Value Based Marketing

P.Doyle

“I argue that the purpose of marketing is to contribute to maximising shareholder value and that marketing strategies must be evaluated in terms of how much value they create for investors”

Yesterday…

It was possible to talk about marketingthat relies mostly on qualitative arguments (erratic arguments about the consumer being satisfied, the growing market share and a soaring company value).

Today …

• The question arises of how to provide value for customers and shareholders.

Marketing determines marketneeds and analyses environment

Marketing sets objectives and determines strategies

Marketing will assistfunctional units to determine theirrole in customer satisfaction

In the cooperation of all units the best solution will be created

The enterprise will evaluate if the needs were met and

at what cost

Marketing will get feedback and will undertake improvements

Functional units will have input to devise strategies

Current and potential market

Company’s market orientation

Objectives and marketing strategy

The strategies offunctional units:

R&D; Supplies; Production; Logistics; IT;Personnel; Marketing; Sales; Service.

Each unit has its role in customer satisfaction

Offer: value to the customer

Result of the offer: value to the firm

Feedback to marketing process

Value Proposition: Key Marketing Concept

Value Proposition Definition (I)

• A clear statement of how company’s product or service: – Solves a customer problem – Delivers a benefit – Improves their situation

Value Proposition Definition (II)

• A business or marketing statement that summarizes why a consumer should buy a product or use a service.

• This statement should convince a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings.

Value Proposition Definition (III)

• A value proposition is the collection of reasons why a person or company benefits from buying something

Value? What is value?

• Something of relative worth and importance or desirable; a fair return for goods or services; estimated or appraised worth

Value Proposition

1. Define target audience2. Understand target:

- Issues / problems - Needs- Value

3. How do you help 4.Use their language5.Craft your value proposition 6.Add additional distinction 7.Test it…Refine it

First WHO, Then What

• Value is in the eye of the beholder• Start with your ideal target client • The value proposition needs to speak to

some one – your target • Varies according to client, segment and

timing

Understand Their Issues

• What are their most pressing issues or problems?

• What are their pain points? • What is keeping them up at night?

What Does Your Target Value?

• To create a value proposition you need to know what customers value: – What do they value? – What language do they use describe

value? – What are the 3 to 7 things they value

above all else?

What Do They Value?

• The answer lies inside customers head. Ask them: – Why did they buy?– What did you say that persuade them? – What stories did you tell? – Why did they choose you over everyone

else…or doing nothing?

How Do You Help?

• How does your business solve their problem?

• What are you promising do for them? (emotional gratification) - Brand Promise

Use Customers Language

• Translate your selling points (features) into a compelling message (benefits)

• Do not use industry language or “jargon” Clear always trumps clever

Creating Your Value Proposition

• Use a 3 part process: – Part 1 = Top anxieties target faces – Part 2 = Anxiety relief you offer – Part 3 = Result target experiences

working with you

Test It & Refine It

• Take your draft and share it • Ask or survey clients• Test it…do your results improve

when using it? T• Tweak it and refine it…use it

– For ____________________(target customer/segment)…

– …that need _________________(the problem we solve)…

– Our Brand’s ____________________(the offering)…

– …provides ____________________(quantified benefit)…

– …unlike _______________________(next best alternative).

– We do this by ____________________(how do we do it)…

– …As demonstrated by ________________(proof points).

Template for Strong Value Proposition/Positioning

Value Propositions: Key Concepts

• Points of Parity• Points of Difference• Points of Contention

Points of Parity (POP)

• POP are associations that are not necessarily unique to the brand but may in fact be shared with other brands.

• These types of associations come in two basic forms category and competitive.

• These are features and benefits offered by basically everyone. 

Points of difference (POD)

• POD attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe that they could not find to the same extent with a competitive brand.

• Strong, favorable, and unique brand associations that make up points of differences may be based on virtually any type of attribute or benefits.

• Examples are:– FedEx (guaranteed overnight delivery), – Nike (performance), – Lexus (quality)

Points of Contentions (POC)

• POC are elements about which the supplier and its customer disagree regarding how their performance or functionality compares with those of the next bets alternatives

• http://www.youtube.com/watch?v=kN0SVBCJqLs

• http://www.youtube.com/watch?v=x7qPAY9JqE4

What the value proposition consists of

• The value proposition is usually a block of text (a headline, sub-headline and one paragraph of text) with a visual (photo, hero shot, graphics).

• Headline. What is the end-benefit you’re offering, in 1 short sentence. Can mention the product and/or the customer. Attention grabber.

• Sub-headline or a 2-3 sentence paragraph. A specific explanation of what you do/offer, for whom and why is it useful.

• 3 bullet points. List the key benefits or features. • Visual. Images communicate much faster than

words. Show the product, the hero shot or an image reinforcing your main message.

• http://conversionxl.com/value-proposition-examples-how-to-create/

Four Actions Framework: Key to Value CurveFour Actions Framework: Key to Value Curve

ReduceWhat factors should be reduced well below the industry standard?

Raise

What factors should be raised well above the industry standard?

The key to discovering a new value curve lies in answering four basic questions

Creating new markets:a new value curve

Creating new markets:a new value curve

Eliminate

What factors that the industry has taken for granted should be eliminated?

Create/Add

What factors that the industry has never offered should be created or added?

Cirque du Soleil example

Eliminate-Reduce-Raise-CreateEliminate-Reduce-Raise-Create

EliminateEliminateStar PerformersAnimal showsAisle concession salesMultiple show arenas

RaiseRaiseUnique venues

ReduceReduceFun and humorThrill and danger

CreateCreateThemeRefined environmentMultiple productionsArtistic music and dance

The Strategy Canvas The Strategy Canvas of Cirque du Soleilof Cirque du Soleil

high

off

eri

ng

level

lowPrice

Fun & Humor Unique Venue

Aisle Concessions

Multiple Show Arenas

Thrills & DangerAnimal Shows

Star Performers

Theme

Refined Viewing Environment

MultipleProductions

Artistic Music & Dance

Cirque du Soleil

ReduceEliminate Raise Create

© Kim & Mauborgne 2006

Ringling Brothers

Smaller Regional Circus