02 - The process of exchange I – Business models and value creation

Question 1

What are the traditional distinction between service and goods marketing?

Answer 1

heterogeneity, intangibility, perishability

Intangibility means that a service cannot be seen, touched, tasted, or smelled.
Perishability means unused service capacity of one time period cannot be stored for future use.
Heterogeneity is variation in service quality

Question 2

What is the main distinction according to the Service logic

Answer 2

value is co-created in an interactive(production-consumption) process

Question 3

What are the 5 drivers of service logic?

Answer 3

GLOBALIZED COMPETITION AND QUALITY STANDARDS

THE FOCUS ON RELATIONSHIPS AND CUSTOMER LOYALTY-

THE REALIZATION THAT GOODS ARE TRANSMITTERS OF SERVICES-

THE DOMINANCE OF THE SERVICE AND EXPERIENCE ECONOMY

TECHNOLOGY: 5G, SOCIAL MEDIA, AI, DISTRIBUTED DESIGN & PRODUCTION

Question 4

The dominance of service and experience economy

Answer 4

The dominance of the service and experience economy: In today’s economy, the value of experiences and services is increasingly important to consumers. Companies need to focus on delivering high-quality experiences that create value for the customer, as opposed to just selling products. This requires developing a deep understanding of customer needs and preferences and delivering personalized services that meet those needs.

Question 5

Technology

Answer 5

Technology: Technology has transformed the service industry in many ways, from online ordering and customer service to automated processes and artificial intelligence. Grönroos argues that companies need to embrace technology as a tool for delivering high-quality services and creating value for customers. However, companies must also balance technology with human interaction and the personal touch that is often essential to delivering high-quality services.

Question 6

The realization that goods are transmitters of services

Answer 6

The realization that goods are transmitters of services: Grönroos argues that in the service economy, goods are often just carriers or transmitters of services. This means that the value of the product is largely determined by the service that is associated with it, such as product support, warranties, or other related services. Therefore, companies need to focus on delivering high-quality services to complement their products to create customer value.

Question 7

The focus on relationship and customer loyalty

Answer 7

The focus on relationships and customer loyalty: Grönroos’ service marketing framework emphasizes the importance of building and maintaining relationships with customers over time. This involves developing a deep understanding of customer needs and preferences and delivering personalized services that create value for them. In today’s competitive environment, building strong relationships with customers is crucial for building customer loyalty and retention.

Question 8

How is Service Value social? based on Grönroos

Answer 8

“the consumer influence on the service offering is twofold. The consumer himself takes part in the production process and, consequently, has an impact on what he gets in return. On the other hand, the other customers simultaneously buying or consuming a service also influence the service offering….” (GRÖNROOS)

Question 9

What is Good logic?

Answer 9

Goods are embedded with utility (value) during manufacturing

Goods are standardized, produced away from the market, and inventoried till demanded

The dyadic transaction as the smallest unit of analysis

Question 10

GLOBALIZED COMPETITION AND QUALITY STANDARDS

Answer 10

Globalized competition and quality standards: Globalization has created increased competition in many industries, which has forced companies to focus on quality standards to differentiate themselves. In Grönroos’ service marketing framework, this relates to the need to focus on service quality and customer value to create a competitive advantage.

Question 11

What is Service Logic?

Answer 11

Goods are vehicles for service delivery. Value is co-created

Involves customers in developing value propositions to meet specific needs

The impact of multiple interactions in a network of customers, marketers, other stakeholders, and automatized agents

Question 12

What are the implications of the service logic for marketing research and theory?

Answer 12

Buyer Behaviour (B2B & B2C markets) –Increased focus on usage/consumption and networks

Seller behavior (Open innovation/crowd sourcing, Customer created content, Social influencers)

Institutions (decreased focus on intermediaries, increased focus on: CSR, multiplication of seller-customer touchpoints)

Societal consequences (the circular economy, the co-creation of public services)

Question 13

What is the function of marketing according to the service logic?

Answer 13

Marketing is performed in separate functions, involving the development of value propositions and specialist activities such as advertising and market research, and interactive functions resulting in value co-production and involving other staff members.

Question 14

Explain the service logic and relationship marketing

Answer 14

Customer keeping elements
o People
o Processes
o Pro-active customer service

Customer winning elements
o Product
o Price
o Promotion
o Place

These two are the elements of relationship marketing

Question 15

Give a short resume of the article: TEECEET AL (2010): “FIGURING OUT HOW TO DELIVER VALUE TO THE CUSTOMER AND TO CAPTURE VALUE WHILE DOING SO”

Answer 15

About business models

Business models should be regularly reviewed and adapted in response to changes in the marketplace and shifting customer demands.

Question 16

What are the key findings of the article: TEECEET AL (2010): “FIGURING OUT HOW TO DELIVER VALUE TO THE CUSTOMER AND TO CAPTURE VALUE WHILE DOING SO”

Answer 16

1. Understanding customer needs: Companies must understand the needs and wants of their customers in order to create products and services that meet those needs and deliver value.
2. Unique value proposition: Companies must create unique value propositions and differentiate themselves from their competitors in order to deliver value to customers.
3. Capturing value: Firms must be able to capture value in return for the value they deliver to customers, such as through pricing strategies or through the creation of intellectual property.
4. Balancing delivery and capture of value: Companies must balance the delivery of value to customers and the capture of value for the firm in order to achieve long-term success.
5. Importance of value creation and capture: The article highlights the importance of delivering value to customers and capturing value in return for the success and sustainability of a business.

Question 17

Explain the 3 steps of business model development:

Answer 17

1. Define job to be done: customer value
2. Describe how to do it: profit model, resources, processes
3. Compare to old model (if any)- Which competences, resources and processes must be acquired/developed?

Question 18

What are the Core of a business model?

Answer 18

Value creation
Exchange

Question 19

What are the fuel of a business model?

Answer 19

Profit
Resources
Processes (innovation, design, production, distribution, marketing)

Question 20

Explain the Rolls Royce case

Answer 20

The article is about the struggles of the British company, Rolls Royce, as a high-flier in the aerospace industry. The company is facing challenges as a lone player in the industry, with limited resources and a lack of support from other companies. The article argues that Rolls Royce needs to develop a strategic plan to address these challenges and maintain its position as a leading player in the aerospace industry.

R&R CASE – Value creation and business model for Rolls Royce commercial aircraft engine division
* Product logic: Produce engines were the first business model
* Service logic: Then they started to make some service on the engines – huge revenue potential. They could monitor when the flights should have some service. It is important to keep engines running.

The “Make it, Sell it, Service it” section of the article focuses on the three key elements that Rolls Royce must focus on to succeed in the aerospace industry. The first element is making the product, which requires the company to maintain a strong manufacturing capability and stay ahead of competitors in terms of technology and innovation. The second element is selling the product, which requires effective marketing and sales strategies to reach customers and drive demand. The final element is servicing the product, which involves providing ongoing maintenance and support to customers throughout the life of the product. By focusing on these three key elements, Rolls Royce can ensure its continued success in the aerospace industry.

Question 21

What are the main points of service logic and business modelling lecture?

Answer 21

The service logic is dominant

Value is co-created by customers and marketers

Marketing should be seen as a companywide activity

Value co-creation and exchange facilitation is the core of a business model

Profit models, ressources and processes is the fuel of business models……

Question 22

What are the 6 elements of business model design for value creation?

Answer 22

Question 23

Explain the core and fuel of a business model

Answer 23

Question 24

Name the steps to achieve sustainable business models:

Answer 24