L2, Basics in BMP Flashcards
What are the two main approaches to marketing?
- the marketing mix approach
2. the interaction approach
name some central points of departure with regards to marketing
Providing value to customers is a cornerstone to success in marketing
- A seller’s focus must be on the buyer
—> buyers have a lot of needs, problems, unrealized opportunities that may be the targets for supplier assistance - Requirements on sellers’ offerings
—> the offering must be perceived by the buyers suitable solution to the needs/problms/opportunities
what is meant by “the selling company as a problem solver”?
The value for the buying company is the solution the their problem which is offered by the selling company
Name some central questions for matching problem and offering into a solution?
- why purchases the customer?
2. what purchases the costumer?
name some core business processes
- the value creation
2. the value chain
who are in the value chain=
—> suppliers
—> other partners
—> customers
how do we create value?
1. product development management —> involving customers earlier in the PDM —> 2. supply chain management 3. customer relationship management —> value-based sales tools —> creating business expectations —> increase the number of profitable customers —> monitoring competitors
what is meant by evaluation of offerings?
- solutions demanded are those where benefits outweigh costs
- there are no objective evaluations - actors behave in accordance with their perceptions
describe the fundamental value equation
value1-price1> value2-price2
what differentiates perspectives are there on value?
- strategic positioning
- business models
- customer relationships
- shareholder value
what is customer value propositions?
captures the particular set of benefits that a supplier offers to advance the performance of the customer organizations
what does the customer value propositions include?
- points of parity
—> the value elements with essentially the same performance characteristics as the next best alternative - points of difference
—> the value elements that render the supplier’s offering either superior or inferior to the next best alternative - points of contention
—> when value elements identifier in the customer value research teams differ from customers opinion
name 3 different “value propositions”(?!l)
- All benefits
- Favorable points-of-differ
- resonating focus
What does the value proposition”all benefits”
- consist of?
- how does it answer the customer question?
- require?
- what pitfalls does it have=
CONSISTS OF:
All benefits customers receive from a market offering
ANSWERS THE CUSTOMER QUESTION:
“why should our firm purchase your offering?”
REQUIRES:
knowledge of own market offering
POTENTIAL PITFALL:
benefit assertion
What does the value proposition “Favorable points-of-difference”:
- consist of?
- how does it answer the customer question?
- require?
- what pitfalls does it have=
CONSISTS OF:
all favorable points-of-difference a market offering has relative to the next-best alternatives
ANSWERS THE CUSTOMER QUESTION:
“why should out firm purchase your offering instead of your competitor?”
REQUIRES:
Knowledge of own market offering and next best alternative offering
POTENTIAL PITFALL:
value presumption
What does the value proposition”Resonating focus”
- consist of?
- how does it answer the customer question?
- require?
- what pitfalls does it have?
CONSISTS OF:
The one or two points-of-difference (and perhaps a point-of- parity) whose improvement will deliver the greatest value to the customer for the foreseeable future
ANSWERS THE CUSTOMER QUESTION:
“what is the most worthwhile for our firm to keep in mind about your offering”
REQUIRES:
knowledge about own market offering delivers superior value to customers, compared to next-best-alternative offering
POTENTIAL PITFALL:
Requires customer value research
name two types of working relationships!
- transactional relationships
—> customer and supplier focus upon the timely exchange of basic products for highly competitive prices - collaborative relationships
—> achieved through partnering. customer from and supplier firm form a strong and extensive social, economic, service and technical ties. Mutual goals: lowering total costs/ or increasing value
What is the level of implications for sellers in transactional relationships vs collaborative?
TRANSACTIONAL RELATIONSHIPS
1. little attention to individual customers
2. the aggregation - the market - is in focus
3. relations to customers are arm-length
§
COLLABORATIVE RELATIONSHIPS
1. focus on individual business partners
2. promote long-term and close relationships
What happened during the paradigm shift in the 80ies?
- empirical studies pinpointed that companies developed long-term business relationships
- The close relationships have a huge impact on both technology and economical development
- A research tradition is developed with the joint interest of understanding and explaining business relationships as a phenomena
- changed view of rational market behavior and on the structure of markets (industrial networks)
name some facts about interaction in networks?
The interaction between two companies affect and is affected by other relations in the network
what is a network?
An industrial system of relationships between companies.
Compare the marketing-mix approach and the interaction approach!
MARKETING-MIX APPROACH
- average behaviour
- many buyers
- skew relation
- low degree of returning cusotmers
INTERACTION APPROACH
- unique cusotmers
- few buy§ers
- symmetric relation
- high degree of returning customers
Name some factors that affect a customer’s perception of value
- length of customer lead times
- variation from promised delivery dates
- condition of the product on arrival
- sales calls and order initiation requirements
- credit, billling, collection procedures
- after-sales support
- product documentation and instructions
- product performance
- product downtime frequency and duration
- maintenance cost and difficulty
Risk with the definition of value?
- The value is only estimated
- The supplier might overestimate it
- the customer might underestimate it
what is a value analysis?
- Conducted by a cross-functional team
- The customer assess the the market offerings’ in form performance
- calculate total cost
- attempts to find lower cost alternatives
What isa business process?
A collection of activities that takes one or more input and creates an output that is of value for the customer
—> focus on reengineering efforts
What are the 4 fundamental guiding principles in business market management?
- regard value as a cornerstone
- focus on business management processes
- stress doing business across boarders
- accentuate working relationships and business networks
what is value?
the monetary worth of all a market offering provides to a customer firm
give two examples of alternative approaches to change their processes to provide better value?
- Incremental process improvement
2. Radical process redesign
