Tuesday, February 13, 2007

The V's of marketing

3 V's approach to marketing:

  1. define the value segment or customers (and his/her needs)
  2. define the value proposition
  3. define the value network that will deliver the promised service
another view

  1. value defining process -- market research and company self-analysis
  2. value developing process -- new product development, sourcing strategy, and vendor selection
  3. value delivering processes -- advertising and managing distribution
The value chain

Value chain -- a tool for identifying ways to create more customers value

Primary activities in the value chain:

  • inbound logistics -- bringing materials into the business
  • operations -- converting materials into final products
  • outbound logistics -- shipping out final products
  • marketing and sales
  • service
Support activities in the value chain:

  • procurement
  • technology development
  • human resource Management
  • firm infrastructure
The holistic marketing framework is designed to address three key marketing questions:

  1. value exploration -- how can a company identify new value opportunities?
  2. Value creation -- how can a company officially create more promising new value offerings?
  3. Value delivery -- how can a company used its capabilities and infrastructure to deliver the new value offerings more efficiently?
Value exploration

developing a strategy requires understanding of the relationships among three spaces.

  1. the customer's cognitive space -- reflects existing and latent needs and includes dimensions such as the need for participation, stability, freedom, and change
  2. the company's competency space -- can be described in terms of breadth-- brought versus focused scope of business; and depth -- physical versus knowledge-based capabilities
  3. the collaborators resource space -- involves horizontal partnerships, where companies choose partners based on their ability to exploit related market opportunities, and vertical partnerships, were companies choose partners based on their ability to serve their value creation
value creation

to exploit a value opportunity the company needs value creation skills.

Marketers need to:

  • identify new customer benefits from the customers view
  • utilize core competencies from its business domain
  • select and manage business partners from its collaborative networks
To craft new customer benefits marketers must understand:

  • what the customer thinks about
  • what the customer wants
  • what the customer does
  • what the customer worries about
  • who and what the customers admire
  • who and what the customers interact with
  • who and what influences the customers
Business realignment may be necessary to maximize core competencies. It involves three steps:

  1. defining/redefining the business concept
  2. shaping/reshaping the business scope
  3. positioning/positioning the company's brand identity
Value delivery

company must become proficient at:

  • customer relationship management -- allows the company to discover who its customers are, how they behave, and what they need and want
  • internal resource management -- integrates major business processes for effective responses
  • business partnership management -- allows the company to handle complex relationships with its trading partners to source, process, and deliver products

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