Marketing articles (day 2)

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.