Presentation in Haaga-Helia 08042013 about the new marketing paradigm

Challenging Kotler’s 4 P’s with 4 (+3) E’s

The New Marketing Paradigm

Jussi Hirvelä, Luja GroupDirector of Marketing and Communications

8.4.2013

Haaga-Helia

Third Generation Family Enterprise- 60 Years of Experience

• Founder of Luja, Feliks Isotalo, came fromAlahärmä. With his Ostrobothnian ‘sisu’ –guts and perseverance – this formerfarmer, policeman and agricultural dealermade Lujabetoni he established in 1953grow into a successful business.

• Feliks Isotalo tried out courageous newideas and developed himself new productsand machinery. With his hard work andexample he created the Luja values,abiding by which the next generation hasexpanded Luja, making it one of thebiggest Finnish construction groups, ahighly competent Finnish familyenterprise.

1909-1988

3

Turnover MEUR 457Staff 1512

43 places of business

31 locations

Turnover 313 M€- New building- Reconstruction- Housing- Business premises

Turnover MEUR 18- Dry construction materials

Turnover 126 M€- Frames- Slabs- Façades- Agricultural elements- Precast concrete- Poles- Railway sleepers- Luja stone houses- Other concrete products

Affiliate- Precast concrete in Sweden

- Precast concrete in Russia

One of the BiggestConstruction Groups in Finland

Dother comp.

- Building company in Lahti

4

Luja Brand Hierarchy

It is nowadays verydifficult and expensiveto build brands. So, weuse one common Luja

umbrella brandwhenever it ispossible.

Brand

The Construction ofLuja Brand

How we look

What wesay

ServiceExperience

ProductExperience

”Promise” ”Delivery”

Luja Promises

So

cie

ty

Employees Customers

En

viro

nm

en

t

Brand is Luja’s Management Tool:Company interacts with stakeholders

through brand

StakeHolders

Staff

Communications

Quality

Strategy

Service

Production

Delivering thepromise

““To do BRANDING is not the goal To do BRANDING is not the goal —— to use BRANDING to create to use BRANDING to create

breakthroughs for the organization and the people it serves is the goal.breakthroughs for the organization and the people it serves is the goal.””

Leading Business Through Brand= Brand Directing

BrandDirecting

Staff Customers

StrategyTh

e em

plo

yees

hav

e to

und

erst

and

and

acce

pt the

str

ateg

yThe custom

er value capsu

led to the

strategy has to be com

municated to

customers

If the brand is the promise, employeesare the promise keepers.

Summa summarum:Brand in B2B -Business

A brand embodies the organizationA brand embodies the organization’’s promises promise

to consistently deliver a specific set ofto consistently deliver a specific set of

features, benefits and services to the buyer. Iffeatures, benefits and services to the buyer. If

the brand cannot influence choice and bringthe brand cannot influence choice and bring

differentiated experience, it is not a brand; it isdifferentiated experience, it is not a brand; it is

just a corporate identity.just a corporate identity.

BRAND = PROMISE + DELIVERY =TRUST & EXPERIENCE

BRAND = PROMISE + DELIVERY =TRUST & EXPERIENCE

“The Customer Experience isthe next competitivebattleground”

Jerry Gregoire, Dell Computers

Product Experience

The Marketing Mix Paradigm Shift4P -> 4E

“Customer experience is the sum of allinteractions between a customer and an

organization .

It is a blend of the organization’s physicalperformance, the senses stimulated and emotions

evoked, each measured against customerexpectations across all customer touchpoints.

All this is lead by brand promises”

The Definition of CustomerExperience

barely

acceptable

service

experience

No effect Normal level

Source: Experiential Marketing, Bernd H. Schmitt

How a better than average serviceexperience is affecting to customer

satisfaction and brand value

Increases customer

satisfaction

& brand value

Intolerable

service

experience

Good service

experience

Destroys customer

satisfaction

& brand value

Particularly

good service

experience

Priceless

service

experience

Not

acceptable

service

experience

5 steps to a ‘Branded Customer Experience’

l Achieve a superior understanding of what yourtargeted customers value

l Apply that understanding to shape a trulydifferentiated customer experience that will eclipsethe competition

l Make everyone a brand manager

l Make promises that you are sure your processescan exceed

l Measure and monitor. Anticipate what customerswill value to sustain consistency of delivery in thefuture

Source::[email protected]

Factors influencing on customer satisfaction..And where the focus is in construction industry

Customer

Constructor

Core Productsand Services

Emotional factors

Interaction

Support

Technical performance Functionalquality

Technicalquality

The quality ofrelationship

Customer Facings areCritical Experience Factors

Education for Customer

FacingSituations

Conversation

Smile Greeting

Asking

Adding Experience Factor Means MoreProfit

Paulig Frezza

Brand

Hesburger

Service

Porvoon

paahtimo

Experience

Pirkka Coffee

Commodity

25 snt 4.90 €

Experience Economy

Kahvipaketin ja kahvilassa ostetun kahvikupin reaalihintakehitys, 1994=100

Earnings model Price


ProductExperience

Making Money

You can’t make good profit withcommodities anymore in this transparent

economy. But by adding some differentiatedservice or experience to the product.

Sometimes you have to give your productsor services for free. But then you have to

figure out some other way to earn themoney. Think: Is there some hidden value in

your business that you can liquidate

Some examples of the new earnings model

”Turn key” Luja

Brick House - profit-% : ++

Luja concretebricks -

profit-% : --


Luja ready mix

concrete -profit-% : -

Luja ready mix

concrete in some exact time frame -

profit-% : +


Not selling Luja-bricks,

but speed and easiness

Some examples of the new earnings modelSome examples of the new earnings model

Not selling concrete

piles, but piling (with a

patented method)


Google searchengine and otherGoogle-software

are free for the users

Google gets the profit

by selling contactsand customer profiles

to companies

Digital media vs.. ”traditional” media

�A Typical Finnish consumerreceives more than 3000 separatecommercial messages every day

�People are nowadays more orless immune to advertising

�A Typical Finnish consumerreceives more than 3000 separatecommercial messages every day

�People are nowadays more orless immune to advertising

Place Easy to find


ProductExperience


Easy to Find - Good Findability

• How easily a particular product, brand or person hasbeen found by chance or through the application

process (in web mainly)

• Product and the information should be found in thecorrect places at the right time - right press, stores and

other media, and more and more real shopping placesonline.

• We have to know what kind of information ourcustomers are seeking to support their buying process?

Customer Experience

retail internetvoice

Browsing 54%additional information CC

56%

purchase 79%

AwarenessAd / wom /www 66%

Not only easy to find - but easyto buy as well

Developing the Visibility andFoundability of Luja in Web

Google

SEARCHENGINEOPTIMATEDOWN PAGES

PAID WITHMONEY

PAID WITHDOROSAL SKIN

EARNED BYACTION

Google AdWordsBanners

BlogsVideos, PicturesSocial Media Activity

World is transparent

www.luja.fi

www.lujatalo.fi

www.lujakoti.fi

www.lujabetoni.fi

www.lujakivitalo.fi

www.lujabetong.se

www.lujabeton.ru

www.fescon.fi

Luja WWW-pages

Developing the searchengine optimisation is a

continuous process!!

In a hyper transparent world, you arewhat you contributed… and Google

filters it for everyone

The most effective media today

67%

1977

95%

2007

The number of consumers (%) who think that the

recommendation of friends, relatives and opinion

leaders as a key factor in selecting a product

The importance of recommendations hasincreased as a set for purchase decision

Source:: Roper Trend Research 2008

Slide-share

Facebook

Youtube

Google+

Wordpress

Flickr

Own

pages

The Architecture of Social Media @ Luja

AdWords

Social media

The optimazionof own pages

Searching readymixes bygoogling

Liikenteen lähteenä Google / valmisbetoni

Companies are medias of own their own

Red Bull is turning from a energy drink

brand into a media brand

Content marketing is one of the hottesttrends in marketing at the moment

• Content marketing means the generation andtargeted distribution of unique content that isrelevant and valuable to the audience

• Quite often the value to the audience isentertainment

• By leveraging social media, marketers candistribute this content where they know theircustomers spend time online, driving resultsfor SEO, brand awareness, and the bottom line

The architecture of Lujakoti campaign

Radio advertising promoting campaign site

Banners at housing portals

Film was embedded to www.lujakoti.fi

Viralfunctionality

Facebook

Visits at Lujakoti-web site in thebeginning of the campaign

Recommending the campaign site

Came to site because of recommendations

The ”return-%” of recommendations

The viral effectin Lujakoti-campaign

During the first 11 days

Effectiveness

Action Impact factor

Reading text 1 x

Watching video 3 x

Clicking forward 4 x

Thumping up 4 x

Sharing a video 10 x

Embedding a video 20 x

Making a video 100 x

Source:: Randall Rothenberg, Now Media

Engaging customers is effective marketing

Engagement


ProductExperience


Place Easy to find

Promotion

The (or one of the..) new definition ofmarketing

Marketing is the adaptiveprocess by which firms

engage their customers andpartners to jointly create,

deliver, and sustain value forall stakeholders.

Marketing Rules are ChangingMarketing Rules are Changing

Giving for freeCharging for entry – block entry

EngagementInterruption

Return on involvementReturn on marketing investment

Engaging to build relationshipsPromotion for immediate action

One-to-manyMany-to-one

Interactive conversationOne way message

Pulling client to the messagePushing message to client

It’s nowIt was

Customer

Relationship

development

Ensuring

satisfaction

Clearing

needsNeeds

satisfaction

Co-innovating

Opinions

influencing

Engaging by CustomerRelationship Management

Customer co-innovation: Engaging Customersby Using them to Generate New Ideas

• As customers are more likely than ever to be“engineers” within a service process, it is essential toinvolve them in the innovation process.

• One example is a recent study by Per Kristenssonand Jonas Matthing from Telia. The purpose was toexamine whether ordinary customers, lead users, or“experts” are better at identifying and expressingneeds and developing new service ideas.

• Result: Ordinary customers are the best servicedevelopers.

Benefiting the Digital Environment in Designing,Launching and Marketing New Residential Area

www.espoonvetovoimaisinasuinalue.fi

www.facebook.comwww.youtube.com

www.blogger.comwww.myspace.com

Input Digital Communities and Channels Output

• Direct mail

• Ads

• Busses

• Articles

• Jokakoti-map

• Oikotie,

Etuovi

• Articles

• Discussions

• Community

• Engagement

• Opinions

• Idea testing

• Viral

• Marketing

New neighbourhood in Espoo. Engaging futureresidents by involving them into the planning .

83

107


Engagement

ProductExperience


Place Easy to find

Promotion

Employees,

Ethics & Environment

“To win in the marketplace

you must first win in the

workplace.”

Former Campbell’s Soup CEO, Doug Conant

Employee Engagement

– Employee engagement does not mean employee

happiness or satisfaction.

– Employee engagement is the emotional

commitment the employee has to the organizationand it’s goals.

– This emotional commitment means engagedemployees actually care about their work and their

company

– They work on behalf of the organization’s goals

– They do marketing on the behalf of the company

When employees care—when they areengaged—they use discretionary effort

• The can be even 50-100 times more productive

• Give 110%

• Go the extra mile

• Take personal responsibility/accountability

• Hold themselves to a higher standard

• Take pride in the quality of their work

• Feel that what they contribute matters to the

success of the organization

Engaging Luja-employees by going to funny

and extraordinary happenings with our ownspectacular team

Luja Dreamteam Tour 2013

• Snow Sculpturing FinnishChampionship, Kemi, 11. - 13.1.

• Extreme Run, Tahko, 13.4.

• Helsinki City Run, 4.5.

• Wife Carrying WorldChampionship (sonkajärvi, July)

• Swamp Football WorldChampionship, Hyrynsalmi, 19.-20.7

• Church Boat Championship, July

• Red Bull -hill carting, Helsinki,July

LUJATOUR 2013

The mission of every familybusiness is continuity. In orderto ensure the continuity, Luja

implements sustainablebusiness principles.

Ethics

• In this modern transparent world, it is increasingly

important for companies to deal with ethics as a

corporate strategy that, if uniquely implemented,

could achieve competitive advantage for the

company rather than waiting to react to possible

ethical issues of importance to the targeted

stakeholders.

• It is the necessity of being ethically proactivecompany rather than being ethically reactivecompany.

• Ethics is part of Luja’s business model

Ethics

• High business ethics generates brand value

and reputation by high standards of business

integrity and company social responsibility(CSR)

• Ethics in business is no longer an option. It is a

MUST.

• 92% of consumers surveyed said ethical issues

would influence on buying decisions

Luja Corporate Responsibility

• Luja ensures with continuous renewal and

development the sustainable competitiveness and

profitability

• Yearly investment of around 14 man-years on

development, focusing on sustainable

construction:

• Reduction of energy consumption, emissions

and waste volumes

• New products, projects and systems for

energy-efficient construction

• Luja has an active role in fighting against black

economy in the construction industry

• The safest working site in Finland 2012

• Luja supports ”The Children of the Station”-charity

association with quite a big sum every year

Environmental responsibility

• The need to succeed in "green race" forces

companies to invent new products, services,

earnings and business models in an

unprecedented way (Ecomagination)

• Greenery is also profitable in a business sense

(more efficient, with fewer raw materials and

energy - with more demand)

• Standards and green certificates shape the

competitive environment - without them one can

not succeed.

Taking care of environment is part of Luja’sethical business model

ENERGYEFFICIENCY

ECO EFFICIENCY

• Use of materials• Waste and emissions

• Other environmentaleffects

SUSTAINABLE CONSTRUCTION• Safety• Accessibility

• Functionality• Adaptability

• Consumption of natural resources?

• The value produced to

•companies

•consumers•society

The Levels of SustainableBusiness

Avoiding risks

The fulfilment of the

requirements of laws

and regulations?

Competitive

advantage

The first zero-energy high risein Finland

� In Kuopio

� Piloting site with VTT and Tekes

� For student accommodation

� Lots of new kind of technology

Sustainable brand is strenghteningwhen the words and deeds match

Competitive

advantage

Green

washing

Being a follower

weakens the brandSilent working doesn’t

increase the brand value

Sustainable

brand buildingThe volume ofresponsibility

communi-cations

The volume of

responsibility actions

Much

Much

Little

Little

SustainableCapitalism

means GoodBusiness

The Luja-framework for leadingsustainability with brand

STRATEGY

HISTORY &CULTURE

VALUES& ETHICS

PEOPLE &

ORGANISATION P

RODUCTS &

OFFERINGS

Corporateidentity

ResponsibleBrand Directing

The Effect onintellectual capital

RESPONSIBLE

BRAND DIRECTING

ACTION &BEHAVIOUR

VERBAL &VISUALIDENTITY

STAKEHOLDERDIALOG

BRAND &REPUTATION

HUMANCAPITAL

STRUCTURAL CAPITAL R

ELATIONSHIP CAPITAL

Responsibility as a starting point

SOCIALRESPONSIBILITY

ENVIRONMENTALRESPONSIBILITY

ECONOMICALRESPONSIBILITY

Questions andAnswers