Criteria of a good theory - ANSWER- Must be possible to test it
- It should survive the test
Value Creation - ANSWER•The process of creating value for customers through the development of new or improved products and services
•Understanding how to provide a differentiated marketing offer.
...
Criteria of a good theory - ANSWER- Must be possible to test it
- It should survive the test
Value Creation - ANSWER•The process of creating value for customers through the development of
new or improved products and services
•Understanding how to provide a differentiated marketing offer.
Value capture - ANSWER• The ability to retain a portion of the value created for customers as profit
•The ability to communicate value effectively
•Accurate pricing, so that price reflects the value provided to customers
Marketing activities (value creation and value capture) - ANSWER- Value creation (buyers)
1. Sensory
2. functional
3. symbolic
These components represent the different ways that a product or service can create value for
customers.
1. Sensory value refers to how a product or service appeals to a buyer's senses, such as sight, sound,
smell, taste, and touch.
2. Functional value refers to how a product or service satisfies a buyer's practical needs or solves a
problem for them.
3. Symbolic value refers to how a product or service conveys a certain image or status to the buyer,
such as a luxury brand.
,- Value capture (sellers):
3 common ways that companies capture value:
- Profits
- market share
- growth
This refers to the increase in sales revenue over time. Companies want to capture value by achieving
sales growth
Categories of value created for buyers: - ANSWER1. Hedonic (emotional)
Hedonic value refers to the emotional benefits that a product or service provides to its buyers. This
type of value is often associated with pleasure, enjoyment, or entertainment. For example, a buyer
may purchase a luxury car not just for its functionality but also for the emotional satisfaction it
provides.
Utilitarian value refers to the functional benefits or economic performance that a product or service
provides to its buyers. This type of value is often associated with the product's usefulness or
effectiveness. For example, a buyer may purchase a car for its reliability and fuel efficiency, which are
utilitarian benefits.
3. Symbolic (self-expression, self-worth)
Symbolic value refers to the self-expression or self-worth that a product or service provides to its
buyers. This type of value is often associated with the product's symbolism or cultural significance.
For example, a buyer may purchase a luxury handbag not just for its functionality but also for the
symbolism and status that it represents.
Value-in-Exchange and Value-in-Use - ANSWERValue-in-exchange and value-in-use are economic
concepts used to understand the value of goods and services in different contexts.
,Value-in-Exchange refers to the economic value that a product or service can be exchanged for in the
market. It is the price that a buyer is willing to pay for a product or service, and it is determined by
the market supply and demand factors. For example, a seller may set a price for a product based on
the production cost, competitor prices, and the perceived value to the buyer.
Value-in-Use refers to the utility or satisfaction that a product or service provides to the buyer. It is
the value that a product or service adds to the buyer's life or business operations. Value-in-use is
subjective and varies from person to person, and it is not directly related to the price of the product.
For example, a car has value-in-use as it provides transportation, convenience, and a means to carry
out activities, while a phone has value-in-use for communication, entertainment, and information
retrieval.
A value element - ANSWERA value element is any potential source of value for customers
Value in use equation - ANSWER(Benefits (A) - Benefits (B)) - (Cost (A) - Cost (B)) - (Price (A) - Price
(B))
a=product of interest
b=next best alternative
The value analysis - ANSWER1. Identify all value elements
2. Estimate magnitude of value elements (e.g. level of improved compliance, increased productivity
etc.)
3. Translate value elements into money
•Improved compliance is translated into a reduced cost.
•Increased productivity drives revenue
•Value that cannot be translated into dollars and cents should be viewed as "value placeholders
4. Build the value model (the value equation)
5. Articulate value proposition(s) that speak to your (different groups of) customers
, 6. Create capabilities necessary and have the job done!
Examples of pricing strategies: - ANSWER- Skimming
Skimming means pricing high and taking a sizable profit margin.
- Penetration
Penetration means pricing as low as possible, primarily to keep potential competitors out of the
market and to quickly take market shares.
Types of Ethics - ANSWER1. Consequence ethics
The alternative is worse (net positive)
Cost-benefit analysis.
This type of ethics is focused on the outcome or consequences of an action. It holds that the morality
of an action is determined by its ability to produce the most good or the least harm for the greatest
number of people
2. Duty ethics
This type of ethics is focused on the inherent morality of an action, regardless of its consequences. It
holds that actions are intrinsically right or wrong based on certain universal principles or duties
Empathized in e.g HM and ericsson:
Rules create a frame for ethical behavior. Workers right.
3. Virtue ethics
Virtue ethics focuses on developing character traits, such as honesty, fairness, and compassion, that
lead to ethical behavior rather than simply following rules or maximizing outcomes.
Duty ethics relies on universal principles or rules to determine ethical behavior, while virtue ethics
focuses on developing virtuous character traits that lead to ethical behavior.
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