2.Strategic Marketing & Planning-CUSTOMER VALUE[1]
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CP-103 : MARKETING MANAGEMENT Objectives: The purpose of this course is to develop an understanding of the basic concepts of Marketing and acquire marketing operation related skills for products and services. Course outline: 1.Marketing Concept, Role of Marketing in Corporate & Society; Marketing Environment. 2. Market mix, Strategic marketing planning 3. Market Segmentation, Selection Target setting, Positioning 4. Market Measurement and forecasting, Marketing Research and Information System. 5. Meaning and Importance of Buyer Behaviour, Determinants and consumer Behaviour 6. Buying Decision Process, Industrial Buyer Behaviour 7. Product Life Cycle; Product Mix Strategies 8. Branding and Packing Decision; New Product Development; Consumer Adoption Process. 9. Pricing Objectives; Price Determinants; Pricing Methods. 10. Pricing Policies and Strategies. 11. Nature and importance of Distribution channels; Patterns of Distribution Channels, 12. Determinants of Channels Design; Determining Intensity of Distribution 13. Selecting Motivating and Evaluating Channel Members, Physical Distribution Task and Approaches. 14. Marketing communication Process, Promotion Mix and its Determinants 15. Role of Advertising, Sales Promotion and Personal Selling; Promotion Budget. 16. Contemporary Issues; Direct Marketing, Marketing of Services, Marketing Research, 17. Sales Distribution Management 18. Retailing Brand Management, E- Marketing, Customer Relationship Marketing.
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Kotler on Marketing
It is more important to do what is strategically right than what is immediately profitable.
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Topic ObjectivesTopic Objectives• In this topic, we will examine the following
questions:– How is strategic planning carried out at the
corporate and division levels?– How is planning carried out at the business
unit level?– What are the major steps in the marketing
process?– How is planning carried out at the product
level?– What does a marketing plan include?
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Strategic Planning: Three Key Areas and Four Organization Levels
• Strategic Marketing planStrategic Marketing plan
• Tactical Marketing planTactical Marketing plan
• Marketing planMarketing plan
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Functions of management –.pptx
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Strategic Planning: Three Key Areas and Four Organization Levels
• Strategic Marketing planStrategic Marketing plan• (lays out the target markets & the value proposition that will be offered)(lays out the target markets & the value proposition that will be offered)
• Tactical Marketing planTactical Marketing plan• (specifies the marketing tactics, including product features, promotion, (specifies the marketing tactics, including product features, promotion,
merchandising, pricing,sales channels & services)merchandising, pricing,sales channels & services)
• Marketing planMarketing plan• (operational i.e. customized in nature)(operational i.e. customized in nature)
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Figure The Strategic-Planning, Implementation, and Control Process
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04/11/23 8
Marketing & Promotions Process ModelMarketing & Promotions Process Model
Re-Re-sellerssellers
UltimateUltimateConsumerConsumer
>Consumers>Consumers>Business>Business
Promotional Promotional DecisionsDecisions
>Advertising>Advertising>Direct >Direct
MarketingMarketing>Interactive>Interactive MarketingMarketing
>Sales >Sales PromotionPromotion
>Publicity & >Publicity & Public Public
RelationsRelations>Personal >Personal
SellingSelling
ProductProduct DecisionsDecisions
Pricing Pricing DecisionsDecisions
Channels Channels ofof
DistributionDistributiondecisionsdecisionsPositioning Positioning
thru thru MarketingMarketingStrategiesStrategies
Selecting Selecting a a
Target MarketTarget Market
Market Market SegmentationSegmentation
IdentifyingIdentifyingMarketsMarkets
Opportunity Opportunity AnalysisAnalysis
Competitive Competitive AnalysisAnalysis
Target Target Marketing Marketing
Purchase
Marketing Strategy & Analysis
Promotion to the
Final Buyer
Target Market
Market PlanningProgram
development
TargetTarget Marketing
Process Process
Promotion to trade
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Corporate and Division Corporate and Division Strategic PlanningStrategic Planning
• All corporate headquarters undertake four All corporate headquarters undertake four planning activitiesplanning activities1. Defining the Corporate Mission
2. Establishing Strategic Business Units (SBUs)
3. Assigning resources to each SBU
4. Planning new businesses, downsizing, or terminating older businesses
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Corporate and Division Corporate and Division Strategic PlanningStrategic Planning
•1.Defining the Corporate Mission– Mission statements define which competitive scopes
the company will operate in• Industry scope• Products and applications scope• Competence scope• Market-segment scope• Vertical scope• Geographical scope
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VISION SHRI TARSEM GARG
FOUNDER PRESIDENT AND HON’BLE CHANCELLOR
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MISSION STATEMENT
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GOALS
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Can you name a company that has Can you name a company that has recently changed its product scope or recently changed its product scope or
market segment scope in a very market segment scope in a very public way? Was this an expansion or public way? Was this an expansion or
contraction of scope?contraction of scope?
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Android is an operating system for mobile devices such as cellular phones, tablet computers and netbooks. Android was developed by Google and is based upon the Linux kernel and GNU software. It was initially developed by Android Inc. (a firm later purchased by Google) and lately broadened to the Open Handset Alliance. According to NPD Group, unit sales for Android OS smartphones ranked first among all smartphone OS handsets sold in the U.S. in the second quarter of 2010, at 33%.BlackBerry OS is second at 28%, and iOS is ranked third with 22%.
The Linux kernel is an operating system kernel used by the Linux family of Unix-like operating systems..It is one of the most prominent examples of free and open source software.
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Corporate and Division Corporate and Division Strategic PlanningStrategic Planning
•1.Defining the Corporate Mission– Mission statements define which competitive scopes
the company will operate in• Industry scope• Products and applications scope• Competence scope• Market-segment scope• Vertical scope• Geographical scope
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Corporate and Division Corporate and Division Strategic PlanningStrategic Planning
•1.Defining the Corporate Mission
• To define the mission , a company must address Peter Drucker’s classic questions::::
a.What is our business?b.Who is the customer?c. What is the value to the customer?d.What will our business be?
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http://www.lg.com/in/about-lg/corporate-information/overview/vision.jsp
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Corporate and Division Corporate and Division Strategic PlanningStrategic Planning
• All corporate headquarters undertake four All corporate headquarters undertake four planning activitiesplanning activities1. Defining the Corporate Mission
2. Establishing Strategic Business Units (SBUs)
3. Assigning resources to each SBU
4. Planning new businesses, downsizing, or terminating older businesses
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2. Establishing Strategic Business Units (SBUs)
•The unique small business unit benefits that a firm aggressively promotes in a consistent manner.
When companies become really large, they are best thought of as being composed of a number of businesses (or SBUs).
In the broader domain of strategic management, the phrase "Strategic Business Unit" came into use in the 1960s, largely as a result of General Electric's many units.
• Strategic Business Unit Strategic Business Unit or SBU is understood as a business unit within the overall corporate identity which is distinguishable from other business because it serves a defined external market where management can conduct strategic planning in relation to products and markets.
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2. Establishing Strategic Business Units (SBUs)
These organizational entities(i.e.SBU’s) are large enough are large enough and homogeneous enough to exercise control over most strategic factors affecting their performance.
They are managed as self contained planning units self contained planning units for which discrete business strategies can be developed.
A Strategic Business Unit can encompass an entire companyencompass an entire company, or can simply be a smaller part of a company set up to perform a specific task.
The SBU has its own SBU has its own business strategy, objectives and competitors and these will often be different from those of the parent company.
Research conducted in this include the BCG Matrix.
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This approach entails the creation of business units to address each market in which the company is operating.
The organization of the business unit is determined by the needs of the market.
An SBU is an operating unit SBU is an operating unit or planning focus that groups a distinct set of products or services, which are sold to a uniform set of customers, facing a well-defined set of competitors. The external (market) dimension of a business is the relevant perspective for the proper identification of an SBU. (uses Industry information and Porter five forces analysis.)
Therefore, an SBU should have a set of external customers and not just an internal supplier.]
Companies today often use the word “Segment” or “Division” when referring to SBU’s, or an aggregation of SBU’s that share such commonalities.
2. Establishing Strategic Business Units (SBUs)
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Figure The Strategic-Planning, Implementation, and Control Process
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04/11/23 26
Marketing & Promotions Process ModelMarketing & Promotions Process Model
Re-Re-sellerssellers
UltimateUltimateConsumerConsumer
>Consumers>Consumers>Business>Business
Promotional Promotional DecisionsDecisions
>Advertising>Advertising>Direct >Direct
MarketingMarketing>Interactive>Interactive MarketingMarketing
>Sales >Sales PromotionPromotion
>Publicity & >Publicity & Public Public
RelationsRelations>Personal >Personal
SellingSelling
ProductProduct DecisionsDecisions
Pricing Pricing DecisionsDecisions
Channels Channels ofof
DistributionDistributiondecisionsdecisionsPositioning Positioning
thru thru MarketingMarketingStrategiesStrategies
Selecting Selecting a a
Target MarketTarget Market
Market Market SegmentationSegmentation
IdentifyingIdentifyingMarketsMarkets
Opportunity Opportunity AnalysisAnalysis
Competitive Competitive AnalysisAnalysis
Target Target Marketing Marketing
Purchase
Marketing Strategy & Analysis
Promotion to the
Final Buyer
Target Market
Market PlanningProgram
development
TargetTarget Marketing
Process Process
Promotion to trade
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Case Study-Tata Group
Tata Group Sustainability Strategy.doc
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Year 1 Year 2 Year 3 Year 4-10Present
• Sustainability Credo• Establish TSS• Intra-company sustainability• Worker standards• Taj Hotel conservation• Steel energy efficiency
• Ongoing renewable power analysis• Tata Tea Strategy• New social philanthropy efforts
• Tata sustainability software• Tata Motors ELV project• Expansion of Trailer/Truck program
• TSS external consulting
• Target high-value sustainability certifications (Fair Trade, LEED)
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Organisational Structure and Controls.ppt
From slide 26-57
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Tata_Group_presentation.pdf
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Corporate and Division Corporate and Division Strategic PlanningStrategic Planning
• All corporate headquarters undertake four All corporate headquarters undertake four planning activitiesplanning activities1. Defining the Corporate Mission
2. Establishing Strategic Business Units (SBUs)
3. Assigning resources to each SBU
4. Planning new businesses, downsizing, or terminating older businesses
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3. Assigning resources to each SBU
i.e. doing ------Internal Analysis
From slide----160-184 & 277-310
Strategy II-Evnl Analysis.pptx
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Corporate and Division Corporate and Division Strategic PlanningStrategic Planning
• All corporate headquarters undertake four All corporate headquarters undertake four planning activitiesplanning activities1. Defining the Corporate Mission
2. Establishing Strategic Business Units (SBUs)
3. Assigning resources to each SBU
4. Planning new businesses, downsizing, or terminating older businesses
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• Critique of Portfolio Models
• Planning New Businesses, Downsizing Older Businesses
Corporate and Division Corporate and Division Strategic PlanningStrategic Planning
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Figure : The Strategic-Planning GapFigure : The Strategic-Planning Gap
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Corporate and Division Corporate and Division Strategic PlanningStrategic Planning
• Intensive Growth
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Figure : Three Intensive Growth Strategies: Ansoff’s Figure : Three Intensive Growth Strategies: Ansoff’s Product-Market Expansion GridProduct-Market Expansion Grid
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Pizza Hut’ home page: Customers can request a catalog of Pizza Hut Pizza Hut’ home page: Customers can request a catalog of Pizza Hut products, products,
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CCD’ home page: Customers can request a catalog of CCD products, CCD’ home page: Customers can request a catalog of CCD products, subscribe to a newsletter, and shop onlinesubscribe to a newsletter, and shop online
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• Integrative Growth Integrative Growth (forward/backward)
• Diversification Growth Diversification Growth (new business)
• Downsizing Older Businesses Downsizing Older Businesses (closing sick SBU’s)
Corporate and Division Corporate and Division Strategic PlanningStrategic Planning
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Give an example of a market segment Give an example of a market segment where integrative growth would be where integrative growth would be
preferable to growth through preferable to growth through diversification. Explain diversification. Explain
why one approach is better why one approach is better than the other.than the other.
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Figure : The Business Strategic-Planning Process
Business Unit Strategic PlanningBusiness Unit Strategic Planning
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• Business Mission
• SWOT Analysis– External Environment Analysis (Opportunity &
Threat Analysis)• Marketing Opportunity
– Buying opportunity more convenient or efficient– Meet the need for more information and advice– Customize an offering that was previously only available
in standard form
Business Unit Strategic PlanningBusiness Unit Strategic Planning
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Give some examples of companies Give some examples of companies that have grown to dominate their that have grown to dominate their
market segment by using technology market segment by using technology to make buying opportunities more to make buying opportunities more
convenient and efficient.convenient and efficient.
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– Marketing Opportunity Analysis (MOA)• Can the benefits be articulated to a target market?• Can the target market be reached with cost-effective
media and trade channels?• Does the company have the critical capabilities to
deliver the customer benefits?• Can the company deliver these benefits better than
any actual or potential competitors?• Will the rate of return meet the required threshold of
investment?
Business Unit Strategic PlanningBusiness Unit Strategic Planning
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Figure : Opportunity and Threat MatricesFigure : Opportunity and Threat Matrices
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• Internal Environmental Analysis (Strength/Weakness Analysis)
• Goal Formation
• Strategic Formulation– Strategy
Business Unit Strategic PlanningBusiness Unit Strategic Planning
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• Porter’s Generic Strategies– Overall cost leadership– Differentiation– Focus
Business Unit Strategic PlanningBusiness Unit Strategic Planning
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Travelocity India’s Web site helps the consumer plan the whole vacation Travelocity India’s Web site helps the consumer plan the whole vacation – flights, lodging, and car rental.com– flights, lodging, and car rental.com
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• Operational Effectiveness and Strategy– Strategic group– Strategic alliances
Business Unit Strategic PlanningBusiness Unit Strategic Planning
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• Marketing AlliancesMarketing Alliances– Product or service alliances– Promotional alliances– Logistical alliances– Pricing collaborations
• Partner Relationship Management, PRM• Program Formulation and Implementation
Business Unit Strategic PlanningBusiness Unit Strategic Planning
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Figure : McKinsey 7-S Framework
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• Feedback and Control
Business Unit Strategic PlanningBusiness Unit Strategic Planning
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Managing The Marketing Managing The Marketing ProcessProcess
Types of ControlTypes of Control
• Annual plan
• ProfitabilityProfitability
• Efficiency
• Strategic
• Responsibility of marketing controller
• Examines where the company is making and losing money
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Managing The Marketing Managing The Marketing ProcessProcess
Types of Control
• Annual plan
• Profitability
• EfficiencyEfficiency
• Strategic
• Responsibility of line & staff and / or marketing controller
• Evaluates and attempts to improve spending efficiency of marketing expenditures
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Managing The Marketing Managing The Marketing ProcessProcess
Types of Control
• Annual plan
• Profitability
• Efficiency
• StrategicStrategic
• Responsibility of top management and marketing auditor
• Examines whether company is pursuing its best opportunities
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Managing The Marketing Managing The Marketing ProcessProcess
• Strategic controls should be conducted Strategic controls should be conducted periodically via:periodically via:– Marketing-effectiveness reviews– Marketing audits
• Additional reviews to consider:Additional reviews to consider:– Marketing excellence review– Ethical and social responsibility review
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• The Value Delivery SequenceFigure 4-9: Two Views of the Value-Delivery Process
The Marketing Process
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The Marketing Process• Steps in the Planning Process
– The marketing process
• Analyzing Market Opportunities
• Developing Marketing Strategies
• Planning Marketing Programs
• Managing the Marketing Effort– Annual-plan control– Profitability control– Strategic control
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Figure 4-10: Factors Influencing Company Marketing Strategy
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Product Planning: The Nature and Product Planning: The Nature and Contents of a Marketing PlanContents of a Marketing Plan
• Contents of the Marketing Plan– Executive Summary– Current Marketing Situation– Opportunity and issue analysis– Objectives– Marketing strategy– Action programs– Financial projections– Implementation controls
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• Sample Marketing Plan: Sonic Personal Digital Assistant– Current Marketing Situation– Opportunity and Issue Analysis– Objectives– Action Programs– Financial Projections
Product Planning: The Nature and Product Planning: The Nature and Contents of a Marketing PlanContents of a Marketing Plan
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– Implementation Controls– Marketing Strategy
• Positioning• Product Management• Pricing• Distribution• Marketing Communications• Marketing Research
Product Planning: The Nature and Product Planning: The Nature and Contents of a Marketing PlanContents of a Marketing Plan
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CUSTOMER VALUECUSTOMER VALUE
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Customer Value-Delivery ProcessCustomer Value-Delivery Process
Value Creation and Delivery Value Creation and Delivery SequenceSequence
Porter Value ChainPorter Value ChainCompetitive AdvantageCompetitive AdvantageHolistic Marketing Orientation Holistic Marketing Orientation
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CUSTOMER VALUECUSTOMER VALUEValue Creation and Delivery SequenceValue Creation and Delivery Sequence
The task of any business is to deliver CV at a profit.
A company win only by fine tuning the value delivery process & choosing, providing & communicating superior value.
TRADITIONAL VALUE DELIVERY
PROCESS???
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CUSTOMER VALUECUSTOMER VALUETraditional Value Delivery Process:
Sell the productMake the product
ServiceDistributeAdvertise/PromoteSellPriceMakeProcureDesign
product
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CUSTOMER VALUECUSTOMER VALUE
Choose the value Provide the Value
AdvertisingSales
PromnSalesForce
Distributing
Servicing
Sourcing
Making
PricingService Develop.
ProductDevelop.
Value positioning
Market Selection/
focus
Customer Segmentation
Strategic Marketing
Communicate the Value
Tactical marketing
Value Creation and Delivery Sequence
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CUSTOMER VALUECUSTOMER VALUEImplications of Value Delivery process
• Choosing the Value: represents the home work marketing must do before any product exists.
• The formula –Segmentation, Targeting & Positioning (STP) is the essence of Strategic Marketing.
• The value delivery process begins before there is a product and continues while it is being developed and after it becomes available
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CUSTOMER VALUECUSTOMER VALUE
Japanese Concept :Zero Customer feedback time (continuous feedback fro
improvement)
Zero product Improvement time (evaluation of all product improvement ideas)
Zero purchasing time( just-in-time inventory)
Zero Setup time (immediate manufacturing without facing high set up time/costs)
Zero defects (products free from flaws)
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CUSTOMER VALUECUSTOMER VALUE
Porter Value ChainPorter Value Chain
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CUSTOMER VALUECUSTOMER VALUE
Value Chain• Given by Michael Porter• Potent tool for identifying ways to create more
customer value.• Every firm is a synthesis of activities performed to DesignProduceMarketDeliver andSupport its product.
Contd.
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Value Chain AnalysisValue Chain Analysis
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Value Chain AnalysisValue Chain AnalysisValue Chain AnalysisValue Chain Analysis
Inbound
Inbound
Logistics
Logistics
Operations
Operations
Outbound
Outbound
Logistics
Logistics
Marketing
Marketing
& S
ales
& S
ales
Service
Service
Margin
Margin
Margin
Margin
Primary ActivitiesPrimary ActivitiesPrimary ActivitiesPrimary Activities
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Value Chain AnalysisValue Chain AnalysisValue Chain AnalysisValue Chain Analysis
Inbound
Inbound
Logistics
Logistics
Operations
Operations
Outbound
Outbound
Logistics
Logistics
Marketing
Marketing
& S
ales
& S
ales
Service
Service
ProcurementProcurement
Human Resource ManagementHuman Resource Management
Technology DevelopmentTechnology Development
ProcurementProcurement
SSUUPPPPOORRTT
SSUUPPPPOORRTT
AACCTTIIVVIITTIIEESS
AACCTTIIVVIITTIIEESS
Primary ActivitiesPrimary ActivitiesPrimary ActivitiesPrimary Activities
Margin
Margin
Margin
Margin
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CUSTOMER VALUECUSTOMER VALUEValue Chain:
Firm InfrastructureHuman Resource Management
Technology DevelopmentProcurement
Margins
Margins
Inbound Logistics
Operns. Outbound Logistics
Mktng.& Sales
Service
Contd.
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The Value ChainThe Value Chain
Supportactivities
Primary activitiesInbound logistics Materials receiving, storing, and distribution to manufacturing premisesOperations Transforming inputs into finished products.Outbound logistics Storing and distributing productsMarketing and Sales Promotions and sales forceService Service to maintain or enhance product valueCorporate infrastructure Support of entire value chain, e.g. general management planning,
financing, accounting, legal services, government affairs, and QMHuman resources management Recruiting, hiring, training, and developmentTechnology Development Improving product and manufacturing processProcurement Purchasing input
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Competitive Advantage
Inbound Logistics
SIS: Automated Just-in-
Time Warehous
ing
Administrative Coordination and Support ServicesSIS: Collaborative Work Systems
Human Resources ManagementSIS: Employee Skills Database Systems
Technology DevelopmentSIS: Computer-Aided Engineering and Design
Operations
SIS: Computer
-Aided Flexible
Manufac-turing
Outbound
Logistics
SIS: Online
Point-of-Sale and
Order Processin
g
Marketing and Sales
SIS: Interactiv
e Targeted Marketing
Customer Service
SIS: Help Desk
Expert System
Procurement of ResourcesSIS: Electronic Data Interchange with Suppliers
SupportProcess
es
PrimaryBusinessProcesse
s
Porter’s Value Chain(in IT company)
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CUSTOMER VALUECUSTOMER VALUE There are Nine value creating activities in VC:
• Five Primary Activities
• Four support activities
Inbound Logistics
Operns.Outbound Logistics
MktngSales Service
Firm InfrastructureHuman Resource Management
Technology DevelopmentProcurement
Primary Activities
Supp
ort A
ctiv
itie
s
Contd.
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Porter’s Value Chain
Primary Activities: • Inbound Logistics: ‘Inbound’ activities to receive, store and
distribute inputs to the product, such as material handling, inventory control, warehousing and contact with suppliers.
• Operations: Production activities to create the product such as machining, packaging, printing and testing.
• Outbound Logistics: ‘Outbound’ activities to store and distribute the product to customers, including warehousing, order processing and vehicle scheduling.
• Marketing and Sales: Activities associated with providing a means by which buyers can purchase the product and be included to do so (advertising, selling, pricing, merchandising and promotion).
• Service: Activities for providing service or maintaining product value, including installation and training.
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Porter’s Value Chain
Support Activities:
• Procurement: Purchasing input.
• Technology Development: Not just machines and processes but also expertise, procedures and systems.
• Human Resource Management: Activities involved in recruiting, training and staff development.
• Infrastructure: General management, finance, planning and quality assurance. Infrastructure supports the whole value chain.
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SUPPLIERVALUECHAINS
FIRMVALUECHAIN
CHANNELVALUECHAINS
BUYERVALUECHAINS
Porter’s Value SystemPorter’s Value System
In the “value system” supplier, firm, distributor, and buyer value chains overlap.
The supplier’s outbound logistics is the firm’s inbound logistics. TheDistributor’s inbound logistics is the firm’s outbound logistics, etc.
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Value Chain AnalysisValue Chain Analysis
Importance of value-chain analysis is
that it provides a framework for
identifying or developing a distinctive competence.
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CUSTOMER VALUECUSTOMER VALUE• The firms task is to examine its cost & performance in
each value creating activity and to look for ways to improve it.
• The firm also analyses its competitor’s & performance as benchmarks against which to compare its own cost & performance.
• The firms success depends not only on how well each department performs its work, but also
on how well the various departmental activities are coordinated to conduct core business processes
Contd.
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CUSTOMER VALUECUSTOMER VALUECore Business ProcessesThe Marketing Sensing Process(activities involved in market intelligence, disseminating it & acting on it)
The New Offering Realization process(activities involved in researching, developing & launching new high quality
offerings quickly & within the budget)
The Customer acquisition process(activities involved in defining target markets & prospecting for new customers)
The Customer relationship Management process(activities involved in deeper understanding, relationships & offering to customers)
The Fulfillment Management Process(activities involved in receiving & approving orders, shipping goods on time &
collecting payment)
Contd.EVERY PROCESS ADDS VALUE
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CUSTOMER VALUECUSTOMER VALUEWinning companies are those that excel at managing core business processes through cross functional teams.Cross functional teams are also found in non profit &
government organizations as wellTo be successful & to gain more competitive
advantages beyond it own operations, firm also looks into the value chains of:
• Suppliers• Distributors & • Customers
Cross Functional Team: Group of People with different functional Expertise viz; Mktng, Fin.,HR, Operns,- working towards a common objective.Cross functional teams are self directed teams
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Firm infrastructure(e.g.Financing, Planning, Investor relations)
Human resource mgt.(e.g. recruiting, training. Compensation system)
Technology Development(e.g. Product design, testing, Process Design<materials research, Market res.
Procurement(e.g. Materials, Subcontracted labor, Advertising )
Land Acquistion &Dev. (Identify attractive markets, secure land, procure entities & Permit, prepare site
After Sales Service(warranties, customer complaints)
Construction(Design eng,schedule & manage constn process
Mktng & Sales(lead genrn,modelhome display, sales force.Cust.selcn. of personalized options
Closing(Customer financing, contract,title closing
Porter value Chain –in Home building
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For each Company and Value Chain combination that is checked, write a paragraph explaining how that company company uses technology to support that portion of the value chain. For example, explain how Wal-Mart uses technology to support the Inbound Logistics portion of the value chain. There should be six short paragraphs in total.
Submit this assignment.
This is an individual assignment.
InboundLogistics
Wal-Mart Amazon.comFedExAnd/or
UPS
Operations
OutboundLogistics
Marketingand
Sales
Service
x
x
x
x
x
MasterCard
x
Value Chain
Com
pan
y
Exercise No.3
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IT managers also care about these models because:
The models provide a “map” to help managers
•Find where they are •Find where they should go
You are here
Goal
The road to competitive advantage
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“How you gather, manage, and use information will determine whether you win or lose”
- Bill Gates
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CUSTOMER VALUE CUSTOMER VALUE
Competitive AdvantageCompetitive Advantage
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CUSTOMER VALUECUSTOMER VALUE
COMPETITIVE ADVANTAGE:COMPETITIVE ADVANTAGE:
Competitive advantage =Competitive advantage =
Core Competencies + Distinctive CapabilitiesCore Competencies + Distinctive Capabilities
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CUSTOMER VALUECUSTOMER VALUECORE COMPETENCIES:To carry out business, company needs resources viz:>Labor power>Materials>Machines>Information & >Energy.Traditionally companies owned & controlled the resources that entered their businessesBut this situation is changing.Now-a-days, companies outsource less critical resources, if they can be obtained at
better quality or lower cost.
THE KEY:OWN & NURTURE “RESOURCES & COMPETENCIES”That make up the essence of the business.e.g. NIKE
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CUSTOMER VALUECUSTOMER VALUENIKE:DOES NOT MANUFACTURE ITS OWN
SHOES.
Nurtures its superiority in:SHOE DESIGN &SHOE MERCHANDISING
(its two core competencies)
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CUSTOMER VALUECUSTOMER VALUECore competency has three characteristics:(also called as competitive advantage)1.It is a source of competitive advantage(in that it makes a significant contribution to perceived customer benefits)2. It has applications in a wide variety of market3.It is difficult for competitors to imitate.
Core competencies refer to areas of Technical & production expertise. To maximize core competencies, business realignment may be necessary &
it involves three steps:1.(re)defining the business concept2.(re)shaping the business scope3.(re)positioning the company’s brand identity.(e.g.Kodak)
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CUSTOMER VALUECUSTOMER VALUEDISTINCTIVE CAPABILITIES:Describes excellence in broader business processes viz:
(mainly operational expertise ???)• Market sensing• Customer linking• Channel bonding Companies having distinctive capabilities also
possess competitive advantage.
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CUSTOMER VALUECUSTOMER VALUECompetitive advantage ultimately derives from
how well the company has fitted its :Core Competencies &Distinctive capabilities
Into tightly interlocking “Activity Systems”
Competitors find it hard to imitate companies. viz: IKEA, Dell,
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CUSTOMER VALUECUSTOMER VALUE
Holistic Marketing Orientation Holistic Marketing Orientation
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CUSTOMER VALUECUSTOMER VALUE
Holistic Marketing:
• Marketers succeed by managing a superior value chain that delivers a high level of product quality, service & speed.
In HM,CV is generated by integrating:::
• VALUE EXPLORATION
• VALUE CRAETION
• VALUE DELIVERY
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CUSTOMER VALUE
BusinessPartners
BusinessPartner
Management
ResourceSpace
InternalResource
Management
CompetencyStage
CustomerRelationshipManagement
BusinessDomain
Cognitive Space
CustomerBenefits
Core Competencies
Value Delivery
ValueExploration
Customerfocus
Value Creation
Collaborative network
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CUSTOMER VALUECUSTOMER VALUE• VALUE EXPLORATION: i.e. “How can a company identify new value opportunities”Value flows within & across markets that are them selves dynamic &
competitive.Companies need a well defined strategy for value exploration i.e. CS,CS &
RS.Cognitive Space: reflects existing & latent needs and includes dimensions
such as need for-participation-stability-freedom &-changeCompetency Stage:-can be described in terms of -breadth---broad versus focussed scope of business-depth---physical versus knowledge based capabilitiesResource Space:- involves :-Horizontal partner ships—companies choose partnerships based on their
ability to exploit related market opportunities-Vertical partnerships– companies choose partners based on their ability to
serve their value creation.
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CUSTOMER VALUECUSTOMER VALUE
Value Creation:
• Marketers needs to identify new customer benefits from the customer’s view
• Utilize core competencies from its business domains
• Select & manage business partners from its collaborative network
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CUSTOMER VALUECUSTOMER VALUEValue Delivery:Delivering value means substantial investment in infrastructure & capabilities.i.e. the company must become be proficient atCRM,IRM &PRMCRM: CustomersWho,How they behaveWhat they need /want.Company needs to respond appropriately, coherently & quickly to different
customer opportunitiesInt.Res.Mgt: to integrate major business processes(viz-oder processing, execution, payroll, production etc)PRM: handling complex relationships with its trading partners to source,
process & deliver products.
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Questions ?Questions ?