Strategic market management chapter 8

Chapter Eight © 2007 John Wiley & Sons Alternative Value Propositions Copyright © 2010 John Wiley & Sons, Inc All rights reserved Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful Requests for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc The purchaser may make back-up copies for his/her own use only and not for distribution or resale The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein Chapter - Alternative Value Propositions PPT 8-1 Business Strategy Challenges © 2007 John Wiley & Sons • • • • • A real customer value proposition? A perceived customer value proposition? Is the value proposition/strategy feasible? Is the value proposition relevant to customers? Does it represent a sustainable point of difference? Chapter - Alternative Value Propositions PPT 8-2 Strategic Options Emotional/ Emotional/ Self-Expressive Self-Expressive Benefits Benefits Being Being Global Global Attribute/ Attribute/ Benefit Benefit Brand Brand Familiarity Familiarity Design Design Value Propositions © 2007 John Wiley & Sons Quality Quality Value Value Niche Niche Specialist Specialist Chapter - Alternative Value Propositions Customer Customer Intimacy Intimacy Systems Systems Solutions Solutions Corporate Corporate Social Social Programs Programs Figure 8.1 PPT 8-3 Niche Specialist © 2007 John Wiley & Sons Concentrating Concentrating Resources Resources and and Energy Energy Competing Competing WithLimited Limited With Resources Resources Chapter - Alternative Value Propositions Support Support aa Strategic Strategic Position Position PPT 8-4 Product Quality Dimensions Performance Conformance to specifications Features © 2007 John Wiley & Sons Customer support Process quality Aesthetic design Chapter - Alternative Value Propositions Figure 8.3 PPT 8-5 Signals of High Quality • High quality needs to be communicated-quality dimensions © 2007 John Wiley & Sons • Communication by signals-attributes • Signals: – Tomato Juice—thickness – Cars—sound of door closing – Banking—professional attitude of people – Supermarkets—produce Chapter - Alternative Value Propositions PPT 8-6 © 2007 John Wiley & Sons Stock Return Stock Market Reaction to Brand Equity (BE) & ROI Chapter - Alternative Value Propositions Figure 8.2 The Value Option TheValue Value The Option Option Imperatives Imperatives © 2007 John Wiley & Sons Low-Cost Low-Cost Culture Culture No-Frills No-Frills Products/ Products/ Services Services Chapter - Alternative Value Propositions Cost Advantage Operations Operations Scale Scale Economies Economies Figure 8.4 Value Value Perceptions Perceptions Experience Experience Curve Curve Effect Effect PPT 8-8 Creating a Cost Advantage (or Avoiding a Cost Disadvantage) • No-Frills Product/Service • Operations © 2007 John Wiley & Sons • Scale Economies • The Experience Curve Chapter - Alternative Value Propositions PPT 8-9 © 2007 John Wiley & Sons Key Learnings • Business strategies usually cluster around a limited number of value propositions, such as superior attribute, appealing design, offering complete system solutions, social responsibility, a familiar brand, a superior customer relationship, a specialist niche, superior quality, and superior value The value proposition should be real, believed, feasible, relevant, and sustainable • A value proposition needs to be communicated effectively and supported by a cost advantage, which can be based on a no-frills offering, operations, scale economies, and/or the experience curve • Superior quality, which has been shown to drive stock return, has to be continuously addressed through processes and programs and transferred into quality perceptions Chapter - Alternative Value Propositions PPT 8-10 © 2007 John Wiley & Sons Ancillary Slides Chapter - Alternative Value Propositions PPT 8-11 © 2007 John Wiley & Sons “Ever since Morton’s put a little girl in a yellow slicker and declared, “When it rains, it pours,” no advertising person worth his or her salt has had any excuse to think of a product as having parity with anything.” -Malcolm MacDougal, Jordan Case McGrath Chapter - Alternative Value Propositions PPT 8-12 © 2007 John Wiley & Sons “If you don’t have a competitive advantage, don’t compete.” -Jack Welch, GE Chapter - Alternative Value Propositions PPT 8-13 © 2007 John Wiley & Sons “You can’t depend on your eyes when your imagination is out of focus.” -Mark Twain Chapter - Alternative Value Propositions PPT 8-14 “Be willing to make decisions That’s the most important quality in a good leader Don’t fall victim to what I call the ‘ready-aim-aim-aim syndrome.’ You must be willing to fire.” © 2007 John Wiley & Sons -T Boone Pickens Chapter - Alternative Value Propositions PPT 8-15 “The first man gets the oyster, the second man gets the shell.” © 2007 John Wiley & Sons - Andrew Carnegie Chapter - Alternative Value Propositions PPT 8-16 “Never follow the crowd.” © 2007 John Wiley & Sons - Bernard M Baruch Chapter - Alternative Value Propositions PPT 8-17 ... attitude of people – Supermarkets—produce Chapter - Alternative Value Propositions PPT 8- 6 © 2007 John Wiley & Sons Stock Return Stock Market Reaction to Brand Equity (BE) & ROI Chapter - Alternative... WithLimited Limited With Resources Resources Chapter - Alternative Value Propositions Support Support aa Strategic Strategic Position Position PPT 8- 4 Product Quality Dimensions Performance Conformance... transferred into quality perceptions Chapter - Alternative Value Propositions PPT 8- 10 © 2007 John Wiley & Sons Ancillary Slides Chapter - Alternative Value Propositions PPT 8- 11 © 2007 John Wiley & Sons