Concepts Marketing and innovation
1. Customer value
Customer value is the perceived preference for and evaluation of the
product attributes, attribute performance and consequences arising from
use that facilitate (or block) achieving the customer’s goals and purposes
in use situations.
Means-end-chain Woodruff
Customers conceive value in a means-end way.
- Products are bundles of specific attributes and attribute
performances.
- When purchasing the product, they form desires or
preferences for certain attributes based on their ability to
facilitate achieving their desired consequence experiences.
- The customers use goals ad purposes to attach importance
to consequences.
So, first the customers sees a product as a bundle of attributes, then
sees the benefits it potentially has for achieving their goals. And lastly they will value these benefits
in order to satisfy their goals.
Instrumental values: means by which we achieve our end-goals (ambitious, capable, cheerful)
Terminal values: the end goals (happy, comfortable life, etc)
Customers’ loss aversion Gourville
Consumers tend to value their current possessions & benefits more than new ones. & Perceived
losses are weighted more significant in a choice than the potential gain.
Endowment effect : people value an object that they possess way more than one they don’t.
Prospect theory:
- New products are a trade-off. Exchange something for the new product.
- Providers overvalue their new products
- New products that require behavioral change often take long to adopt.
Strategy for overcoming:
- Accept resistance:
o Be patient
o Strive for 10 times improvement
o Eliminate the old
- Minimize resistance:
o Make behavioral competitive products
o Seek out the unendowed
o Find believers
, 2. Marketing department & Market orientation
Able to apply the market orientation concept and argue its relationship with marketing and
innovation
Marketing concept: a philosophy that places customer satisfaction and value as the core of its
mission and the exchange as the basis unit of analysis.
Cultural perspective: the organizational culture that most effectively and efficiently creates the
necessary behaviors for the creation of superior value for buyers and, thus, continuous superior
performance for the business.
Market orientation: the culture of a firm is systematically and entirely committed to the continuous
creation of superior customer value.
Companies fail because they listen too carefully to their customers and customers place stringent
limits on the strategies firms can and cannot pursue.
Market orientation is more about:
- Looking for latent needs
- Being proactive
- Focusing on the long term
- Focusing on achieving customer value
- Generating learning behavior (rather than adaptive)
- Using lead users and experiments.
Role of marketing department. Verhoef & Leeflang
The role of the marketing department has been declining. this may hurt firm market orientation
and thus firm long term performance.
Capabilities of marketing department:
- Accountability
- Innovativeness
- Customer connection
- Creativity
- Integration / cooperation with other departments.
, Marketing excellence Homburg
‘A superior ability to perform essential customer-facing activities that improve customer, financial,
stock market and societal outcomes.’
Focus on achieving organic growth, by:
- Marketing ecosystem priority: developing mutually beneficial systems of networks
- End user- priority: engaging with the final customer, who applies or consumes the offering,
and leveraging the final customer insights for growing the business.
- Marketing agility priority: using simplified structures and processes, fast decision-making
and trial and error learning.
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