How does marketing affect customer value

How does marketing affect customer value?

1.What is customer ?There are two aspects to customer value:

Desired value refers to what customers desire in a product or service.

Perceived value is the benefit that a customer believes he or she received from a product after it was purchased.

2.Value Delivery Process

Traditional view of marketing

Mak

e th

e pr

oduc

tDesign

Procure

Make

Sell

the

prod

uct

Price

Sell

Prom

ote

Distribute

Service

Marketing is involved only in the second half of the process.

But your business will fail. Why?

The Powerful Consumer

Increased Choice

Increased Purchasing Power

Increased Information Input

Increased Access

Increased Empowerment

Value creation and delivery sequence

Choose the value

Customer segmentatio

n

Market selection

Value positioning

Provide the value

Product developmen

t

Service developmen

tPricing Sourcing/

MakingDistributing/

Servicing

Communicate the value

Sales force Sales promotion Advertising

1

2

3

Strategic Marketing

Tactical Marketing

New form of marketing

3.Value Chain“A set of activities that a company performs to design, produce, market, deliver and support its product.”

Primary Activities

1.Inbound logistics: Movement of materials from suppliers to manufacturing plants, warehouses or retail stores.

2.Operations:Converts inputs into the final products.

3.Outbound logistics: Storage and movement of the final product to the consumer.

5.Service: Activities required to keep the product/service working effectively for the buyer after it is sold and delivered.

4.Marketing & Sales:  Selling a product or service and processes for creating, communicating, delivering, and exchanging offerings that have value for customers.

Supporting Activities

1.Procurement:Acquisition of goods, services or works from an outside external source

2.Human Resources Management: All activities involved in recruiting, hiring, training personnel.

3.Technological Development: Equipment, hardware, software, procedures and technical knowledge brought to bear in the firm's transformation of inputs into outputs.

4.Infrastructure: Consists of activities such as accounting, legal, finance, control, public relations

Success depends on Core Business Processes:

1.Market sensing processes: Gathering marketing intelligence, disseminating it within the organization & acting on the information.

2.New offering realization:Research,development and launching high quality offerings quickly and within budget.

3.Customer acquisition: Defining target markets and prospecting new customers.

4.Customer relationship management: Building deeper, understanding relationships and offerings to individual customers.

5.Fulfillment management: Receiving and approving orders, shipping the goods on time and collecting payment.

CHARACTERISTICS:

1. Source of competitive advantage

2. Applications in a wide variety of markets.

3. Difficult for competitors to imitate.

How to maximize core competencies?1.Redefining the big idea.

2.Reshaping the business scope. 3.Repositioning the brand’s identity

Created by Santa Nibedita, CET Bhubaneswar, during an internship by Prof. Sameer Mathur, IIM Lucknow.

www.IIMInternship.com