Strategic thinking and
thinking strategically
Market
sensing
and
learning
strategy
Strategic
market
choices
and
targets
Customer
value
Strategic
strategy
relationships
and
and
positioning
networks
Strategic
transformation
and strategy
implementation
Our Purpose
We will provide branded products and services
of superior quality and value that improve the
lives of the world’s consumers.
As a result, consumers will reward us with
leadership sales, profit and value creation,
allowing our people, our shareholders, and the
communities in which we live and work to
prosper.
Not incidentally Wall Street hates it
Customer value strategy and positioning
value propositions
market mission and values
competitive differentiation and positioning
marketing assets
Marketing is .. the management function
responsible for making sure that every
aspect of the business is focused on
delivering superior value to customers in
the competitive marketplace.
The role of marketing is.. to develop the firm’s
overall value proposition (as a reflection of its
distinctive competence, in terms reflecting
customer needs and wants) and to articulate it to
the marketplace and throughout the organisation.
A major function of the statement of mission,
distinctive competence, and overall value
proposition is to make clear what the firm will not
do, as well as what it will do as stated by corporate
objectives and goals (Webster, F. E., 1992 p11)
Implicit promise a company makes to customers to
deliver a particular combination of values - price,
quality, performance, selection, convenience, and
so on (Treacy and Wiersema 1993; 1995 quoted in
Frew and Payne, 2008)
a clear, simple statement of the benefits, both
tangible and intangible, that the company will
provide, along with the approximate price it will
charge each customer segment for those benefits
(Lanning and Michaels, 1988)
The articulation of the measureable value of the
experience that an organisation or individual
will get from an Offering, where Value =
Benefits minus Cost. (Barnes et al 2009 p 28)
Sources of superior customer value
our capabilities, skills and resources
our organizational processes
our innovation and change processes
our commitment and service capabilities
Market mission
and values
Customer
Competitive
Competitive
value strategy and
differentiation
positioning
positioning
Marketing
assets
Mission
Starts the process of
strategizing and planning
Objectives
Market strategy
Marketing programmes
Results from
strategizing
Results from
planning
Internal
External
Organizational
philosophy
Productmarket domain
What do we
want to be?
Where are we
going to operate?
Broad
Broad
Mission
statement
Narrow
Narrow
Organizational
key values
Critical success
factors
How do we want
our people to
behave?
What do we have
to be good at?
Internal
External
Competitive differentiation
Strategic positions
variety-based
needs-based
access-based
Core competences
Prahalad and Hamel: successful companies understand,
exploit, invest to create and sustain their core
competences
Differentiating capabilities
combine differentiation need with core competence
argument
what are we good at that creates superior customer
value?
What are marketing assets?
differentiating capabilities
customer relationships
channel power
market information
corporate reputation
brands
Example of value proposition types
all benefits
favourable points of difference
resonating focus
All benefits
value
proposition
Favourable
points of
difference value
proposition
Resonating
focus value
proposition
Identifies all
favourable points of
difference in the
market offering,
compared to
alternatives
Focuses on the one
or two points of
difference whose
improvement will
deliver the greatest
value to the customer
Approach:
Lists all the
benefits customers
receive from the
market offering
Responds to the
customer's
question:
Why should we
buy your offering?
Why should we
buy your offering
instead of your
competitors'?
What is the most
important thing for
us to know about
your offering?
Risk/cost:
We may assert
benefits which do
not really create
customer value
We assume
favourable
differences create
value for the
customer
We need deeper
knowledge of
what drives value
for the customer
Source: Frow, P. and Payne, A. (2008)
The Value Proposition Concept:
Evolution, Development and
Application in Marketing
Source: Payne, A. and Frow, P. (2011) “De-constructing the Value
Proposition of a Service Innovation Exemplar ”. In: Patterson, A. and
Oakes, S (eds) Proceedings of the Academy of Marketing Conference 2011:
Marketing Field Forever, Academy of Marketing, Liverpool Available
at: https://marketing.conferenceservices.net/programme.asp?conferenceID=2342&action=prog_list&s
ession=15833 [Accessed 13 October 2011].
renowned globally for its innovation and sole specialization in
repair of external abdominal hernias
benefits from scale and standardization - surgeons each perform
up to 700 operations a year - 99% success rate
Do not have a formal explicit statement of their value proposition
Lanning and Michaels (1988), propose a structure for representing
a value proposition through a formal statement of: the target
customers; the key benefits offered; the price relative to the competition;
and a concise summary of the value proposition.
Target customers :
• Otherwise healthy males with external inguinal hernia willing to
travel to Ontario Canada to receive ‘gold standard ’ hernia repair
Key benefits offered:
highly skilled and specialized surgeons performing just one form
of operation
fast speed of surgery
high success rate
exceptionally low complications and recurrence
fast recovery and return to normal duties
low likelihood of infection
anxiety and tension reduction
club - like atmosphere and group therapy – more like a resort
hotel than a hospital
Aftercare, check ups for life and long-term relationships
Price relative to competition:
•Low, highly competitive price - typically about
half comparable costs for hernia surgery and
recovery
Summary of value proposition:
•Highly successful hernia surgery using a
proven technique – “The Shouldice Method” undertaken in a comfortable and supportive
environment, with fast recovery and little
likelihood of future problems
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