Summary of Knowledge clips & some notes from lectures - Value based marketing
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Course
Value based marketing (E_EBE2_VBM)
Institution
Vrije Universiteit Amsterdam (VU)
Here is my summary for all of the knowledge clips from chapter 2 until 6 (chapter 1 had no clip) - I added some of my lecture notes into it, which the professor mentioned himself in the lectures in person. I got 9 points with this summary and wish you good luck with your exam :-)
2 Marketing in the business model
2.1 Marketing According to a Value-Creation Perspective
2.2 the business model and Marketing’s Role
2.3 Adapting the business model through Innovation
2.1 Marketing According to a value-creation perspective
Marketing’s value
- In the business model
- For customers
- For the organization as a whole
- Its shareholders
- Other stakeholders
Perceived Value = Benefits (everything u have to gain from it -> product attributes) - Costs
(everything u have to give up getting it)
If the price is higher than what you gain you will not buy it?
What if there are several offerings that provide all of them positive value to me as a
customer – I compare them and as customer, I choose the one which gives me the most
value → relative value
- Perceived worth or desirability of a product or service when compared to other
alternatives in the market
- Assessing the benefits, features, and pricing to similar offerings by competitors
- Concept of relative value: the importance of differentiation and creating a
competitive advantage in the marketplace
Marketing is a cross-functional context: it stretches across the entire supply chain because
marketing is the management of competitive advantage and competitive advantage can
originate anywhere in the supply chain (r&d, sales, production,) –> they increase value
→ customers can say: yeah, their product is so much better than the others because they …
It extends beyond the boundaries of a single department and requires input and involvement
from different areas to achieve marketing objectives effectively.
,CA = Competitive advantage
The cost of making this offer needs to be lower than the price we are charging it otherwise
we are not able to sustain this any long
You need to be better than anybody else in providing customer value but with limited
resources and requirement of profitability → hard balancing act
One of Tesla’s CA is their software
- CA can be everything that provides benefits for the customer and turns the tie to
what the firms are offering
Slide 10
- Effectiveness of offering: to do the right things (to do the things that are important for
your customers and perceive that you are doing it better than others) – if you are the
best and no one knows about then it does not help
- You want to have fun doing it → last a while – protectable and profitable → Efficient
Lusch and Webster:
There are 2 things about value-based marketing:
1. Marketing provides value in other areas and through a network of stakeholders that
co-create value and include partners, shareholders, the government, and society as a
whole
2. It stresses the measurement of marketing’s value: ongoing trend in marketing for
decades – marketing today has to show its benefits in terms of concrete numbers
,Era 1: marketing was about stimulating demand from mainly products
Era 2: satisfying customer needs – value was no longer limited by product itself but included
additional services and customer-company-relationship
Era 3: value-based marketing – not only for customers but also for stakeholders
Value creation at core of marketing
From firm-initiated value creation to co-creation of value
• “Co-created by users of products and services in their interactions with networks of
interdependent resource-providing stakeholders” – Lusch and Webster 2011
What does value-based marketing entail? Distinctive features
• Marketing creates value beyond the customer
o Customer
o Organization
o Shareholders
o Stakeholders
• Value is not only the value of the core product/services
o Value can be created in all interactions with the firm (direct and indirect)
o Value co-creation with customers, partners, stakeholders
o Longitudinal view (“value-in-use” and “value in context”)
• Marketing’s value is made explicit
o Marketing accountability
o Increase of rigor in marketing’s impact measurement
Marketing’s goal: satisfying costumer needs and being profitable at the same time
2.2
The business models
How a company creates value for itself while delivering products or services for customers
, Value creation is done for the customers and is expressed by value proposition – I need to
know the customer needs and preferences, and resources – bringing them together → value
proposition
Value appropriation for firm and shareholders, stakeholders: being effective on the market
and being efficient for yourself, my offering is not for free (I need to make money),
cashflow/profit
A business model is an organizing logic for value creation (for customers) and value
appropriation (from customers, for the firm and its stakeholders)
(1) Sensing: to understand your target group (Customers -> customer value proposition
- The consistently prominent role of Market Orientation (MO)
o Positively affects firm performance (meta-analytic findings)
o The marketing department boosts firm performance because of enhanced MO
o MO positively affects performance in the short and long run
- Enhanced importance of the boundary-spanning role of marketing increases focuses
on:
o Customer experiences
o Customer engagement
o Globalized marketplace, needs to understand cultural differences and global
markets
o Stakeholder orientation
o Sustainability
Today, value is created with the customer
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