Developing and implementing value proposition

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  • 1. Developing and implementingvalue propositionLecture 11Marketing Management (MBA)
  • 2. Three Kinds of ValuePropositions• All benefits• Favorable points of difference• Resonating focus(Anderson et al, 2006)
  • 3. Three Kinds of ValuePropositions (2)
  • 4. The Building Blocks of a SuccessfulCustomer Value Proposition• the essential question is, "How do these value elementscompare with those of the next best alternative?”• There are three ways to develop successful valueproposition– Points of parity are elements with essentially the sameperformance or functionality as those of the next bestalternative.– Points of difference are elements that make the supplier’soffering either superior or inferior to the next best alternative.– Points of contention are elements about which the supplier andits customers disagree regarding how their performance orfunctionality compares with those of the next best alternative.
  • 5. Examples of value proposition
  • 6. Value proposition builder (Barnes et al,2009)
  • 7. Value proposition template and valueproposition statementTen-point value propositiontemplateCorrespondingareasin FigureFunctionalResponsibilityWho is the intended customer? Market VP team with Board sponsorWhat will the customer’s experience be of the offering andthe company, and what price will they pay?Value experience VP team with Board sponsorWhat offerings will we create to deliver the intendedexperience to the intended customer? What purchase orusage of offerings do we want from the intended customer?Offerings VP team with Board sponsorWhat benefits will the customer derive from the experienceand at what cost?benefits VP team with Board sponsorWhat competing alternatives do the customers have? Howare we different?Alternatives anddifferencesVP team with Board sponsorHow will we substantiate our ability to deliver the resultingcustomer experience measurably and specifically?Proofs VP team with Board sponsorOver what time frame will the proposition be delivered tothe customer?VP team with Board sponsorHow will the value proposition be communicated internallyand externally?Marketing & salesHow will the value proposition be operationalizedthroughout the business?Operations & HRHow will we measure and monitor the effectiveness of theproposition on our business?Balanced scorecard and finance
  • 8. An example: Values propositionstatement• You are important to us and, through our partner-ledapproach, we work with you to ensure planning and taxcompliance is fully integrated and operates effectivelywithin the context of your business, enabling you tominimize risk, while delivering clarity and effectiveness inyour tax philosophy.• Our account management approach ensures one singlepartner has a comprehensive overview of the tax servicedelivery. This provides you with a single point of contact,allowing you to achieve rapid decision making, solveproblems and maximize efficiency.• Our prices remain competitively aligned with the value wedeliver and are 10% less than the top global firms
  • 9. Illustration of using the template
  • 10. Illustration of using the template (2)
  • 11. Illustration of using the template (3)
  • 12. Illustration of using the template (4)
  • 13. Illustration of using the template (5)
  • 14. An example: Intel
  • 15. An example: Intel -2
  • 16. An example: Intel -3
  • 17. Class exerciseTen-point value propositiontemplateWho is the intended customer?What will the customer’s experience be of the offering and the company, andwhat price will they pay?What offerings will we create to deliver the intended experience to theintended customer? What purchase or usage of offerings do we want from theintended customer?What benefits will the customer derive from the experience and at what cost?What competing alternatives do the customers have? How are we different?How will we substantiate our ability to deliver the resulting customerexperience measurably and specifically?Over what time frame will the proposition be delivered to the customer?How will the value proposition be communicated internally and externally?How will the value proposition be operationalized throughout the business?How will we measure and monitor the effectiveness of the proposition on ourbusiness?
  • 18. Implementation