...commercial painting contractors—a key customer segment—the company learned that labor constituted the lion’s share of contractors’ costs, while paint made up just 15% of costs. Armed with this insight, the resin maker emphasized that its product dried so fast that contractors could apply two coats in one day—substantially lowering labor costs. Customers snapped up the product—and happily shelled out a 40% price premium for it. To craft compelling customer value propositions: UNDERSTAND CUSTOMERS’ BUSINESSES Invest time and effort to understand your customers’ businesses and identify their unique requirements and preferences. Example: The resin manufacturer deepened its understanding of key customers in several ways. It enrolled managers in courses on how painting contractors estimate jobs. It conducted focus groups and field tests to study products’ performance on crucial criteria. It also asked customers to identify performance trade-offs they were willing to make and to indicate their willingness to pay for paints that delivered enhanced performance. And it stayed current on customer needs by joining industry associations composed of key customer segments. SUBSTANTIATE YOUR VALUE CLAIMS “We can save you money!” won’t cut it as a customer value proposition. Back up this claim in accessible, persuasive language that describes the differences between your offerings and rivals’ that matter most to customers. And explain how those differences translate ...
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...captures value,[1] in economic, social, cultural or other contexts. The process of business model construction is part of business strategy. In theory and practice, the term business model is used for a broad range of informal and formal descriptions to represent core aspects of abusiness, including purpose, business process, target customers, offerings, strategies, infrastructure, organizational structures, trading practices, and operational processes and policies. revenue model A description of how a business will earn income, produce profits and generate a higher than average return on investment. In business, a revenue model is generally used for mid and long-term projections of a company's profit potential and operation. the system design by which a business monetizes its services.[1] Examples of revenue models include: * Freemium * Subscription * Affiliate marketing * Ad-funded * Lead generation * Online shopping VALUE PROPOSITION DEFINITION OF 'VALUE PROPOSITION' A business or marketing statement that summarizes why a consumer should buy a product or use a service. This statement should convince a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings. INVESTOPEDIA EXPLAINS 'VALUE PROPOSITION' Companies use this statement to target customers who will benefit most from using the company's products, and this helps maintain an economic moat. The ideal value proposition...
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...Case Study Presented to Associate Prof. Guntalee Ruenrom, Ph.D. & Ajarn Yayus Mak Prepared by MBA English Program #3 Kotchaphan | Laochareon | 518 27814 26 | Ratanapong | Sanpote | 518 29421 26 | Thanan | Sastarasadhit | 518 28530 26 | Karit | Yuvaboon | 518 28094 26 | For the Course of 2605691 Seminar in Marketing Management Faculty of Commerce and Accountancy Chulalongkorn University QUESTION 1 : Identify the primary issues in the case. Between 1997 and 2005 a series of crisis severely challenged the hotel industry and stake holders, especially in asia region, which never before have so many issues that causes a crisis that has lasted that long With majority of properties located in asia, Banyan tree was hit hard by the crisis causing poor profitability in 2005. Foreseeing the risk of focusing its core operation in one region, Mr.Ho, CEO of Banyan tree initiates the expansion plan of banyan tree to open new properties in new location in order to minimize the risks. The IPO was executed to increase the capital for this expansion. However, the key issue of this aggressive expansion in how banyan tree can maintain its respective qualities across the chain due to: * The limitation of manpower and infrastructure to consistently deliver banyan Tree’s experience * The danger of bran dilution in case of banyan tree expands into territories that may have a negative impact on the brand. Its very important that...
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...Clint Cary Professor: Hayes AVSC 3320 August 31, 2015 Managerial Accounting in Aviation One of JetBlue’s goals in 2010 and 2011, according to the form 10 – K was to become “the Americas’ favorite airline”. JetBlue believes that they can reach this goal by continuing to provide superior customer service in delivering their experience while maintaining financial strength. The customer service experience can be delivered by JetBlue’s crewmembers, but their ability to maintain financial strength relies upon their managerial accounting of their airline. Customer service is very important to JetBlue, but if they spend all of the resources on just customer service they would fail as an airline. For JetBlue to maintain financial strength they need to balance the value of their customer service with what they can actually spend on customer service. Every customer that flies with JetBlue cannot be treated with endless meals, and never-ending service. JetBlue’s balance of high quality service/product and their focus on operating costs is what it takes to maintain financial strength. Another one of JetBlue’s goals in 2010 and 2011 was to use fuel hedging. Fuel hedging allowed JetBlue to provide itself with protection against increases in fuel prices by entering into a variety of crude oil contracts, as well as jet fuel swap agreement to save money on rising fuel costs. One of JetBlue’s goals mentioned in the text was to be diligent in their liquidity. By managing their capital expenditures...
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...Chapter 1 Managerial Accounting and the Business Environment Solutions to Questions 1-1 Managerial accounting is concerned with providing information to managers for use within the organization. Financial accounting is concerned with providing information to stockholders, creditors, and others outside of the organization. 1-2 A strategy is a game plan that enables a company to attract customers by distinguishing itself from competitors. The focal point of a company’s strategy should be its target customers. 1-3 Customer value propositions fall into three broad categories—customer intimacy, operational excellence, and product leadership. A company with a customer intimacy strategy attempts to better understand and respond to its customers’ individual needs than its competitors. A company that adopts an operational excellence strategy attempts to deliver products faster, more conveniently, and at a lower price than its competitors. A company that has a product leadership strategy attempts to offer higher quality products than its competitors. 1-4 Managers carry out three major activities in an organization: planning, directing and motivating, and controlling. Planning involves establishing a basic strategy, selecting a course of action, and specifying how the action will be implemented. Directing and motivating involves mobilizing people to carry out plans and run routine operations. Controlling involves ensuring that the plan is actually carried out and is appropriately...
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... Cristina Del Molino Pavlos Exarchos Felipe Ize Achieving customer-management excellence in emerging markets Winners ask four critical questions about market-by-market growth, then tailor their channel-management approaches accordingly. For producers of consumer packaged goods, the road to sustained growth still passes through emerging markets. Despite some softening of enthusiasm for investment in the so-called BRIC markets—Brazil, Russia, India, and China—over the next 15 years nearly three-quarters of the world’s GDP growth will continue to come from emerging-market countries, including Ethiopia, India, Kenya, Mexico, Nigeria, and Vietnam. Growth in these parts of the world is being driven by forces that don’t show any signs of weakening: steady population expansion, rapid urbanization, a proliferation of technology, and gradual opening up of economies and adoption of market-oriented policies. Global packaged-goods producers can gain significant foothold in these markets if they manage talent shortages, infrastructure gaps, and the highly fragmented trade landscape. There is no one-size-fits-all approach to doing this. Our research demonstrates that outperforming consumer-packaged-goods (CPG) companies use a set of standardized practices or tools across markets to determine their priorities for growth in each country. They clearly define their value propositions for customers, achieve optimal distribution, and continually strive to build...
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...It’s year 2009 and HubSpot has reached its 1000 customer milestone. Although this milestone was a great achievement for the 3 year old start- up company, they have a problem on hand. HubSpot needs to decide on which segment to focus on: “Owner Ollies” (OO), “Marketer Marys” (MM) or both. Although a focus on one segment or the other might allow HubSpot to create efficiencies and help them increase their acquisition rate within that segment, our analysis has led us to conclude that they should continue to target both OOs and MMs. From a quantitative perspective we conducted the customer lifetime value calculations. In order to derive the MM and OO lifetime values, we separated both the MMs and OOs into CMS vs. non-CMS users, and also segmented the OOs into “small business” and “very small business” based on different churn rates. Based on our market share assumptions (Exhibit 1) we determined the total potential market in each segment, and used the CMS usage statistics to determine how many of each would be CMS users. We then multiplied the size of each segment by the customer lifetime value of each segment (Exhibit 3 shows the CLV calculation for one segment, Exhibit 2 shows the different inputs used for all 5 segments). Our preliminary analysis favored OOs with over $101 million in potential profits versus $87 million from the MMs (Exhibit 4). Also, based on our CLV analysis the OOs have the additional benefit of becoming profitable in month 6 (Exhibit 3), where the...
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...“Managing Customer Value” suggests that customers might be the key to improve profits. Customers are assets to firms; they generate revenues. However, some assets generate more revenues than other. In order to foster maximum returns from the customers, it becomes imperative to understand the differences between customers groups. Recognizing this diversity will enable value extraction from the investments. Unfortunately, most companies are unable to distinguish between the profitable and the unprofitable customers. One approach in measuring and managing customer value is the “Customer Value Management Cycle”. This cycle consists of 5 steps. 1. Customer segmentation; A proper segmentation drives profits by tailoring values to fit different customer needs. Thus, marketing should be correlated to different behaviors that steer customer profitability. Segments are dynamic and should be continuously refined as understanding of customers increases. Finally, including potential customers in the segments is also advantageous as it can help the company meet the needs of these customers. 2. Segment margins; Value from segmenting the customer base will be maximized when the profitability of these segments is measured. This in turn will allow formulating the right strategy and effective management. An effective method to increase margins is to locate the highest costs and figure out if there are possibilities to allocate these costs to customers. 3. Customer Lifetime Value (CLV);...
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...Customer Acquisition Customer acquisition is a broad term that is used to identify the processes and procedures used to locate, qualify and ultimately secure the business of new customers. There are many different strategies used as part of the acquisition process, with some methods being more effective with specific types of potential clients. In spite of the many and sometimes contradictory ideas that surround the central idea of how to earn a customer, there are a few essentials that are included in just about any type of customer acquisition plan. One of the basics of any customer acquisition effort is to identify and quality potential customers. This is sometimes accomplished with the use of telemarketing as a means of locating individuals and businesses who either express interest in or already use products similar to those produced by the business. From this initial list, these leads are then qualified a little further, using various research methods to determine if there is any solid chance of making a sale with a given lead. If there is a good chance, and the contact is interested in learning more about the products offered, his or her status is usually upgraded to that of prospect, and assigned to a salesperson for further interaction. Establishing rapport with the prospect is essential to any successful customer acquisition effort. Here, the salesperson finds ways to identify with the stated wants and needs of the prospect, and how the products offered can relate...
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...Starbucks: Delivering Customer Service In late 2002, Christine Day, Starbucks’ senior vice president of administration in North America, discovered that the company was not meeting customer expectations and that there was a decline in customer satisfaction. Day attributed the decline in customer satisfaction to a service gap, particularly service speed. Day must decide whether she will proceed with her plan to invest an annual $40 million across its 4,500 company stores. The investment would allow each store an additional 20 hours of labor per week. The objective is to improve service speeds and in turn increase customer satisfaction. We recommend that Starbucks proceed with the investment in labor. Customer service and satisfaction is one of Starbucks’ core competencies. If Day does not address the decline in satisfaction levels, Starbucks can potentially dilute its brand and ultimately lose market share reversing the sales growth achievements attained in the last eleven years. Starbucks’ Success In the last decade, Starbucks had consecutively achieved 5% or higher in comparable store sales growth. This success was due to several factors, primarily to its value proposition. Starbucks’ value proposition consisted of three components: the quality of coffee, the service provided, and store atmosphere. Starbucks prided itself in serving the highest-quality coffee in the industry. To maintain its coffee exacting standards, the company strived to control as much of the...
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...feasible. So they are looking to expand in the domestic Market. Their Choice is High way travelers looking for table served meals at reasonable price. Current Highway restaurant are not dine in fast food restaurants. Pronto will offer Dine in experience with more seating options that the competitors and also dine in with no wait time. This is unique in offering. Procini brand strength will be an added advantage Unique list of specialized menu for highway travelers at lower price. This segment of customers is not saturated. There is a potential to grow beyond the industry 2. What are the service components that would enable Porcini's to develop a unique value proposition different from their regular restaurant? Below are the options for value drivers. Quality Food: Innovative recipe, Fresh Ingredient, Artful presentation. Meal Quality High speed rapid service: Hiring the right people, 1 week Quality training program, Wireless technology, Very Quick service. Value and Convenience: Location of choice Price lower than Procini Cleanliness of restroom Restaurant appearance and Cleanliness 3. Which among the three franchising options should Porcini choose to establish the new concept? Calculate cash flows to back your decision. There are three concepts 1) Company owned and Operate 2) Syndicate 3) Franchise Option Selected: Company Owned and Operated Service chain revenue forecasted Growth is 2.5% each year Through 2016....
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...first choice for customers when shopping for fashion, cosmetics and the home. They have the largest range of desired brands and styles that offer newness, fashionability, quality and value, with increasing exclusivity. The Myer merchandise offer includes 11 core product categories: Womenswear; Menswear; Miss Shop (Youth); Childrenswear; Intimate apparel; Beauty, fragrance and cosmetics; Homewares; Electrical goods; Toys; Footwear, handbags and accessories; and General merchandise. Besides having a wide range of merchandise, Myer also provide services in selected stores, which include Cafés and Restaurants, Formal Hire, Optical, Hair and Beauty Salons, florist (My Flowerhouse),Weight Watchers Lifestyle Centres, Photographic, and Myer Bridal & Gift Registry. Sources of value Value creation and delivery is a key element for strategic customer relationship management. Value can be thought of as the relationship between the benefits experienced from a product or service and the sacrifices made to enjoy those benefits. * Value from product In terms of product innovation, Myer has introduced a new sister site called Myfind.com. The site gives them the ability to test new merchandise and explore potential new product and range extensions and will give their customers access to a dynamic range of competitively priced products that are not necessarily available in store or elsewhere online. Product-service bundling is another way of creating value for its customer; Most cosmetic...
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...competitive edge in the evermore fierce business environment. 1.1 Target Market Crowdsourcing has no particular target market as the concept itself builds upon accreted public input from all relevant sources (Enrique E.A. 2012). The websites designed utilising this concept aims to captivate a large pool of personnel with differing skills sets, commonly referred to as solvers, to provide solutions to those who desire particular skills for their problem, called the seekers. Common value propositions: For seekers: • Efficient and effective completion of specified tasks. • Employment on a ‘need’ basis for cost savings. • Vast skills pool to find the most suitable candidates for the job. • ‘Open Innovation’ (Chesbrough, H. 2003). For solvers: • Vast job opportunities. • Specified workload and financial reward. • Flexibility of working hours and location. • Gain experience in various fields of work according to own preference. 1.2 Crowdsourcing Platforms Analysis Platform Website Specific Value Propositions Mechanical Turk Seekers – Individuals and companies seeking extensive labour. • Opportunities open to the general public as jobs focus on the division of labour for simple tasks requiring minimal innovation or technicality. • Fixed payment, easy to calculate based on ‘HITS’ (Amazon Mechanical Turk Inc. 2015). Solvers – any individual with free time. Freelancer Seekers – Individuals and businesses seeking innovative fashion design. • Requests of design announced...
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...MindGrip® Pens[pic] Introduction La Innovators International launches its sensational new product ‘MindGrip’ range of pens. ‘MindGrip’ pens represent a new milestone achieved in the technology space and is bound to grab eyeballs and will develop a market for itself owing to its unique product proposition and the comprehensive plan chalked out by the marketers at La Innovators International. ‘MindGrip’ is basically a unique new pen gadget which catches the brain waves while one is thinking and holding the pen, converts those waves into alphabets forming words and consequently sentences. It thus capitalizes on the growing dearth of time which working professionals face these days. The random thoughts can be stored , analyzed, processed and sequentially presented in the desired format. Segmentation, Targeting & Positioning Segmentation: As per Population Census of India 2011, the Literacy rate of India is 74.04%. Out of the total literate population, La Innovators International has segmented the market based upon 3 main parameters: Geographic: |Geographic Segmentation | | |Cities |Characteristics | |Metro |Delhi NCR, Bangalore, Mumbai, Chennai |Fairly well established markets with technologically...
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...enables a company to attract customers by distinguishing itself from competitors. The focal point of a company’s strategy should be its target customers. 1-2 Customer value propositions fall into three broad categories—customer intimacy, operational excellence, and product leadership. A company with a customer intimacy strategy attempts to better understand and respond to its customers’ individual needs than its competitors. A company that adopts an operational excellence strategy attempts to deliver products faster, more conveniently, and at a lower price than its competitors. A company that has a product leadership strategy attempts to offer higher quality products than its competitors. 1-3 A person in a line position is directly involved in achieving the basic objectives of the organization. A person in a staff position provides services and assistance to other parts of the organization, but is not directly involved in achieving the basic objectives of the organization. 1-4 The Chief Financial Officer is responsible for providing timely and relevant data to support planning and control activities and for preparing financial statements for external users. 1-5 The three main categories of inventories in a manufacturing company are raw materials, work in process, and finished goods. 1-6 The five steps in the lean thinking model are: (1) identify value in specific products and services; (2) identify the business process that delivers value; (3) organize work arrangements...
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