Summary of "Customer value propositions in business Markets" by J.C Anderson, J.A Narus and W. Van Rossum.
A value
proposition is a promise of value to be delivered and a belief from the customer that value will be experienced. To create a good customer value
propositions, you must apply 4 main points:
1/ Understand
customer’s business, and their needs and problems, and bring a solution.
2/Consolidate
your value in front of your customer, and explain your benefits in comparison
with your rivals.
3/ Study
the market and the costs of the value propositions by running short project
with potentials customers and gather data on the results of your goods’
performance.
4/Reward
the employees who improve the customer value propositions, and focus on the
skills of your team to make the best proposal.
The well-known
“Customer value proposition” does not exist in fact. Studies prove the
opposite, and a firm does not keep a client with a low price. There are many
researches to have an idea on a customer value proposition, and what motivates
the customer to buy one service or another.
To
understand the different value propositions below, we give some lexicon:
è 3 types of comparison among the
value elements and the next best alternative.
-
Point of parity: the best alternative owns the same functions that the value elements.
-
Point of difference: The supplier makes an offer which differs from the other services.
-
Points of contention: Distortion between customer and supplier about the service benefit.
These
definitions are very important for the next points. We will see the 3 kinds of
value propositions:
1/ All benefits: listing of the benefits
that the product may give to clients. The more benefits there are, the better.
No need to know in detail the customer or the competitors. But the main
drawback is the lack of information about the benefits. Maybe a supposed
benefit is not in reality.
2/Favorable points of difference: Here the customer knows he has the choice
among alternatives. The firm must have more knowledge on competitors and
customers to have a better specific offer. The different actors of the market
can give one or more benefits, answering to a specific need. All points of
difference are treated and have relative to the next best alternative. The
knowledge of the market and the competition offers is necessary.
3/ Resonating focus: the best value proposition.
It looks like the favorable points of difference but the value is based on one
or two points of difference. The quality of few points of difference is
preferred to quantity. A point of parity may be contained in the value
proposition. It allows having the best solution and a more efficient service or
product. For this point the customer value is recommended.
The authors
discuss the effectiveness of the use of documentary value as established
company and note through time the different values of customers. Throughout
the PT & GEIW document, suppliers improve the experience to give a fairer
value to their customers.
To conclude
the authors insist on the importance of taking into account the views of
customers to integrate values.
Teams are trained
by managers and customers who will be judged at the end by the performance of
the value integrated and the profits generated for the company.
Summary of “Measuring Marketing Productivity: Current Knowledge and Future Directions” from R.T Rust, T. Amber, G.S Carpenter, V. Kumar, and R.K Srivastava
How the different elements are able to
influence marketing productivity?
1/ Environment:
An
isolated company cannot impulse a marketing initiative. It needs external
environment and competition to explore the different ways of new marketing.
Thanks to the links among the companies, the customers are not the only factor
which determinate a marketing campaign. It allows defining and inspiring marketing
initiatives. The competition is beneficial for the marketing plan’s evolution.
It’s a fundamental point, because a firm can be a leader in a marketing plan or
follow other ideas.
2/ Different marketing strategic techniques.
Surveys and studies of the consumers’ currents
tendencies are the pillars to find new marketing strategies. Firms must prioritize
and optimize the channels to deliver goods.
3/ The different impacts of marketing strategies on a consumer.
There are two main effects expected for the
consumer:
-Perceptional, compromising the customer’s
ability to appraise a product
-«summary judgments», have a short view over
the brand’s impact on the consumer, referring to quantitative analysis of that
brand.
4/ Financial field for the marketing plan.
Several marketers believe the ratio of revenues
over money expenditure over a marketing plan is the unavoidable deciding factor
of a strategy’s making. That’s why the budget to increase the marketing
performance must be allocated by the companies. The short term profit view
stops many companies being profitable.
There are three
ways to see the real value of marketing performance:
- See in
the long term.
- Make a
difference between the individual marketing and others.
- Take
non-financial measures are also effective. (For instance how to influence
consumer behavior, the way of the customers are thinking...).
For the
first and third point, how these non-financial measures (the influence on the
thinking of customer behavior) can create value in the short and long term for
shareholders. Efficiency of marketing can bring value to short-term
profitability and can destroy the brand equity of the company in the long term.
The companies must be careful about the different strategies to adopt, and the
boundary effects.
But how
these non-Financials strategic Measures can create value for the company?
Some
product strategies like advertising campaigns, loyalty programs, initiatives
for the brand and other initiatives have impacts on the people vision. They
think that the company share with their customers, and take care of them.
The brand
can influence customer satisfaction and his behavior by imagining tactical
actions. Marketing assets is the part of marketing which study these
techniques. Thanks to that advanced tactical techniques the firm may influence
it image for the customer and influence him in order to make profit and have a
ROI.
A real
business value is based on intangible assets (operant resources) such as brand,
intellectual property or market networks.
But these intangible assets could have different impacts, and marketing
department must develop one point, it can choose between a new advertising
campaign and a better quality of the proposed service.
There are
five points that can measure the consumer's behavior:
- Customer awareness,
- Associations Customer,
- Customer attitudes,
- Customer attachment
- Customer experience.
Finally we
can sum up the two main marketing assets:
-
Brand equity
-
Customer
equity
These two
marketing assets give an idea on the value of the company's short and long term.
