2.Strategic Marketing & Planning-CUSTOMER VALUE[1]

CP-103 : MARKETING MANAGEMENT Objectives: The purpose of this course is to develop an understanding of the basic concepts of Marketing and acquire marketing operation related skills for products and services. Course outline: 1.Marketing Concept, Role of Marketing in Corporate & Society; Marketing Environment. 2. Market mix, Strategic marketing planning 3. Market Segmentation, Selection Target setting, Positioning 4. Market Measurement and forecasting, Marketing Research and Information System. 5. Meaning and Importance of Buyer Behaviour, Determinants and consumer Behaviour 6. Buying Decision Process, Industrial Buyer Behaviour 7. Product Life Cycle; Product Mix Strategies 8. Branding and Packing Decision; New Product Development; Consumer Adoption Process. 9. Pricing Objectives; Price Determinants; Pricing Methods. 10. Pricing Policies and Strategies. 11. Nature and importance of Distribution channels; Patterns of Distribution Channels, 12. Determinants of Channels Design; Determining Intensity of Distribution 13. Selecting Motivating and Evaluating Channel Members, Physical Distribution Task and Approaches. 14. Marketing communication Process, Promotion Mix and its Determinants 15. Role of Advertising, Sales Promotion and Personal Selling; Promotion Budget. 16. Contemporary Issues; Direct Marketing, Marketing of Services, Marketing Research, 17. Sales Distribution Management 18. Retailing Brand Management, E- Marketing, Customer Relationship Marketing.

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Kotler on Marketing

It is more important to do what is strategically right than what is immediately profitable.

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Topic ObjectivesTopic Objectives• In this topic, we will examine the following

questions:– How is strategic planning carried out at the

corporate and division levels?– How is planning carried out at the business

unit level?– What are the major steps in the marketing

process?– How is planning carried out at the product

level?– What does a marketing plan include?

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Strategic Planning: Three Key Areas and Four Organization Levels

• Strategic Marketing planStrategic Marketing plan

• Tactical Marketing planTactical Marketing plan

• Marketing planMarketing plan

Functions of management –.pptx

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Strategic Planning: Three Key Areas and Four Organization Levels

• Strategic Marketing planStrategic Marketing plan• (lays out the target markets & the value proposition that will be offered)(lays out the target markets & the value proposition that will be offered)

• Tactical Marketing planTactical Marketing plan• (specifies the marketing tactics, including product features, promotion, (specifies the marketing tactics, including product features, promotion,

merchandising, pricing,sales channels & services)merchandising, pricing,sales channels & services)

• Marketing planMarketing plan• (operational i.e. customized in nature)(operational i.e. customized in nature)

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Figure The Strategic-Planning, Implementation, and Control Process

04/11/23 8

Marketing & Promotions Process ModelMarketing & Promotions Process Model

Re-Re-sellerssellers

UltimateUltimateConsumerConsumer

>Consumers>Consumers>Business>Business

Promotional Promotional DecisionsDecisions

>Advertising>Advertising>Direct >Direct

MarketingMarketing>Interactive>Interactive MarketingMarketing

>Sales >Sales PromotionPromotion

>Publicity & >Publicity & Public Public

RelationsRelations>Personal >Personal

SellingSelling

ProductProduct DecisionsDecisions

Pricing Pricing DecisionsDecisions

Channels Channels ofof

DistributionDistributiondecisionsdecisionsPositioning Positioning

thru thru MarketingMarketingStrategiesStrategies

Selecting Selecting a a

Target MarketTarget Market

Market Market SegmentationSegmentation

IdentifyingIdentifyingMarketsMarkets

Opportunity Opportunity AnalysisAnalysis

Competitive Competitive AnalysisAnalysis

Target Target Marketing Marketing

Purchase

Marketing Strategy & Analysis

Promotion to the

Final Buyer

Target Market

Market PlanningProgram

development

TargetTarget Marketing

Process Process

Promotion to trade

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Corporate and Division Corporate and Division Strategic PlanningStrategic Planning

• All corporate headquarters undertake four All corporate headquarters undertake four planning activitiesplanning activities1. Defining the Corporate Mission

2. Establishing Strategic Business Units (SBUs)

3. Assigning resources to each SBU

4. Planning new businesses, downsizing, or terminating older businesses

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•1.Defining the Corporate Mission– Mission statements define which competitive scopes

the company will operate in• Industry scope• Products and applications scope• Competence scope• Market-segment scope• Vertical scope• Geographical scope

VISION SHRI TARSEM GARG

FOUNDER PRESIDENT AND HON’BLE CHANCELLOR

MISSION STATEMENT

GOALS

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Can you name a company that has Can you name a company that has recently changed its product scope or recently changed its product scope or

market segment scope in a very market segment scope in a very public way? Was this an expansion or public way? Was this an expansion or

contraction of scope?contraction of scope?

Android is an operating system for mobile devices such as cellular phones, tablet computers and netbooks. Android was developed by Google and is based upon the Linux kernel and GNU software. It was initially developed by Android Inc. (a firm later purchased by Google) and lately broadened to the Open Handset Alliance. According to NPD Group, unit sales for Android OS smartphones ranked first among all smartphone OS handsets sold in the U.S. in the second quarter of 2010, at 33%.BlackBerry OS is second at 28%, and iOS is ranked third with 22%.

The Linux kernel is an operating system kernel used by the Linux family of Unix-like operating systems..It is one of the most prominent examples of free and open source software.

http://www.krunker.com/wp-content/uploads/2008/05/google-android.jpg

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•1.Defining the Corporate Mission– Mission statements define which competitive scopes

the company will operate in• Industry scope• Products and applications scope• Competence scope• Market-segment scope• Vertical scope• Geographical scope

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•1.Defining the Corporate Mission

• To define the mission , a company must address Peter Drucker’s classic questions::::

a.What is our business?b.Who is the customer?c. What is the value to the customer?d.What will our business be?

http://www.lg.com/in/about-lg/corporate-information/overview/vision.jsp

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•The unique small business unit benefits that a firm aggressively promotes in a consistent manner.

When companies become really large, they are best thought of as being composed of a number of businesses (or SBUs).

In the broader domain of strategic management, the phrase "Strategic Business Unit" came into use in the 1960s, largely as a result of General Electric's many units.

• Strategic Business Unit Strategic Business Unit or SBU is understood as a business unit within the overall corporate identity which is distinguishable from other business because it serves a defined external market where management can conduct strategic planning in relation to products and markets.


These organizational entities(i.e.SBU’s) are large enough are large enough and homogeneous enough to exercise control over most strategic factors affecting their performance.

They are managed as self contained planning units self contained planning units for which discrete business strategies can be developed.

A Strategic Business Unit can encompass an entire companyencompass an entire company, or can simply be a smaller part of a company set up to perform a specific task.

The SBU has its own SBU has its own business strategy, objectives and competitors and these will often be different from those of the parent company.

Research conducted in this include the BCG Matrix.

This approach entails the creation of business units to address each market in which the company is operating.

The organization of the business unit is determined by the needs of the market.

An SBU is an operating unit SBU is an operating unit or planning focus that groups a distinct set of products or services, which are sold to a uniform set of customers, facing a well-defined set of competitors. The external (market) dimension of a business is the relevant perspective for the proper identification of an SBU. (uses Industry information and Porter five forces analysis.)

Therefore, an SBU should have a set of external customers and not just an internal supplier.]

Companies today often use the word “Segment” or “Division” when referring to SBU’s, or an aggregation of SBU’s that share such commonalities.


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Figure The Strategic-Planning, Implementation, and Control Process

04/11/23 26

Marketing & Promotions Process ModelMarketing & Promotions Process Model

Re-Re-sellerssellers

UltimateUltimateConsumerConsumer

>Consumers>Consumers>Business>Business

Promotional Promotional DecisionsDecisions

>Advertising>Advertising>Direct >Direct

MarketingMarketing>Interactive>Interactive MarketingMarketing

>Sales >Sales PromotionPromotion

>Publicity & >Publicity & Public Public

RelationsRelations>Personal >Personal

SellingSelling

ProductProduct DecisionsDecisions

Pricing Pricing DecisionsDecisions

Channels Channels ofof

DistributionDistributiondecisionsdecisionsPositioning Positioning

thru thru MarketingMarketingStrategiesStrategies

Selecting Selecting a a

Target MarketTarget Market

Market Market SegmentationSegmentation

IdentifyingIdentifyingMarketsMarkets

Opportunity Opportunity AnalysisAnalysis

Competitive Competitive AnalysisAnalysis

Target Target Marketing Marketing

Purchase

Marketing Strategy & Analysis

Promotion to the

Final Buyer

Target Market

Market PlanningProgram

development

TargetTarget Marketing

Process Process

Promotion to trade

Case Study-Tata Group

Tata Group Sustainability Strategy.doc

Year 1 Year 2 Year 3 Year 4-10Present

• Sustainability Credo• Establish TSS• Intra-company sustainability• Worker standards• Taj Hotel conservation• Steel energy efficiency

• Ongoing renewable power analysis• Tata Tea Strategy• New social philanthropy efforts

• Tata sustainability software• Tata Motors ELV project• Expansion of Trailer/Truck program

• TSS external consulting

• Target high-value sustainability certifications (Fair Trade, LEED)

Organisational Structure and Controls.ppt

From slide 26-57

Tata_Group_presentation.pdf

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i.e. doing ------Internal Analysis

From slide----160-184 & 277-310

Strategy II-Evnl Analysis.pptx






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• Critique of Portfolio Models

• Planning New Businesses, Downsizing Older Businesses


Figure : The Strategic-Planning GapFigure : The Strategic-Planning Gap

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• Intensive Growth

Figure : Three Intensive Growth Strategies: Ansoff’s Figure : Three Intensive Growth Strategies: Ansoff’s Product-Market Expansion GridProduct-Market Expansion Grid

Pizza Hut’ home page: Customers can request a catalog of Pizza Hut Pizza Hut’ home page: Customers can request a catalog of Pizza Hut products, products,

CCD’ home page: Customers can request a catalog of CCD products, CCD’ home page: Customers can request a catalog of CCD products, subscribe to a newsletter, and shop onlinesubscribe to a newsletter, and shop online

http://www.cafecoffeeday.com/index.php

http://www.cafecoffeeday.com/index.php?option=com_content&view=article&id=60&Itemid=53

• Integrative Growth Integrative Growth (forward/backward)

• Diversification Growth Diversification Growth (new business)

• Downsizing Older Businesses Downsizing Older Businesses (closing sick SBU’s)


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Give an example of a market segment Give an example of a market segment where integrative growth would be where integrative growth would be

preferable to growth through preferable to growth through diversification. Explain diversification. Explain

why one approach is better why one approach is better than the other.than the other.

Figure : The Business Strategic-Planning Process

Business Unit Strategic PlanningBusiness Unit Strategic Planning

• Business Mission

• SWOT Analysis– External Environment Analysis (Opportunity &

Threat Analysis)• Marketing Opportunity

– Buying opportunity more convenient or efficient– Meet the need for more information and advice– Customize an offering that was previously only available

in standard form


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Give some examples of companies Give some examples of companies that have grown to dominate their that have grown to dominate their

market segment by using technology market segment by using technology to make buying opportunities more to make buying opportunities more

convenient and efficient.convenient and efficient.

– Marketing Opportunity Analysis (MOA)• Can the benefits be articulated to a target market?• Can the target market be reached with cost-effective

media and trade channels?• Does the company have the critical capabilities to

deliver the customer benefits?• Can the company deliver these benefits better than

any actual or potential competitors?• Will the rate of return meet the required threshold of

investment?


Figure : Opportunity and Threat MatricesFigure : Opportunity and Threat Matrices

• Internal Environmental Analysis (Strength/Weakness Analysis)

• Goal Formation

• Strategic Formulation– Strategy


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• Porter’s Generic Strategies– Overall cost leadership– Differentiation– Focus


Travelocity India’s Web site helps the consumer plan the whole vacation Travelocity India’s Web site helps the consumer plan the whole vacation – flights, lodging, and car rental.com– flights, lodging, and car rental.com

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• Operational Effectiveness and Strategy– Strategic group– Strategic alliances


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• Marketing AlliancesMarketing Alliances– Product or service alliances– Promotional alliances– Logistical alliances– Pricing collaborations

• Partner Relationship Management, PRM• Program Formulation and Implementation


Figure : McKinsey 7-S Framework

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• Feedback and Control


Managing The Marketing Managing The Marketing ProcessProcess

Types of ControlTypes of Control

• Annual plan

• ProfitabilityProfitability

• Efficiency

• Strategic

• Responsibility of marketing controller

• Examines where the company is making and losing money


Types of Control

• Annual plan

• Profitability

• EfficiencyEfficiency

• Strategic

• Responsibility of line & staff and / or marketing controller

• Evaluates and attempts to improve spending efficiency of marketing expenditures


Types of Control

• Annual plan

• Profitability

• Efficiency

• StrategicStrategic

• Responsibility of top management and marketing auditor

• Examines whether company is pursuing its best opportunities


• Strategic controls should be conducted Strategic controls should be conducted periodically via:periodically via:– Marketing-effectiveness reviews– Marketing audits

• Additional reviews to consider:Additional reviews to consider:– Marketing excellence review– Ethical and social responsibility review

• The Value Delivery SequenceFigure 4-9: Two Views of the Value-Delivery Process

The Marketing Process

The Marketing Process• Steps in the Planning Process

– The marketing process

• Analyzing Market Opportunities

• Developing Marketing Strategies

• Planning Marketing Programs

• Managing the Marketing Effort– Annual-plan control– Profitability control– Strategic control

Figure 4-10: Factors Influencing Company Marketing Strategy

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Product Planning: The Nature and Product Planning: The Nature and Contents of a Marketing PlanContents of a Marketing Plan

• Contents of the Marketing Plan– Executive Summary– Current Marketing Situation– Opportunity and issue analysis– Objectives– Marketing strategy– Action programs– Financial projections– Implementation controls

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• Sample Marketing Plan: Sonic Personal Digital Assistant– Current Marketing Situation– Opportunity and Issue Analysis– Objectives– Action Programs– Financial Projections


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– Implementation Controls– Marketing Strategy

• Positioning• Product Management• Pricing• Distribution• Marketing Communications• Marketing Research


CUSTOMER VALUECUSTOMER VALUE

Customer Value-Delivery ProcessCustomer Value-Delivery Process

Value Creation and Delivery Value Creation and Delivery SequenceSequence

Porter Value ChainPorter Value ChainCompetitive AdvantageCompetitive AdvantageHolistic Marketing Orientation Holistic Marketing Orientation

CUSTOMER VALUECUSTOMER VALUEValue Creation and Delivery SequenceValue Creation and Delivery Sequence

The task of any business is to deliver CV at a profit.

A company win only by fine tuning the value delivery process & choosing, providing & communicating superior value.

TRADITIONAL VALUE DELIVERY

PROCESS???

CUSTOMER VALUECUSTOMER VALUETraditional Value Delivery Process:

Sell the productMake the product

ServiceDistributeAdvertise/PromoteSellPriceMakeProcureDesign

product


Choose the value Provide the Value

AdvertisingSales

PromnSalesForce

Distributing

Servicing

Sourcing

Making

PricingService Develop.

ProductDevelop.

Value positioning

Market Selection/

focus

Customer Segmentation

Strategic Marketing

Communicate the Value

Tactical marketing

Value Creation and Delivery Sequence

CUSTOMER VALUECUSTOMER VALUEImplications of Value Delivery process

• Choosing the Value: represents the home work marketing must do before any product exists.

• The formula –Segmentation, Targeting & Positioning (STP) is the essence of Strategic Marketing.

• The value delivery process begins before there is a product and continues while it is being developed and after it becomes available


Japanese Concept :Zero Customer feedback time (continuous feedback fro

improvement)

Zero product Improvement time (evaluation of all product improvement ideas)

Zero purchasing time( just-in-time inventory)

Zero Setup time (immediate manufacturing without facing high set up time/costs)

Zero defects (products free from flaws)


Porter Value ChainPorter Value Chain


Value Chain• Given by Michael Porter• Potent tool for identifying ways to create more

customer value.• Every firm is a synthesis of activities performed to DesignProduceMarketDeliver andSupport its product.

Contd.

Value Chain AnalysisValue Chain Analysis

Value Chain AnalysisValue Chain AnalysisValue Chain AnalysisValue Chain Analysis

Inbound

Inbound

Logistics

Logistics

Operations

Operations

Outbound

Outbound

Logistics

Logistics

Marketing

Marketing

& S

ales

& S

ales

Service

Service

Margin

Margin

Margin

Margin

Primary ActivitiesPrimary ActivitiesPrimary ActivitiesPrimary Activities

Value Chain AnalysisValue Chain AnalysisValue Chain AnalysisValue Chain Analysis

Inbound

Inbound

Logistics

Logistics

Operations

Operations

Outbound

Outbound

Logistics

Logistics

Marketing

Marketing

& S

ales

& S

ales

Service

Service

ProcurementProcurement

Human Resource ManagementHuman Resource Management

Technology DevelopmentTechnology Development

ProcurementProcurement

SSUUPPPPOORRTT

SSUUPPPPOORRTT

AACCTTIIVVIITTIIEESS

AACCTTIIVVIITTIIEESS

Primary ActivitiesPrimary ActivitiesPrimary ActivitiesPrimary Activities

Margin

Margin

Margin

Margin

CUSTOMER VALUECUSTOMER VALUEValue Chain:

Firm InfrastructureHuman Resource Management

Technology DevelopmentProcurement

Margins

Margins

Inbound Logistics

Operns. Outbound Logistics

Mktng.& Sales

Service

Contd.

The Value ChainThe Value Chain

Supportactivities

Primary activitiesInbound logistics Materials receiving, storing, and distribution to manufacturing premisesOperations Transforming inputs into finished products.Outbound logistics Storing and distributing productsMarketing and Sales Promotions and sales forceService Service to maintain or enhance product valueCorporate infrastructure Support of entire value chain, e.g. general management planning,

financing, accounting, legal services, government affairs, and QMHuman resources management Recruiting, hiring, training, and developmentTechnology Development Improving product and manufacturing processProcurement Purchasing input

Competitive Advantage

Inbound Logistics

SIS: Automated Just-in-

Time Warehous

ing

Administrative Coordination and Support ServicesSIS: Collaborative Work Systems

Human Resources ManagementSIS: Employee Skills Database Systems

Technology DevelopmentSIS: Computer-Aided Engineering and Design

Operations

SIS: Computer

-Aided Flexible

Manufac-turing

Outbound

Logistics

SIS: Online

Point-of-Sale and

Order Processin

g

Marketing and Sales

SIS: Interactiv

e Targeted Marketing

Customer Service

SIS: Help Desk

Expert System

Procurement of ResourcesSIS: Electronic Data Interchange with Suppliers

SupportProcess

es

PrimaryBusinessProcesse

s

Porter’s Value Chain(in IT company)

CUSTOMER VALUECUSTOMER VALUE There are Nine value creating activities in VC:

• Five Primary Activities

• Four support activities

Inbound Logistics

Operns.Outbound Logistics

MktngSales Service

Firm InfrastructureHuman Resource Management

Technology DevelopmentProcurement

Primary Activities

Supp

ort A

ctiv

itie

s

Contd.

Porter’s Value Chain

Primary Activities: • Inbound Logistics: ‘Inbound’ activities to receive, store and

distribute inputs to the product, such as material handling, inventory control, warehousing and contact with suppliers.

• Operations: Production activities to create the product such as machining, packaging, printing and testing.

• Outbound Logistics: ‘Outbound’ activities to store and distribute the product to customers, including warehousing, order processing and vehicle scheduling.

• Marketing and Sales: Activities associated with providing a means by which buyers can purchase the product and be included to do so (advertising, selling, pricing, merchandising and promotion).

• Service: Activities for providing service or maintaining product value, including installation and training.

Porter’s Value Chain

Support Activities:

• Procurement: Purchasing input.

• Technology Development: Not just machines and processes but also expertise, procedures and systems.

• Human Resource Management: Activities involved in recruiting, training and staff development.

• Infrastructure: General management, finance, planning and quality assurance. Infrastructure supports the whole value chain.

SUPPLIERVALUECHAINS

FIRMVALUECHAIN

CHANNELVALUECHAINS

BUYERVALUECHAINS

Porter’s Value SystemPorter’s Value System

In the “value system” supplier, firm, distributor, and buyer value chains overlap.

The supplier’s outbound logistics is the firm’s inbound logistics. TheDistributor’s inbound logistics is the firm’s outbound logistics, etc.

Value Chain AnalysisValue Chain Analysis

Importance of value-chain analysis is

that it provides a framework for

identifying or developing a distinctive competence.

CUSTOMER VALUECUSTOMER VALUE• The firms task is to examine its cost & performance in

each value creating activity and to look for ways to improve it.

• The firm also analyses its competitor’s & performance as benchmarks against which to compare its own cost & performance.

• The firms success depends not only on how well each department performs its work, but also

on how well the various departmental activities are coordinated to conduct core business processes

Contd.

CUSTOMER VALUECUSTOMER VALUECore Business ProcessesThe Marketing Sensing Process(activities involved in market intelligence, disseminating it & acting on it)

The New Offering Realization process(activities involved in researching, developing & launching new high quality

offerings quickly & within the budget)

The Customer acquisition process(activities involved in defining target markets & prospecting for new customers)

The Customer relationship Management process(activities involved in deeper understanding, relationships & offering to customers)

The Fulfillment Management Process(activities involved in receiving & approving orders, shipping goods on time &

collecting payment)

Contd.EVERY PROCESS ADDS VALUE

CUSTOMER VALUECUSTOMER VALUEWinning companies are those that excel at managing core business processes through cross functional teams.Cross functional teams are also found in non profit &

government organizations as wellTo be successful & to gain more competitive

advantages beyond it own operations, firm also looks into the value chains of:

• Suppliers• Distributors & • Customers

Cross Functional Team: Group of People with different functional Expertise viz; Mktng, Fin.,HR, Operns,- working towards a common objective.Cross functional teams are self directed teams

Firm infrastructure(e.g.Financing, Planning, Investor relations)

Human resource mgt.(e.g. recruiting, training. Compensation system)

Technology Development(e.g. Product design, testing, Process Design<materials research, Market res.

Procurement(e.g. Materials, Subcontracted labor, Advertising )

Land Acquistion &Dev. (Identify attractive markets, secure land, procure entities & Permit, prepare site

After Sales Service(warranties, customer complaints)

Construction(Design eng,schedule & manage constn process

Mktng & Sales(lead genrn,modelhome display, sales force.Cust.selcn. of personalized options

Closing(Customer financing, contract,title closing

Porter value Chain –in Home building

For each Company and Value Chain combination that is checked, write a paragraph explaining how that company company uses technology to support that portion of the value chain. For example, explain how Wal-Mart uses technology to support the Inbound Logistics portion of the value chain. There should be six short paragraphs in total.

Submit this assignment.

This is an individual assignment.

InboundLogistics

Wal-Mart Amazon.comFedExAnd/or

UPS

Operations

OutboundLogistics

Marketingand

Sales

Service

x

x

x

x

x

MasterCard

x

Value Chain

Com

pan

y

Exercise No.3

IT managers also care about these models because:

The models provide a “map” to help managers

•Find where they are •Find where they should go

You are here

Goal

The road to competitive advantage

“How you gather, manage, and use information will determine whether you win or lose”

- Bill Gates

CUSTOMER VALUE CUSTOMER VALUE

Competitive AdvantageCompetitive Advantage


COMPETITIVE ADVANTAGE:COMPETITIVE ADVANTAGE:

Competitive advantage =Competitive advantage =

Core Competencies + Distinctive CapabilitiesCore Competencies + Distinctive Capabilities

CUSTOMER VALUECUSTOMER VALUECORE COMPETENCIES:To carry out business, company needs resources viz:>Labor power>Materials>Machines>Information & >Energy.Traditionally companies owned & controlled the resources that entered their businessesBut this situation is changing.Now-a-days, companies outsource less critical resources, if they can be obtained at

better quality or lower cost.

THE KEY:OWN & NURTURE “RESOURCES & COMPETENCIES”That make up the essence of the business.e.g. NIKE

CUSTOMER VALUECUSTOMER VALUENIKE:DOES NOT MANUFACTURE ITS OWN

SHOES.

Nurtures its superiority in:SHOE DESIGN &SHOE MERCHANDISING

(its two core competencies)

CUSTOMER VALUECUSTOMER VALUECore competency has three characteristics:(also called as competitive advantage)1.It is a source of competitive advantage(in that it makes a significant contribution to perceived customer benefits)2. It has applications in a wide variety of market3.It is difficult for competitors to imitate.

Core competencies refer to areas of Technical & production expertise. To maximize core competencies, business realignment may be necessary &

it involves three steps:1.(re)defining the business concept2.(re)shaping the business scope3.(re)positioning the company’s brand identity.(e.g.Kodak)

CUSTOMER VALUECUSTOMER VALUEDISTINCTIVE CAPABILITIES:Describes excellence in broader business processes viz:

(mainly operational expertise ???)• Market sensing• Customer linking• Channel bonding Companies having distinctive capabilities also

possess competitive advantage.

CUSTOMER VALUECUSTOMER VALUECompetitive advantage ultimately derives from

how well the company has fitted its :Core Competencies &Distinctive capabilities

Into tightly interlocking “Activity Systems”

Competitors find it hard to imitate companies. viz: IKEA, Dell,


Holistic Marketing Orientation Holistic Marketing Orientation


Holistic Marketing:

• Marketers succeed by managing a superior value chain that delivers a high level of product quality, service & speed.

In HM,CV is generated by integrating:::

• VALUE EXPLORATION

• VALUE CRAETION

• VALUE DELIVERY

CUSTOMER VALUE

BusinessPartners

BusinessPartner

Management

ResourceSpace

InternalResource

Management

CompetencyStage

CustomerRelationshipManagement

BusinessDomain

Cognitive Space

CustomerBenefits

Core Competencies

Value Delivery

ValueExploration

Customerfocus

Value Creation

Collaborative network

CUSTOMER VALUECUSTOMER VALUE• VALUE EXPLORATION: i.e. “How can a company identify new value opportunities”Value flows within & across markets that are them selves dynamic &

competitive.Companies need a well defined strategy for value exploration i.e. CS,CS &

RS.Cognitive Space: reflects existing & latent needs and includes dimensions

such as need for-participation-stability-freedom &-changeCompetency Stage:-can be described in terms of -breadth---broad versus focussed scope of business-depth---physical versus knowledge based capabilitiesResource Space:- involves :-Horizontal partner ships—companies choose partnerships based on their

ability to exploit related market opportunities-Vertical partnerships– companies choose partners based on their ability to

serve their value creation.


Value Creation:

• Marketers needs to identify new customer benefits from the customer’s view

• Utilize core competencies from its business domains

• Select & manage business partners from its collaborative network

CUSTOMER VALUECUSTOMER VALUEValue Delivery:Delivering value means substantial investment in infrastructure & capabilities.i.e. the company must become be proficient atCRM,IRM &PRMCRM: CustomersWho,How they behaveWhat they need /want.Company needs to respond appropriately, coherently & quickly to different

customer opportunitiesInt.Res.Mgt: to integrate major business processes(viz-oder processing, execution, payroll, production etc)PRM: handling complex relationships with its trading partners to source,

process & deliver products.

Questions ?Questions ?

2.Strategic Marketing & Planning-CUSTOMER VALUE[1]

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