Classify the product. Use appropriate terminology/vocabulary. Q2. Demographically, which consumer(s) might be interested in purchasing? Q3. What is the likel
Attempt this Discussion assignment upon completion of reading chapter #1 and studying the associated materials provided.
Kotler tells us that Marketing is about creating and delivering products of value to selected target market members.
Answer the following three questions by writing one complete paragraph.
Q1. Classify the product. Use appropriate terminology/vocabulary.
Q2. Demographically, which consumer(s) might be interested in purchasing?
Q3. What is the likelihood of the product being successful and profitable? Find online research supporting your answer. Cite the source.
Your response must be a 300-word narrative (paragraph containing complete sentences, proper grammar and punctuation). Your response must include at least five terms/vocabulary learned to-date. Your response must cite two references. See Course Tools > Reference List. +5 points
Module at a glance
Intro – What is a Customer Value Proposition
Defining Customer Value
Types of Value Propositions
Elements of effective and ineffective CVPs (analysis of Value Propositions).
Analysis of Customer Value Propositions: Students research and analyze a series of Value Propositions (includes recognizing weak Value Propositions and transforming these to effective value propositions
Tools and techniques for building a CVP
Designing Value Propositions: Researching, evaluating and writing CVP’s
Learning Objectives
Understand the value of having a Customer Value Proposition (CVP); illustrated by examples of real-world Companies across a variety of business settings
Introduce the key elements of researching, analyzing and writing Value Propositions
Recognize what a CVP is and is not;
Acquire the tools and techniques for writing effective Value Propositions
Enhance problem-solving skills by offering an approach and set of analytical tools (e.g. concepts, frameworks, templates) for creating Value Propositions
Enhance written and oral communication skills; while improving the ability to work effectively in team and collaborative situations
Fundamentals of Customer Value
Customer Value
Mohan Sawhney on Customer Value
Author & Professor, Kellogg School of Management, Feb 3, 2010.
Video: 4:22 min
Prof. Mohan Sawhney is a globally recognized scholar, teacher, consultant and speaker in business innovation, modern marketing and enterprise analytics. Business Week named him one of the 25 most influential people in e-Business. He is also a Fellow of the World Economic Forum. He advises and speaks to Global 2000 firms and governments worldwide and his consulting clients include most of Fortune 100 companies. Prof. Sawhney has authored seven management books: his most recent book, The Sentient Enterprise: The Evolution of Business Decision Making, was published in October 2017 and was on the WSJ bestseller list. He holds a Ph.D. in Marketing from the Wharton School of the University of Pennsylvania.
“You must understand what the end customer wants as it will not be possible for you to transform yourself until you understand how your customer is being transformed and being disrupted.”
Mohan Sawhney. Opening Keynote,
Edge 2017, August 14, 2017. https://www.arnnet.com.au/article/625940/edge-2017-may-live-interesting-times/
What is Customer Value?
Value is customer-defined
The first lesson on value is that what you sell (products and services) is not what your customers buy (utility and value).
Value is about Outcomes
To understand how customers define value, you must focus on the outcomes that customers want when they buy and use your products.
Value is contextual
Value is multidimensional
Value is a trade-off
Total benefits that customers get vs total costs they incur
Value is relative
Based on the next-best alternative
“What the business thinks it produces is not of first importance. … What the customer thinks he is buying, what he considers value, is decisive. And what the customer buys and considers value is never a product. It is always utility, that is, what a product does for him.”
Peter Drucker,
Patriarch of Management Theory
“In the factories, we make cosmetics. In the department stores, we sell hope.”
Charles Revson, Founder of Revlon
Article: Fundamentals of Customer Value, Mohanbir Sawhney, Kellogg School of Management.
https://mthink.com/legacy/www.crmproject.com/content/pdf/CRM4_wp_sawhney.pdf
Why is customer VALUE important?
Customers want value, not products
Companies that deliver value grow faster
Companies that deliver value to their customers enjoy a competitive edge in the market
Value has strategic importance for a company as every touchpoint or interaction a customer has with that company, its products, services impacts value – i.e., promotes – adds to, detracts from.
Managing customer value is essential in today’s information-based, big-data, service-now economy — in fact, it can be the game-changer
What is a Customer Value Proposition
A value proposition is a promise of value to be delivered.
It’s the main reason a prospect should buy from you
(and not from your competitor)
HubSpot Infographic: How to Write a Great Value Proposition [Infographic], Lindsay Kolowich, June 5, 2018
Customer Value Proposition Defined
Mohan Sawhney, Kellogg School of Management,
Feb 3, 2010. 5:19 min
VIDEO
Creating Customer Value
Creating value is about getting the customer experience right.
Business strategy and customer experience: A CEO’s Perspective.
PwC, March 31, 2016 (2:14 Min)
Delivering unique, personalized experiences
“Serving customers is about value – wanting it, creating it, exchanging it – always has been.”
CX = Customer Value = Growth
VIDEO
Creating Customer Value – Intuit CEO
Brad Smith, CEO, Intuit, talks about Intuit's journey and it's innovative approach to creating customer value. Sept, 2014, 3:12 min
VIDEO
CORE COMPETENCIES:
Customer-driven innovation
Design for delight (rapid experimentation (prototypes)
Customer Value Proposition
Part of a firm’s business model
An element of strategy
A reflection of the value a firm offers its customers
A carefully crafted marketing message
Communicates a clear point of differentiation
Value propositions have five fundamental elements:
Appeal – I want this
Exclusivity – I can only get this from you
Clarity – I understand this
Credibility – I believe you
Proof
Michael Porter’s Model
Which customers?
Which needs?
What relative price?
WHAT END USERS AND CHANNELS?
WHICH PRODUCTS, SERVICES, FEATURES?
PREMIUM OR DISCOUNT?
A value proposition answers these there questions:
A Value Proposition is not…
Is not a slogan
Is not a catch phrase
Is not a tagline
Is not a positioning statement
Is not a list of features and benefits
Is not product-centric
Is not an elevator pitch
Benefits of a compelling Value Proposition
Provides customers a reason why they should buy from you!
Provides customers an immediate understanding of what your company has to offer – i.e., value to the customer
Differentiates the Company/Product from the competition
Funnels the right customers to your company – attracts the ideal customer to your business
It envisions the customer experience
Perspective on Value
Kevin Keller discussed the concept of points of parity versus points of difference in his article for Harvard Business Review, “Three Questions You Need to Ask About Your Brand.” He used it with respect to brand positioning, product development, and brand extensions.
Points of Parity (POPs): These are the features you offer that are important to your prospects that you also share with your competitors. Most marketers spend their time here, loudly trumpeting how they can do what their competitors do too, only *better*! That’s a strategy to fail.
Points of Difference (PODs): Here’s where you can win the game. These are the features that are important to your prospects and not available from your competitors.
Points of Irrelevance (POIs): You may have spent a lot of effort developing great features, but if nobody wants them, you should kill them.
Source: Three Questions You Need to Ask About Your Brand, Kevin Lane Keller, Brian Sternthal, and Alice Tybout, HBR, September 2002.
Driving Customer Value – Caterpillar
Caterpillar Defines Customer Value
Video: Caterpillar's Director of IoT on improving the value proposition for customers (4 min)
VIDEO
Article: Smart Iron – How Caterpillar is Leveraging Data to Maximize Customer Experience, Quick Base, Blog, January 17, 2017. https://www.quickbase.com/blog/smart-iron-how-caterpillar-is-leveraging-data-to-maximize-customer-experience
“Our vision is that by enhancing our Cat Connect Technology and Services offerings, entire fleets and worksites – every machine, engine, truck, light tower, smart device, and drone – will eventually share data on one common Caterpillar technology platform and speak the same language. Today we have over 500,000 connected assets, making it the largest connected industrial fleet in the world.”
Value Proposition Examples
Article: 7 of the Best Value Proposition Examples We’ve Ever Seen
By Dan Shewan, WordStream, April 13, 2018
https://www.wordstream.com/blog/ws/2016/04/27/value-proposition-examples
Apple iPhone – The Experience IS the Product
Value Proposition Examples
32 of the BEST Value Propositions (Plus How to Write Your Own)
Hyperlink to article…
Scroll through and select illustrative examples
https://optinmonster.com/32-value-propositions-that-are-impossible-to-resist/
image1.tiff
image2.tiff
image3.tiff
image4.tiff
image5.tiff
image6.tiff
image7.tiff
image8.tiff
,
Chapter #1. Creating Consumer Value and Engagement. What is Kotler’s definition of marketing? What is the AMA? What is the AMA definition of marketing? Who is Seth Godin? What is his definition of marketing? What can be marketed? How are products classified?
According to Kotler
“the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs and desires. It defines, measures and quantifies the size of the identified market and the profit potential. It pinpoints which segments the company is capable of serving best and it designs and promotes the appropriate products and services.”
AMA Definition of Marketing
The American Marketing Association offers formal definition of marketing.
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
American Marketing Association
3
Seth Godin https://www.youtube.com/watch?v=rrNt3R_FTDo
Marketers start by investigating and understanding consumers the firm seeks to serve. We identify consumer needs, wants and desires. Only then can we create successful products.
What is a product?
We have been using the term product and it is important to define and understand the classification system. It is imperative to understand the concept of product, before examining theory regarding strategy.
What is a product? an item/object or system made available for consumer use; it is anything that can be offered to a market to satisfy a consumer need, want or desire.
Products are offered to two types of end-users: final consumers and/or organizational/institutional buyers
What is the difference between a final consumer and organizational/industrial consumers?
A final consumer is an end user of a finished product or service. A final consumer purchases products (goods and services) for self, family or household consumption.
What is the difference between a final consumer and organizational/industrial consumers?
Organizational or industrial consumers purchase capital equipment, raw materials, semi-finished goods, and other products for use in further production or operations or for resale to others. Incl. Manufacturers, Wholesalers, Retailers, Government and Non-profit Organizations.
The product classification system In this class we study the final consumer and the associated product classification system.
Final consumer products are goods or services
A final consumer good is a tangible item
A final consumer service is intangible
Final consumer products are classified in four ways
Final consumer services are classified in two ways
Final Consumer Goods (tangibles)
4 TYPES OF CONSUMER PRODUCTS AND MARKETING CONSIDERATIONS: CONVENIENCE, SHOPPING, SPECIALITY AND UNSOUGHT PRODUCTS
Convenience Goods
Shopping Goods
Specialty Goods
Unsought Goods
The four types of consumer products all have different characteristics and involve a different consumer purchasing behavior. Thus, the types of consumer products differ in the way consumers buy them and, for that reason, in the way they should be marketed.
Convenience goods
Among the four types of consumer products, the convenience product is bought most frequently. A convenience product is a consumer product or service that customers normally buy frequently, immediately and without great comparison or buying effort.
Examples include articles such as laundry detergents, fast food, sugar and magazines. Convenience products are those types of consumer products that are usually (1) low-priced, (2) distributed or placed in many locations to make them readily available when consumers need or want them, (3) represent low involvement and (4) may or may not hold high brand loyalty as consumers do not usually make comparisons of competing brands.
These products require some specific marketing strategies.
Final Consumer Convenience Goods
Final Consumer Convenience Good are further classified as:
Staples – food, drugs, beverages, tobacco, and basic household products. These are things that people are unlikely to reduce their demand for when times are tough because people see them as basic needs.
Impulse – an unplanned purchase. Examples might include fresh flowers, some OTC pharmaceuticals, lightbulbs
Emergency – are bought quickly when they are urgently needed in times of crisis. Examples might include snow shovels, umbrellas, tarps, tents, flashlights, lighters and candles.
Marketing Strategies for Convenience Products
As many of these products are quite generic and easily replaceable, competition is extremely high. At the same time, product differentiation is difficult. Think of e.g. sugar: how would one manufacturer make a brand of sugar brand stand out, while sugar is more or less the same across brands?
The primary marketing strategy for convenience products is extensive distribution. This means that the product must be placed in many different locations – across distribution channels, across retailers, and also within shops. The brand of would be placed as sugar prominently as possible in supermarkets, convenience stores, etc. The brand would not want to occupy the lowest shelf but be as visible as possible. And, the brand could be placed in various locations throughout the retail outlet to gain the highest level of exposure.
Another common marketing strategy for convenience products is the use of the Integrated Market Communications tool of sales promotion, i.e., coupons.
Finally, the packaging on a convenience product is generally very brightly colored or contains images that will easily attract the customer. Packaging is a very important aspect of marketing strategies for convenience products because it is what initially attracts the customer to the product for the first time that they make a purchase of this particular product. Once a consumer has bought the product, it will most likely be purchased again if the consumer is satisfied. This is the importance of the right impression.
Shopping Goods
Shopping goods are products that the customer usually compares on attributes such as quality, price and style in the process of selecting and purchasing.
Thus, a difference between the two types of consumer products presented so far is that the shopping product is usually less frequently purchased and more carefully compared. Therefore, consumers spend much more time and effort in gathering information and comparing alternatives.
The types of shopping goods are: furniture, clothing, used cars, airline services etc. As a matter of fact marketers usually distribute these products through fewer outlets, but provide deeper sales support in order to help customers in the comparison effort.
The two types of shopping goods are homogeneous and heterogeneous.
Heterogeneous shopping products are unique. Think about shopping for clothing or furniture. … In contrast, homogeneous shopping products are very similar.
Specialty Goods
Specialty products possess unique characteristics or brand identifications for which a significant group of consumers is willing to make a special purchase effort.
Specialty product illustrate high involvement
Specialty products for many consumers (not all) represent once or twice in a lifetime purchases
Specialty products have high price tags
Specialty products typically do not hold brand loyalty – less likely for brand comparisons
Example:
Some cars, professional and high-prices photographic equipment, designer clothes etc. A perfect example for these types of consumer products is a Lamborghini.
Unsought Goods
Unsought products are those that a consumer either does not know about or knows about, but does not consider buying under normal conditions and/or do not buy until buyers become aware of them.
Most new innovations are unsought until consumers become aware of them.
Examples: life insurance, pre-planned funeral services etc.
What marketing strategies are effective for unsought goods?
Unsought products require much more promotion and marketing efforts than other types of consumer products. The focus of strategy includes:
Providing basic information about your products
Emphasizing benefits
Final Consumer Services (intangibles)
Services represent a large sector of the global economy.
Services offer intangible consumer value
| TYPE OF SERVICE: | EXAMPLES: |
| Restaurants | out-of-home dining |
| Travel | flights, cruises |
| Clubs | Theme Parks, Cinemas |
| Media | Streaming entertainment |
| Events | Concerts |
| E-commerce | Websites that allow the delivery of goods at home |
| Leasing | Access to capital for auto, rent etc. |
| Utilities | Services for water, gas, electric |
| Culture | Museums |
| Information Technology | Wireless communication networks |
| Leisure | Spa service |
| Insurance | transfer of risk for fee |
| Quality of Life | education and medical services |
| Professional services | legal |
| Finance | banking |
Check your understanding
Identify the specific classification of each of the final consumer products featured.
1
2
3
4
5
6 LG Washer
7
8
9
10
Convenience impulse
Convenience staple
Specialty
Unsought
Shopping good – homogeneous
Shopping good – heterogeneous
Service
Service
Convenience emergency
Specialty
image1.jpeg
image2.png
image3.png
image4.png
image5.png
image6.png
image7.png
image8.png
image9.png
image10.png
image11.png
image12.png
image13.png
image14.png
image15.p
Collepals.com Plagiarism Free Papers
Are you looking for custom essay writing service or even dissertation writing services? Just request for our write my paper service, and we'll match you with the best essay writer in your subject! With an exceptional team of professional academic experts in a wide range of subjects, we can guarantee you an unrivaled quality of custom-written papers.
Get ZERO PLAGIARISM, HUMAN WRITTEN ESSAYS
Why Hire Collepals.com writers to do your paper?
Quality- We are experienced and have access to ample research materials.
We write plagiarism Free Content
Confidential- We never share or sell your personal information to third parties.
Support-Chat with us today! We are always waiting to answer all your questions.
All Rights Reserved Terms and Conditions
College pals.com Privacy Policy 2010-2018