minimum Resources If Any
Must Plan For
DegreeofCertainty
Maintain Flexibility In Plan
Forget It
Low
High
Impact on Business
16
Prioritized List of TrendsIndustry/VAC
______________________

• Trends in order of Significance to our Project
• Trends working FOR us
• Trends working AGAINST us

17
Workshop 5Competitive Analysis

• Objective Determine how competitive activity or
  intentions might affect decisions about
  opportunities to influence VAC and extract value
• Output Completed Competitive Analysis
  Worksheets showing type of competitive activity
  present at each level of VAC
• Steps
• Fill in key VAC levels at top of Competitive
  Activity in VAC template provided
• On left, list companies that provide alternative
  solutions to DP inputs or services in subject VAC
  
• Characterize competitive activities at each
  level of the VAC
• Complete the Competitor Analysis Map (you may
  modify axis titles if others are of greater
  value)
• Complete Competitor Analysis Worksheet for 2-3
  key levels of VAC, focusing on last 4 columns
• Consider the thought expansion questions

18
Competitive Activity in the VAC

• First Question
• What have your VAC explorations told you about
  the nature and strength of activity by key
  competitors at each level of the VAC?
• Valuable for understanding competitive strategy
• Valuable for knowing what youre up against in
  marketing at each level of the VAC

19
Competitive Activity in the VAC
Level of VAC
M A R K E T
Key Competitor Activity at this Level of VAC Activity at this Level of VAC Activity at this Level of VAC Activity at this Level of VAC





Highlight Boxes where Activity is Strong/Effective
20
Competitor Analysis

• Assess each competitors
• Strategic thrust
• Capabilities/limitations
• Likely outcomes (if they succeed with their
  strategic thrust)
• Impact on us
• Customers/markets on which they focus
• Recent initiatives to better serve customers

21
Competitor Analysis Elements

• Capabilities/Limitations
• Business resolve/commitment
• Market/Customer focus
• Offering match
• Amount of synergy
• Degree of mobility
• Access to resources
• Interface competency
• eBusiness capability
• Threats/Opportunities
• Threats to your business
• Opportunities for your business

• Marketplace Behavior
• Competitor intentions related to
• Choices of markets/customers
• Customer interface approach
• Resource commitment
• Interaction with target markets
• Likely Outcomes
• Strategic thrust vs. strengths/weaknesses
• Impact of external forces

22
Competitor Analysis Map
Broad
Scope of Customers Participation
Narrow
Commodity
Differentiated
Type of Offering
23
Competitor Analysis Worksheet
Level of VAC__________________________
Impact on Us
Likely Outcomes
Capabilities Limitations

Vol.
Rev
Share
Prods/Srvcs
Strategic Thrusts
Competitor
1
2
3
4
5
6
7
8 DuPont

24
Competitor Analysis Worksheet
Level of VAC__________________________
Impact on Us
Likely Outcomes
Capabilities Limitations

Vol.
Rev
Share
Prods/Srvcs
Strategic Thrusts
Competitor
1
2
3
4
5
6
7
8 DuPont

25
Competitor Analysis Worksheet
Level of VAC__________________________
Impact on Us
Likely Outcomes
Capabilities Limitations

Vol.
Rev
Share
Prods/Srvcs
Strategic Thrusts
Competitor
1
2
3
4
5
6
7
8 DuPont

26
Strategic Thrust

• Based on observations of competitive activities,
  
• what seems to be each companys strategic
  thrust in
• this market?
• Thought starters
• Aggressively invest, grow
• Maintain
• Defend at all costs
• Respond aggressively to competition
• Harvest or exit

• Develop
• Penetrate
• Gain share on price
• Exit

27
Competitor Analysis Questions to Expand Your
Thinking

• How satisfied is each competitor with its
  position?
• What are their likely moves?
• What are the implications for the industry and
  your business?
• What are they doing to better meet customer
  needs?
• Competitive Threats
• New Entrants?
• What are the incentives to enter this market?
• What are the Barriers to Entry?
• Substitute Products?
• What can you do to deter new entrants?
• What competitive moves would have most serious
  impact on our business? Which competitor is most
  likely to adopt that strategy?

28
Workshop 6Customer Analysis

• Objective Understand customer needs and buying
  behavior at 2-4 levels of the VAC
• Output Draft Customer Analysis Worksheets for
  2-4 levels of VAC
• Steps
• Select 2-4 levels of the VAC that you feel might
  offer opportunity to influence input decisions
• Write those VAC functions across the top of the
  Customer Analysis worksheet.
• Working on one level of the VAC at a time, use
  the template to summarize what you know about
  CSFs, Needs, and Sources of Competitive Advantage
  from your VAC explorations to date.
• At each level, take a few moments to note
  possible ways DuPont could gain leverage on input
  decision making.

29
Customer Analysis Worksheet(Capturing Whats
Important to Players at key levels of VAC)
Level of VAC
M A R K E T
CriticalSuccessFactors
Values
Sources of Competitive Advantage
of DP Focus
Ways to Influence
CSFs MUST achieve for their business to
prosper VALUES Things they care deeply
about SOURCES OF COMP. ADVANTAGE How they WIN
vs. competitors
30
Workshop 7Marketing Effort Future State
Allocation

• Objective Allocate future marketing efforts
  along the VAC in accordance with VAC dynamics and
  opportunities to favorably influence use of DP
  products and services.
• Output A list of VAC functions/players/influence
  rs with corresponding percentages for future
  marketing emphasis and preliminary thinking about
  appropriate types of marketing effort.
• Steps
• Insert VAC players/functions in the table
  provided. Remember not to overlook influencers
• Allocate 100 of marketing effort (all types) to
  the various points on the VAC where opportunity
  to influence exists
• Begin characterizing the types of marketing
  effort most suitable for each place where
  marketing effort has been allocated.

31
Workshop 7 Marketing Emphasis Future State
Level of VAC of DP Mktg Effort Current Future Types of Mktg Activity






32
Understand the Market Conclusion Level of VAC
for Primary Marketing Emphasis

• Project Title ____________________
• Team Leader __________________
• Team Members ____________________________________
  __________________________________________________
  __________________________________________________
  _________________
• Industry / Market ______________________________
• LEVEL OF VAC chosen for Mktg Emphasis_____________
  ___
• Three key reasons why this level has been chosen
• __________________________________________________
  
• __________________________________________________
  
• __________________________________________________
  

33
Marketing Insight for Improved Results

• Information is a source of business improvement
• VOC data to guide customer-focused strategic
  planning actions
• Marketing Research to make better business
  decisions
• Competitive info to better anticipate competitive
  responses
• A formalized approach to knowing the
  marketplace
• Market sensing to anticipate the future
• Customer database management to support customer
  care and retention
• A formalized approach to sharing information
  among members of the Business Team

34
Workshop 8Path Forward to Complete Understand
Market

• Objective Leave Session 2 with clear plan for
  what has to be done to complete Understand the
  Market module
• Output A list of PF items, with
  responsibilities and completion dates
• Steps
• Complete the Path Forward template, paying
  special attention to unresolved questions or
  need-to-confirm information from Session 2
  Workshops
• As a Team, determine whether you can
  confidently select a level of the VAC for special
  marketing emphasis for your Project to be
  successfuland make that selection
• -- If youre not yet comfortable making this key
  decision, make specific plans to reconvene the
  Team when the additional info required will be
  available. This decision must be made so that
  customers at the targeted level can be
  interviewed prior to Session III (Segmentation,
  Targeting and Positioning)
• Time 45 Mins

RECONVENE AT
35
Path Forward to Complete Understand the
MktIndustry/VAC _____________________
Item for Action Due By Deliver To Person Accountable








36
Marketing Research Issues
Project Title_______________________________
Question to be Researched/Decision to be made Expected approach to gathering the data Person resp. due date




37
Understand the Market ConclusionSelected Level
of VAC for Marketing Emphasis

• Project Title ____________________
• Team Leader __________________
• Team Members ____________________________________
  __________________________________________________
  __________________________________________________
  _________________
• Industry / Market ______________________________
• LEVEL OF VAC chosen for Mktg Emphasis_____________
  ___
• Three key reasons why this level has been chosen
• __________________________________________________
  
• __________________________________________________
  
• __________________________________________________
  

38
Pre-work for Segmentation Target Workshop

• To prepare for the next workshop in the Marketing
  Competency Development series, your Team must
• Arrange and conduct VOC interviews with customers
  at the selected level(s) of the VAC.
• At least six companies
• High share. medium share, low share
• At least two members of the Buying Center at each
  company
• In-person interviews preferred
• Two Team members per interview
• Explore relative perceptions of competitive
  offerings
• Explore CSFs, needs, values, sources of
  competitive advantage
• Summarize the knowledge acquired in these
  interviews and share with all Project Team
  members
• Create a draft (preliminary) of criteria the
  would make a segment
• Attractive for a marketer to pursue
• One where DuPont can compete effectively