Customer interface - Business Ontology Model

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  • Because Companies can reach their target customers using different channelsPerformance and Satisfaction plan for guiding decisions about a product's distribution channel -- the chain of intermediaries that it passes from its creation through to delivery to the end user. 
  • Channel conflict is a situation in which channel partners have to compete against one another or the vendor's internal sales department. Channel conflict can cost a company and its partners money as partners try to undercut one another. 
  • firms must carefully define what kind of relationship they want to establish with what kind ofcustomer. Profits from customer relationships are the lifeblood of all businesses.Companies must analyze customer data in order to evaluate the type of customer they want toseduce and acquire, are profitable and worth spending retention efforts and are likely to be subjectto add-on selling
  • A RELATIONSHIP promotes a VALUE PROPOSITION (1-n)A RELATIONSHIP is maintained with a TARGET CUSTOMER (1-n)Profits from customer relationships are the lifeblood of all businesses.
  • Value of potential future revenue generated by a company'scustomers in a lifetime. A company with high customer equity will be valued at a higher price than a company with alow customer equity.
  • Customer interface - Business Ontology Model

    1. 1. J.A.S. Fernando – AS2010362 M.K.K. Gunasekara – AS2010377 CSC 368 2.0 Enterprise Computing and ERP Systems Department of Statistics and Computer Science
    2. 2. Overview  Introduction  Target Customer Element  Criterion Element  Reaching Customers  Channel Element  Link Element  Channel Strategy  Channel Conflicts  Relationship Element  Mechanism Element 2 J.A.S. Fernando - AS2010362
    3. 3. Introduction  The second pillar of the business model ontology.  Who the company's target customers are, how it delivers them products and services, and how it builds a strong relationships with them.  ICT has had a very strong influence on the ways companies organize their customer relationships.  ICT has contributed to the facilitation of customer-related information gathering and customer- and product-related information diffusion. 3 J.A.S. Fernando - AS2010362
    4. 4. Introduction  In order to serve customers better or to reach new markets companies introduce new distribution and communication channels, such as the Internet or mobile phones, but also new relationship mechanisms, such as personalization and trust.  Three elements  Target Customer  Distribution Channel  Relationship 4 J.A.S. Fernando - AS2010362
    5. 5. Introduction Relationship Mechanism CUSTOMER INTERFACE Value Proposition Distribution Channel Target Customer Offering Link Criteria Revenue Pricing Customer Interface 5 J.A.S. Fernando - AS2010362
    6. 6. Target Customer Element  A TARGET CUSTOMER segment defines the type of customers a company wants to address.  Selecting a company's target customers is all about segmentation.  Effective segmentation enables a company to allocate investment resources to target customers.  The most general distinction of target customers exists between business and/or individual customers, commonly referred to as business-to-business (B2B) and business-to consumer (B2C). 6 J.A.S. Fernando - AS2010362
    7. 7. Target Customer Element Value proposition Target Customer setOf isA Criterion Target Customer 7 J.A.S. Fernando - AS2010362
    8. 8. Criterion Element  Defines the characteristics of a TARGET CUSTOMER  Cardinality  0-n  Attributes  NAME {abc}  DESCRIPTION {abc} 8 J.A.S. Fernando - AS2010362
    9. 9. Reaching Customers  Intermediaries  Independent organizations involved in the process of making a Product or service available for use or consumption.  Disintermediation  The elimination of intermediaries in the supply chain, also referred to as “cutting out of the middlemen”.  Cybermediary  A firm that offers intermediary services over the web , is a cybermediary. 9 J.A.S. Fernando - AS2010362
    10. 10. Channel Element  A distribution CHANNEL describes how a company delivers a VALUE PROPOSITION to a target CUSTOMER SEGMENT.  The connection between a firm's VALUE PROPOSITIONs and its TARGET CUSTOMERs.  Allows a company to deliver value to its customers either directly or indirectly.  Direct or indirect CHANNEL(s) that can be decomposed into their LINK(s). 10 J.A.S. Fernando - AS2010362
    11. 11. Channel Element Value proposition Distribution Channel setOf isA Offering Link isA by Actor Distribution Channel 11 J.A.S. Fernando - AS2010362 Target Customer
    12. 12. Channel Element  ICT, and particularly the Internet, has a great potential to complement rather than to cannibalize a business’s existing channels.  However, selling through several channels simultaneously eventually causes channel conflict when they compete to reach the same set of customers. 12 J.A.S. Fernando - AS2010362
    13. 13. Link Element  The CHANNEL element can be further decomposed into its channel LINKs.  Describes a specific channel role.  It may be part of the VALUE PROPOSITION and it may be related to an other LINK.  The channel LINKs of the different CHANNELs may sometimes be interrelated. 13 J.A.S. Fernando - AS2010362
    14. 14. Link Element  Have a potential for value creation and thus contribute to a firm's VALUE PROPOSTION.  Attributes  Inherited from OFFERING  CUSTOMER BUYING CYCLE {AWARENESS, EVALUATION, PURCHASE, AFTER SALES} 14 J.A.S. Fernando - AS2010362
    15. 15. Link Element REASONING  Similar to the reasoning on OFFERINGs.  Contribute to value creation in three distinct ways.  Use  Reducing risk -Integrating customers into the value creation process through customization.  Reducing a customer's efforts - Many companies have reduced customer efforts through online troubleshooting, manuals, FAQs or direct links to product engineers. 15 J.A.S. Fernando - AS2010362
    16. 16. Link Element CUSTOMER BUYING CYCLE (CBC)  The Customer Buying Cycle reflects all possible contact points between a supplier and a customer in the context of the acquisition, possession and disposal of the product or service.  The cycle is divided into four phases.  Awareness  Evaluation  Purchase  After sales 16 J.A.S. Fernando - AS2010362
    17. 17. Link Element CUSTOMER BUYING CYCLE (CBC) 17 J.A.S. Fernando - AS2010362
    18. 18. Link Element CBC and channel functions CHANNEL {Awareness} Advertising Promotions Public relations Partnerships 18 {Evaluation} Company information Product catalogues Advice (requirements) . Specification Community Testing J.A.S. Fernando - AS2010362 {Purchase} {After sales} Offer Negotiation Decision Contract Orders & tracking Billing & payment Fulfillment & delivery Implementation & use Training Monitoring Maintenance/Service Troubleshooting support Reverse logistics (disposal) Community Product life cycle manage
    19. 19. Link Element VALUE LIFE CYCLE  If a channel LINK is also a part of the VALUE PROPOSITION the attribute value life cycle, overwrites the attribute customer buying cycle. Awarene ss Awareness Evaluation Evaluatio n Creation Purchase Purchase After Sales Use Renewal Transfer VALUE LEVEL and PRICE LEVEL  Inherited from the OFFERING if the LINK is also part of the VALUE PROPOSITION. 19 J.A.S. Fernando - AS2010362
    20. 20. Channel Strategy  Distribution Channel has important implications for management.  The appropriate strategy varies from one product to another.  Management tools  Customer Buying Cycle  Hybrid Grid Model 20 M.K.H.Gunasekara - AS2010377
    21. 21. Example – Customer Buying Cycle 21 Channels at Barnes & Noble (based on (Moriarty and Moran 1990; Dolan 2000)) M.K.H.Gunasekara - AS2010377
    22. 22. Channel Conflicts  More than one channel competes for the same customers.  An important element of a channel strategy in a business model 22 M.K.H.Gunasekara - AS2010377
    23. 23. Relationship Element  The Relationship element describes the relationship a company establishes with a target customer segment.  based on customer equity  can be decomposed into several relationship mechanism 23 M.K.H.Gunasekara - AS2010377
    24. 24. Relationship Element  Cardinality  1-n  Inherits from relationship MECHANISM  Related to value Proposition and Target Customer 24 M.K.H.Gunasekara - AS2010377
    25. 25. CUSTOMER EQUITY  classify relationships according to their customer equity goals  Acquisition  Retention  Add-on selling 25 M.K.H.Gunasekara - AS2010377
    26. 26. Mechanism Element  A relationship mechanism is part of a relationship  Describes the function it accomplishes between the company and its customers  It may also be a channel link or a part of the value proposition. 26 M.K.H.Gunasekara - AS2010377
    27. 27. Mechanism Element  Element of RELATIONSHIP  Inherits from LINK element  Similar to the reasoning on OFFERINGs  Cardinality  0-n  Function  This attribute describes which function the relationship MECHANISM fulfills. 27 M.K.H.Gunasekara - AS2010377
    28. 28. Mechanism Element  Function - Attributes  Personalization  Trust  Brand 28 M.K.H.Gunasekara - AS2010377
    29. 29. Example – Mini Orange 29 M.K.H.Gunasekara - AS2010377
    30. 30. References  Customer Relationship Management, <http://www.bing.com/search?q=customer+relationship+management+software& qs=n&form=QBLH&pq=customer+relationship+management+s&sc=0-0&sp=1&sk=>,[16 January 2014]   Market segmentation, Available From:<http://en.wikipedia.org/wiki/Market_segmentation >, [16 January 2014]  What is Transaction Cost Theory? ,Available From:<http://www.businessmate.org/Article.php?ArtikelId=182 > , [17 January 2014]  Transaction Cost Theory , Available From: <http://ousest.com/transact.html >, [17 January 2014]  30 Target Market, Available From:<http://en.wikipedia.org/wiki/Target_market>[16 January 2014] David Steele, Disintermediation and Reintermediation by E-business, 2009, Available From:<http://www.cbpp.uaa.alaska.edu/afef/disintermediation_and_reintermed.ht m >, [17 January 2014]  Sarkar,Bulter,Steinfield, Intermediaries and Cybermediaries, 1995, Available J.A.S. Fernando - AS2010362 From:<http://onlinelibrary.wiley.com/doi/10.1111/j.1083-

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