marketing & customer value

7/31/2019 Marketing & Customer Value

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Traditional view of marketing is to produce the good orservice and then market the value.

But, this strategy works for the market where there are not

many substitutes. The contemporary idea is to create a value after identifying

the gap.

Segmentation, Targeting & Positioning (STP) takes centerstage for this activity.

Once the creation of value is determined, the next step is tocommunicate this value to the segment of customer.

Marketers today are in constant pursuit of this intrinsic,differentiated and specific value creation and delivery phase.


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Michael Porter of Harvard Business School proposed that everyfirm has five primary and four support activities as their ValueChain:

Primary Activities:

Inbound Logistics Operations

Outbound Logistics

Sales & Marketing

Service

Support Activities: Procurement

Technology

Human Resource

Infrastructure


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Success of a firm depends on how well it manages the core

business processes.

Market-sensing Process This is to identify the market intelligence

and disseminate it within the organisation. New-offering Realisation Process This is to research, develop and

launch new high-quality offerings fast.

Customer Acquisition Process This is to define target markets and

prospect new customers.

Customer Relationship Process This is to build deeper

understanding, relationships and offerings to customers.

Fulfillment Management Process This is to receive and approve

orders, ship the goods on time and collect the payment.


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Traditionally, companies owned and controlled many

resources labor, materials, machines, information, energy.

Most of these resources, activities or services are being

outsourced to reduce cost and bring in expertise.

The key is to own and nurture the resources and

competencies that make up the essence of the business.

A core competence has three characteristics:

It is a competitive advantage to bring home significant contribution

It has its application in a wide variety of markets as an extrapolation

It is difficult for competitors to imitate or build


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Finding new value opportunities is about understanding the

relationships among three spaces:

The customers cognitive space:

This reflects the existing and latent needs of the customer in terms of

customers willingness to participate.

The companys competence space:

This reflects the physical and knowledge-based capabilities of the

company such as innovation, unique features etc. The collaborators resource space:

This refers to the vertical and horizontal partnerships with suppliers

and complimentary service providers.


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These skills for marketers include identifying

new customer benefits from the customers view

utilizing core competencies from its business domain

managing business partners from its collaborative networks

To create new customer benefits, marketers must understand

what the customer thinks

what the customer wants

what the customer worries about

The factors which affect or influence the decision making

process of the customers is a critical decision attribute.


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Delivering value often means making substantial investmentsin infrastructure and capabilities.

The company must become proficient at customer

relationships, internal resources and business partnerships. Customer relationships allow the company to discover who

its customers are, how they behave and what they want.

It also enables the company to respond appropriately,coherently and quickly to customer opportunities.

To respond quickly and effectively, the company requiresinternal resource management.

Business partnership management allows the company tohandle complex relationships to source, process and deliver.


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Corporate headquarters undertake four planning activities:

Defining the corporate vision and mission

Establishing strategic business units

Aligning resources to each SBU

Assessing growth opportunities


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Peter Druckers classic questions answer the vision andmission of the company.

What is our business?

Who is our customer? What is of value to the customer?

What will our business be?

These are simple questions yet very difficult to be answeredat any point of time.

These statements are shared with the employees, suppliersand customer.

These statements provide a deep sense of shared purpose,direction and opportunity.


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A target market definition tends to focus on selling a productor a service to a current market.

A strategic market definition focuses on potential markets

with the possibility of various products or services. Large companies normally manage quite different

businesses, each requiring its own strategy.

An SBU is a single business or collection of related businessesthat are planned separately from rest of the product group.

It has its own set of competitors, nuances, rules, economicsand capabilities.

The SBU head has the role of managing all such planning andprofit performance.


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BCG Matrix:


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It includes planning new businesses, downsizing andterminating older businesses.

In this scenario, the organisation reviews the opportunities

for improving existing businesses. Market-penetration Strategy:

current products for current markets

Market-development Strategy:

current products for new markets

Product-development Strategy:

new products for current markets

Diversification Strategy:

new products for new markets


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Innovation is the single most critical differentiator in acluttered market of products and services.

It can help the company scale new heights when bring in a

solution which touches the lives of the customer. Of course, more of them declare this and yet to realise the

importance of doing this.

This also grows and gets nurtured in an organisation where itis adopted as the part of the culture.

This is not an accident, but a conscious and rigorous choiceto pursue excellence.

This is going to become the significant difference betweenthe good and the great.


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External Environment (Opportunity & Threat)

macro-environment and micro-environment

opportunity for marketing to create categories converging industry trends and hybrid products or services

convenience and efficient models to buy and sell

customization or personalisation in offerings

interactive platforms to co-create value

speed is one of the key attributes as innovation

low-cost products or services


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Internal Environment (Strengths & Weaknesses)

strength - the intrinsic value of being good at something

position of advantage to do something, nobody else can match to leverage such points for market leadership

it may be people, innovation, skills, capital etc.

weakness something which is lacking

this may become the biggest barrier to grow

this may become the difference between the leading and lagging

it may be capability, scale, innovation, culture etc.

marketing & customer value

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