Customer Focus article: “Customer-Centered Brand Management” by Rust, Zeithaml, and Lemon

Brand management still trumps customer management in most large companies because it is seen as growth stimulant. When brand management is emphasized within the scope of customer service, the large corporate goal of growing customer equity is gained. Customer equity is focus of any successful brand because it no longer becomes about the brand but rather making the brand what the customer wants. Customer equity is defined as “the sum of the lifetime value of all the firm’s customers, across all the firm’s brands.” The value of the brand ultimately depends on the customers opinion of the brand or equity in the brand. The authors give ways to craft customer focus in the branding:

  1. Make brand decisions subservient to decisions about customer relationships.
  2. Build brands around customer segments, not the other way around.
  3. Make your brands as narrow as possible
  4. Plan brand extensions based on customer needs, not component similarity
  5. Develop the capability and the mind-set to hand off customers to other brands in the company.

When building customer equity, building brand equity is an important event in sequence to the process. By overcoming the blind spots in the brand management,  executives can deliberately form customer point of views that elevate the importance of the customer in the brand development.

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Decision/ Intuition article:“Decision Making: going forward in reverse” by Einhorn and Hogarth

To understand thinking forward, an understanding of thinking backward is important. Thinking backward involves looking for patterns, making links, testing possibilities, and finding metaphors or theories. Thinking forward is not intuition based but depends on making predictions based on variables and mathematical formulations.  The authors suggest that many think backwards but there is a better way to thinking backwards. They give several approaches to improve thinking, which include the following: use several metaphors to experiment with, do not rely on one cue alone, sometimes go against the cues, assess causal chains, generate and test alternative explanations. When thinking forward, the authors give the following advice about following physiologically tested models : models make errors, models are static, and models are not worth their cost. Einhorn and Hogarth describe the two forms of thinking (backwards and forwards), and find that the two modes are not two dependant forms of decision making but interdependent. By putting the two modes of thinking as in interdependent form of decision making, allows managers and executives to make decisions with the best form of intuition and understanding.

“The Man vs. The Machine” by Charles Krauthammer (CH 6)

In this chapter, the biases and limitations of human judgment are addressed and revealed as a cognitive advantage in strategic thinking and decision making. In the article, “The Man vs. The Machine,” Krauthammer addresses the consistency of calculations done by a machine but the advantage of the human brain in calculating emotion and judgments. He gave an example of a chess game where the computer can seem to out smart the human when playing because one error made by the human is exploited by the computers knowledge of perfect calculations. The human wins when they practice the method of imagination and emotion. The computer can not get embarrassed or experience excitement therefore human can outsmart the computer regardless of the fact the computer can out calculate the machines. The point of this article was to emphasis the fact that the key to strategic thinking and success lays inside the strategist’s head and emotion/ imagination.

“Strategic Thinking as ‘Seeing’” By Henry Mintzberg (CH5)

In this chapter of Strategy Bites Back, the articles focused on how strategy is colorful, visual, and can be see as a picture or diagram. In the article “Strategic Thinking as ‘Seeing,’” Mintzberg describes strategy, not as a recipe, but rather as forms of seeing. Strategic thinking requires …

-Seeing ahead,

-Seeing behind: roots in the past,

-Seeing above: the big picture,

– Seeing below: supports,

-Seeing beside: creative and lateral,

-Seeing beyond: expected futures,

-Seeing through: consequences of the vision.

Although there is not a recipe for strategic thinking according to Mintzberg, Seeing is crucial to the formation of the strategic thinking process.

Growth Article: Breaking Compromises, Breakaway Growth By George Stalk Jr.; David Pecaut; Benjamin Burnett

The authors of this article attempt to capture the importance of breaking compromises that many businesses hold that hinders the business from experiencing growth. Compromise is not a trade-off but rather a concession demanded of consumers by all or most service or product providers. Compromises can seem hidden and offer no particular segment. Compromises exist when an industry imposes its operating practices or constraints on customers leaving them no choices. This leaves the customers needs on the back burner therefore if compromises are broken, breakaway growth for the industry as a whole could arise!  The new or revealed demand that is unleashed from breaking down the compromises is a breakthrough strategy! Circuit City’s new concept of CarMax broke down compromises in the car industry and found growth and demand by meeting the needs of the customers.

The article concludes in looking at who growth strategies could be built primarily around breaking compromises within an industry. Many times the compromises that are made can easily be redefined in order to unleash a new found demand for the product of service in a saturated market.

Leadership Article: Timeless Leadership By Bronwyn Fryer

Fryer writes of his interview or conversation with David McCullough about leadership. Throughout the article, McCullough states that great leadership lessons have not changed over time and stay consistent throughout history. Leadership is necessary in all fields of study or industry as McCullough claims in his conversation. History has shown that the demands of leaders may change from era to era and from one culture to another but the leadership continues to be of great importance.

A key to leadership potential is spotting talent  and seeing how the individual responds to failure. McCullough likes to quote a military historian who said that three qualities are important to a leaders: “Know your stuff, be a man, look after your men.” McCullough said that he uses this quote because it captures the essence of leadership because expertise is important but analyzing the problem and learning by doing is most important.

Truman was an ideal leader in McCullough’s mind and he wrote a book about his practices. Truman understood human behavior which is necessary in leading people in a direction of growth and prosperity- people skills is a must! He said the best way to learn the Trumanesque kind of leadership is to listen! Listening followed by applied learning develops useful skill in leadership.

Lastly, McCullough emphasized the importance of mentors in the development of leadership skills. He named three different mentors that he looked up to as successful leaders.

Fryer captures McCullough’s advise about developing leadership that will stand the test of time.

CH 4: The Soft Underbelly of Hard Data By Henry Mintzberg

Mintzberg begs marketers and managers to consider the value of soft data over the many times favored hard data. Hard data is documented, qualified and structured. Soft data can be seen as vague, unstructured and subject to the options of others. Mintzberg outlines the problems with hard information and promotes soft information in the following points:

1. Hard information is often limited in scope, lacking richness.

–          Soft information on the other hand offers a personal system of information from the customer himself. For example, a single disgruntled customer can sometimes be worth more than a big marketing research report—in understanding customer needs.

2. Much hard information is too aggregated to be of effective use in strategy making.

–          Many things are lost in the process of gather hard data – often the essence of the information. Perhaps studying the conditions, terrain, environment, etc. would help to reveal more information in a clear and concise direction.

3. Much hard information arrives too late to be use in strategy making.

–          Change is inevitable and information becomes dated quickly; therefore hard data is many times recorded and reported when it is no longer useful.

4.Finally, a surprising amount of hard information is unreliable.

–          Although soft information is seen as unreliable due to subjective biases of individuals, hard data is not always transmitted and stored accurately or how it was thought to be relayed.

After Mintzberg defends soft data as a useful source of information, he concludes his article to say that the best information is gained by the use of both hard and soft data. When both are used, rich and meaningful information is gathered and can be examined for best practices.

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