Marketing Strategy and Customer Values 연세대학교 경영대학 김영찬 교수...

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Marketing Strategy and Customer Values 연연연연연 연연연연 연연연 연연 ([email protected] r)

Transcript of Marketing Strategy and Customer Values 연세대학교 경영대학 김영찬 교수...

Page 1: Marketing Strategy and Customer Values 연세대학교 경영대학 김영찬 교수 (youngkim@yonsei.ac.kr)

Marketing Strategy and Customer Values

연세대학교 경영대학김영찬 교수 ([email protected])

Page 2: Marketing Strategy and Customer Values 연세대학교 경영대학 김영찬 교수 (youngkim@yonsei.ac.kr)

Dr. Youngchan Kim 2

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

현재 시장에서는…

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“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 deploymen

ts, 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

Market-Oriented Management

What is strategy?

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Refocus on their core competencies;

Success will be defined by the quality of such decisions as which

customers should be targeted;

How these customers should be served, and what is superior

performance relative to competitors.

How will these decisions be made?

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.

Why we need the Market-oriented management?

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The Nature of Marketing Research

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)

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

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.”

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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)

Most entrepreneurial failures are those of marketing.

“Marketing decisions are the most important.” (Lodish in Entrepreneurial Marketing)

But still, few people ask the consumers. Why?

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Because of inappropriate information..

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….?

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)

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)

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

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 bythe 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)

Perceived negative consequences(sacrifices or costs)

Value

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Customer Value Hierarchy

Desired End-StatesDescribes the goals of the person or organization

ConsequencesDescribes the user/product interaction

AttributesDescribes the product/service

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Peace of mindPeace of mind

Extent of Extent of

hassleshasslesDriving easeDriving ease

Treat me Treat me

intelligentlyintelligently

CRCR

recommendedrecommended Fuel Fuel

indicatorindicator

Comfortable Comfortable

seatsseats

No pressureNo pressure

tacticstactics

Doesn’t breakDoesn’t break

downdown

Service Service

responseresponse

Don’t abandon youDon’t abandon you

after saleafter sale

Mechanics know Mechanics know

their stufftheir stuff

Comparable service Comparable service

across dealersacross dealers

ReliableReliable

Frequency ofFrequency of

repairrepairSizeSize

PlushPlush

Inside lightInside light

switchswitch

ComfortableComfortable

rideride

Smooth Smooth

shiftshift

Desired end states

Consequences

AttributesLayout ofLayout of

instrumentsinstruments

Automobile Customer’s Value Hierarchy

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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

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

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 Market Intuition

Market Intuition Market Intuition

TraditionalTraditionalMarket ResearchMarket Research

TraditionalTraditionalMarket ResearchMarket Research

IncrementalInnovation

BreakthroughInnovation

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

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“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

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“Sizing” Opportunities:

Demand Forecasting

Market Potential and Market Penetration Key market factors

population base, technology, awareness, availability, purchase intention

Forecasting methods Delphi method Analogical inference Information Acceleration (IA) – enhanced scenarios Quantitative tools (time series, regression, etc.)

Key parameters and sensitivity analysis: “What-if ?”