L2, Basics in BMP

Question 1

What are the two main approaches to marketing?

Answer 1

1. the marketing mix approach

2. the interaction approach

Question 2

name some central points of departure with regards to marketing

Answer 2

Providing value to customers is a cornerstone to success in marketing

1. 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
2. Requirements on sellers’ offerings
   —> the offering must be perceived by the buyers suitable solution to the needs/problms/opportunities

Question 3

what is meant by “the selling company as a problem solver”?

Answer 3

The value for the buying company is the solution the their problem which is offered by the selling company

Question 4

Name some central questions for matching problem and offering into a solution?

Answer 4

1. why purchases the customer?

2. what purchases the costumer?

Question 5

name some core business processes

Answer 5

1. the value creation

2. the value chain

Question 6

who are in the value chain=

Answer 6

—> suppliers
—> other partners
—> customers

Question 7

how do we create value?

Answer 7

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

Question 8

what is meant by evaluation of offerings?

Answer 8

1. solutions demanded are those where benefits outweigh costs
2. there are no objective evaluations - actors behave in accordance with their perceptions

Question 9

describe the fundamental value equation

Answer 9

value1-price1> value2-price2

Question 10

what differentiates perspectives are there on value?

Answer 10

1. strategic positioning
2. business models
3. customer relationships
4. shareholder value

Question 11

what is customer value propositions?

Answer 11

captures the particular set of benefits that a supplier offers to advance the performance of the customer organizations

Question 12

what does the customer value propositions include?

Answer 12

1. points of parity
   —> the value elements with essentially the same performance characteristics as the next best alternative
2. points of difference
   —> the value elements that render the supplier’s offering either superior or inferior to the next best alternative
3. points of contention
   —> when value elements identifier in the customer value research teams differ from customers opinion

Question 13

name 3 different “value propositions”(?!l)

Answer 13

1. All benefits
2. Favorable points-of-differ
3. resonating focus

Question 14

What does the value proposition”all benefits”

1. consist of?
2. how does it answer the customer question?
3. require?
4. what pitfalls does it have=

Answer 14

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

Question 15

What does the value proposition “Favorable points-of-difference”:

1. consist of?
2. how does it answer the customer question?
3. require?
4. what pitfalls does it have=

Answer 15

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

Question 16

What does the value proposition”Resonating focus”

1. consist of?
2. how does it answer the customer question?
3. require?
4. what pitfalls does it have?

Answer 16

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

Question 17

name two types of working relationships!

Answer 17

1. transactional relationships
   —> customer and supplier focus upon the timely exchange of basic products for highly competitive prices
2. 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

Question 18

What is the level of implications for sellers in transactional relationships vs collaborative?

Answer 18

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

Question 19

What happened during the paradigm shift in the 80ies?

Answer 19

1. empirical studies pinpointed that companies developed long-term business relationships
2. The close relationships have a huge impact on both technology and economical development
3. A research tradition is developed with the joint interest of understanding and explaining business relationships as a phenomena
4. changed view of rational market behavior and on the structure of markets (industrial networks)

Question 20

name some facts about interaction in networks?

Answer 20

The interaction between two companies affect and is affected by other relations in the network

Question 21

what is a network?

Answer 21

An industrial system of relationships between companies.

Question 22

Compare the marketing-mix approach and the interaction approach!

Answer 22

MARKETING-MIX APPROACH

1. average behaviour
2. many buyers
3. skew relation
4. low degree of returning cusotmers

INTERACTION APPROACH

1. unique cusotmers
2. few buy§ers
3. symmetric relation
4. high degree of returning customers

Question 23

Name some factors that affect a customer’s perception of value

Answer 23

1. length of customer lead times
2. variation from promised delivery dates
3. condition of the product on arrival
4. sales calls and order initiation requirements
5. credit, billling, collection procedures
6. after-sales support
7. product documentation and instructions
8. product performance
9. product downtime frequency and duration
10. maintenance cost and difficulty

Question 24

Risk with the definition of value?

Answer 24

1. The value is only estimated
2. The supplier might overestimate it
3. the customer might underestimate it

Question 25

what is a value analysis?

Answer 25

1. Conducted by a cross-functional team
2. The customer assess the the market offerings’ in form performance
3. calculate total cost
4. attempts to find lower cost alternatives

Question 26

What isa business process?

Answer 26

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

Question 27

What are the 4 fundamental guiding principles in business market management?

Answer 27

1. regard value as a cornerstone
2. focus on business management processes
3. stress doing business across boarders
4. accentuate working relationships and business networks

Question 28

what is value?

Answer 28

the monetary worth of all a market offering provides to a customer firm

Question 29

give two examples of alternative approaches to change their processes to provide better value?

Answer 29

1. Incremental process improvement

2. Radical process redesign