Transcript customer value

Marketing Strategy and Customer
Values
연세대학교 경영대학
김영찬 교수([email protected])
현재 시장에서는…
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Competition is becoming increasingly global and
intense, which has expanded the choices available to
customers
 Customers, in turn, are becoming more sophisticated
in choosing among a larger variety of offerings.
 Both competitors and customers are having to cope
with slower growth economies
Therefore..
 In many areas of the world, these forces combine to
make customers ever more demanding as they seek
higher value in satisfying their needs
Dr. Youngchan Kim
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What is strategy?
Market-Oriented Management
“There is no resting place for an enterprise in a competitive society.”
– ALFRED SLOAN, JR.
 Strategy is…
• A fundamental pattern of present and planned objectives, resource
deployments, and interactions of an organization with markets,
competitors, and other environmental factors
• Directional statements that serve as a central theme guiding and
coordinating functional actions
• It is about
• (1) What : Objectives to be accomplished
• (2) Where : Which industries and markets to focus
• (3) How : Resources and activities allocation to gain
•
competitive advantage
• Strategy is NOT about Operational Efficiency
Dr. Youngchan Kim
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Why we need the Market-oriented management?
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Refocus on their core competencies;
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Success will be defined by the quality of such decisions as which
customers should be targeted;
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How these customers should be served, and what is superior
performance relative to competitors.
How will these decisions be made?
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There is no simple answer to this question, but one thing is clear.
Market strategy and tactics decisions are inevitably based on what
managers “know” about customers, markets, and opportunity.
“Knowing” is an information activity, and so information drives
decisions.
Dr. Youngchan Kim
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The Nature of Marketing Research
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The emphasis in marketing is on the identification
and satisfaction of customer needs.
In order to determine customer needs and to
implement marketing strategies and programs aimed
at satisfying those needs, marketing managers need
information.
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The Nature of Marketing Research(MR)
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The task of marketing research is to assess the
information needs and provide management with
relevant, accurate, reliable, valid, and current
information.
However, in High-Tech environment, gathering
customer needs information is NOT as usual.
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Example: Hotel Business
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One of the chief determinants of satisfaction for
customers of service organizations is length of waiting
time.
How service suppliers respond to this problem depends
very much on how they define it: “the lines are too long at
our registration desk”.
A broader goal: to reduce (or even eliminate) the time
between the guests’ arrival and when they get to their
rooms.
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Example: What Went Wrong with
Iridium?
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MR for High-Tech: A Paradox?
 Ignore your customer! (Fortune)
“It is time to start ignoring the customer.
That’s the only way to create the kind of
breakthrough products and services that
can catapult you far ahead of the
competition.”
Lessons Learned
 Customer research is critical in developing a really
new product.
“The degree to which a product is innovative and the effect of
discontinuities on customer evaluation should be examined
early in the development process.” (Veryzer, JPIM 1998)
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Most entrepreneurial failures are those of marketing.
“Marketing decisions are the most important.”
(Lodish in Entrepreneurial Marketing)
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But still, few people ask the consumers.
 Why?
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Because of inappropriate information..
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This is an example of what can happen when a
business stops organizing its efforts around
improving attributes or features of its existing
offering and instead defines its mission as
determining and delivering customer value.
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What is Customer Value, anyway….?
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What is customer value?
What is it that our particular customers (group) value?
How do I know if we are delivering value to our
customers?
These questions are fundamental to any form of
organizations.
However, the problems are….
(1) failing to ask customers the right questions and/or
(2) failing to disseminate and use customer
information effectively across the organization.
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Reasons…. (1)
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Many managers never ask the right questions to
begin with
The existing process fails to provide actionable data
or because the managers feel that it is impossible to
keep up with rapid marketplace change, including
mercurial customer attitudes.
More arrogant managers are those who feel that they
know the answers better than their customers, who
can be “coached” into correct mindset .
Customer satisfaction measurement(CSM)
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Reasons…. (2)
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The data may not be updated often enough, leading to
information that is outdated and static
Information systems may not effectively integrate
customer information from different organizational sources.
The information may not get into the hands of the
managers who need it to make strategic decisions.
If the information gets into the right hands, the users may
not know what to do with it.
Organizations may not encourage appropriate managerial
use of customer information because they fail to tie
responsibilities, performance evaluation, and rewards to it.
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Defining Customer Value
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Customer value is the customers’ perception of what
they want to have happen (i.e., the consequences)
in a specific use situation, with the help of a product
or service offering, in order to accomplish a desired
purpose or goal
Outcomes that are experienced by
the customer as a result of product
Use
(e.g., stress relief, self-confidence,
efficiency, good looking, shining;
price, difficult to use, harm to hair)
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Value as a trade-off in consequences
Perceived positive consequences
(benefits or desired outcomes)
Value
Perceived negative consequences
(sacrifices or costs)
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Customer Value Hierarchy
Desired End-States
Describes the goals of the person or organization
Consequences
Describes the user/product interaction
Attributes
Describes the product/service
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Desired
end states
Peace of mind
Extent of
hassles
Reliable
Driving ease Consequences
Frequency of
repair
Doesn’t break
down
Size
Attributes
Layout of
instruments
Plush
Service
response
No pressure
tactics
Mechanics know
their stuff
Don’t abandon you
after sale
Treat me
intelligently
CR
recommended
Fuel
indicator
Comfortable
ride
Smooth
shift
Comfortable
seats
Comparable service
across dealers
Dr. Youngchan Kim
Automobile Customer’s
Value Hierarchy
Inside light
switch
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Its Meaning….
When an organization’s focus stops at an attribute
perspective and fails to consider the upper levels of the
value hierarchy, that is where difficulties (and failures) lie.
 While attributes describe the product, consequences are
the results and experience that accrue to the customer as
a result of product consumption and possession.
 “How do you use this product?”, “What happens when you
use this product?”, “What does this product do for you?”
 At the top of the hierarchy are desired end states: the
users’ core values, purposes, and goals
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The Important Characteristics of the
Hierarchy
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The three levels of the hierarchy are interconnected
in the sense that the lower levels are the means by
which the higher level ends are achieved.
The levels of abstraction increases at higher levels in
the hierarchy.
There is a tendency for stability to increase at higher
levels of the hierarchy.
Remember that there is no such thing as “the” value
hierarchy for a product or service.
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Applying Customer Value Hierarchies in
Practice
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Managers should not define their product or service
offerings strictly in terms of attributes.
Rather than a bottom-up approach to decision making, the
hierarchy suggests a top-down approach.
Managers who concentrate their attention on changing,
unstable attributes will find themselves chasing a moving
target, whereas consequences and desired end states
provide a more stable bases for decision making.
The upper levels of the hierarchy are inherently oriented
toward some future state, while the attribute levels focus
on historical or current offerings.
The values provide more opportunity for significant and
creative changes in the product or service.
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Aligning MR with Type of Innovation
Market Intuition
Traditional
Market Research
Incremental
Innovation
Breakthrough
Innovation
Fine-tuning
Ideation
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MR for High-Tech Products
 Roles of Market Research
 Resolve market uncertainty
 Make a match between what customers want
and what company can provide
 Gather competitive intelligence
 Two Major Uses
 “Discovering” market opportunities
 “Sizing” market opportunities
“Discovering” Opportunities
 Role of luck and creativity in innovation
 Systematic approaches
 Market-driven or Research-based
 Observational research
 Empathic design
 Lead user process
 Market-driving or Intuition-based
 Finding new markets for new (esp. disruptive)
technologies: shifting basis of competition
“Sizing” Opportunities:
Demand Forecasting
 Market Potential and Market Penetration
 Key market factors
 population base, technology, awareness, availability,
purchase intention
 Forecasting methods
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Delphi method
Analogical inference
Information Acceleration (IA) – enhanced scenarios
Quantitative tools (time series, regression, etc.)
 Key parameters and sensitivity analysis:
“What-if ?”