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Streetscooter (Subject) / 3 The proposition (Lesson)
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- Goods-dominant logic Good as unit of exchange and classified as operand resource Traditional marketing perspective: advertisement and sale of tangible products Tangible output and discrete transactions are central Customer as recipient of product Treat service as: A residual, offered to enhance a good, service industry: health care, education etc.
- Service-dominant logic People exchange to acquire benefits of specialized competencies or services Customer (operant resource) is a co-producer of service and active participant in relational exchange Services are the application of specialized competences (knowledge, skills) S-D logic differentiates into: Operand resources (raw material) and operant resources (skills, knowledge, technology)
- Foundational premises of S-D logic Operant resources are the fundamental source of strategic benefit All economies are service economies Value is co-created by multiple actors, always including the beneficiary Actors cannot deliver value but can participate in the creation and offering of value propositions Goods are distribution mechanisms for service provisions
- Definition of value proposition in G-D logic Value proposition is 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
- Definition value proposition S-D logic Value proposition is treated as a promise created either by the firm idependently or together with customers and other actors through resource integration based on knowledge and competencies
- Three alternatives to create a value propositon All Benefits Favorable Points of Difference Resonanting Focus
- All Benefits Consists of: All benefits customers receive from a market offering Answer the customer question: Why should our firm purchase your offering? Requires: Knowledge of own market offering Has the potential pitfall: Benefit assertion
- Favorable Points of Difference Consists of: All favorable points of difference a market offering has relative to the next best alternative Answer the customer question: Why should out firm purchase your offering instead of your competitor's? Requires: Knowledge of own market offering and next best alternative Has the potential pitfall: Value presumption
- Resonanting focus Consists of: The one or two points of difference (and, perhaps, a point of parity) whose improvement will deliver the greatest value to the customer for the foreseeable future Answer the customer question: What is most worthwhile for our firm to keep in mind about your offering? Requires: Knowledge of how own market offering delivers superior value to customers, compared with next best alternative Has the potential pitfall: Requires customer value research
- Four hierarchical key dimensions to better communicate value proposition to customers Economic value: Products' objective monetary worth to a customer, the lowest price or best tradeoff Functional value: Preceived utility derived from functional, utilitarian or physical performance, designed to meet customer needs Emotional value: Perceived utility to arouse feelings e.g. joy creating a unique experience for the customer Symbolic Value: Created from representing somehting (self-expressive aspects) other than the obvious function of the product
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- Elements of the Value Proposition Canvas Customer Segment: Customer Jobs, Pains, Gains Value Proposition: Pain Relievers, Gain Creators, Products and Services
- Definition of relationship marketing Relationship marketing identifies and establishes, maintains and enhances and, when necessary, terminates relationships with customers and other stakeholders, at a profit so tha the objectives of all parties involved are met; and this is done by mutual exchange of promises
- The relationship spectrum Transactional exchanges Value-added exchanges Collaborative exchanges
- The patterns of collaborative exchange Strong and lasting commitment from all partners Trust and openness play central roles for close and regular exchange between customer and supplier Fixed visits of executives and technical personnel can strengthen relationship Operational linkages and information-sharing mechanisms should be designed and implemented to support exchange
- Value drivers in collaborative relationships Product Quality Service Support Delivery Supplier Know-How Time-to-market Personal interaction Price Process cost