Value Based Marketing

P.Doyle “I argue that the purpose of marketing is to contribute to maximising shareholder value and that marketing strategies must be evaluated in terms of how much value they create for investors”

Yesterday… It was possible to talk about marketing that relies mostly on qualitative arguments (erratic arguments about the consumer being satisfied, the growing market share and a soaring company value).

Today … The question arises of how to provide value for customers and shareholders.

Current and potential market Marketing determines market needs and analyses environment Company’s market orientation Marketing sets objectives and determines strategies Objectives and marketing strategy Functional units will have input to devise strategies The strategies of functional units: R&D; Supplies; Production; Logistics; IT; Personnel; Marketing; Sales; Service. Each unit has its role in customer satisfaction Marketing will assist functional units to determine their role in customer satisfaction In the cooperation of all units the best solution will be created Offer: value to the customer The enterprise will evaluate if the needs were met and at what cost Result of the offer: value to the firm Marketing will get feedback and will undertake improvements Feedback to marketing process

Value Proposition: Key Marketing Concept

Value Proposition Definition (I) A clear statement of how company’s product or service: Solves a customer problem Delivers a benefit Improves their situation

Value Proposition Definition (II) 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.

Value Proposition Definition (III) A value proposition is the collection of reasons why a person or company benefits from buying something

Value? What is value? Something of relative worth and importance or desirable; a fair return for goods or services; estimated or appraised worth

Value Proposition 1. Define target audience 2. Understand target: - Issues / problems - Needs - Value 3. How do you help 4.Use their language 5.Craft your value proposition 6.Add additional distinction 7.Test it…Refine it

First WHO, Then What Value is in the eye of the beholder Start with your ideal target client The value proposition needs to speak to some one – your target Varies according to client, segment and timing

Understand Their Issues What are their most pressing issues or problems? What are their pain points? What is keeping them up at night?

What Does Your Target Value? To create a value proposition you need to know what customers value: What do they value? What language do they use describe value? What are the 3 to 7 things they value above all else?

What Do They Value? The answer lies inside customers head. Ask them: Why did they buy? What did you say that persuade them? What stories did you tell? Why did they choose you over everyone else…or doing nothing?

How Do You Help? How does your business solve their problem? What are you promising do for them? (emotional gratification) - Brand Promise

Use Customers Language Translate your selling points (features) into a compelling message (benefits) Do not use industry language or “jargon” Clear always trumps clever

Creating Your Value Proposition Use a 3 part process: Part 1 = Top anxieties target faces Part 2 = Anxiety relief you offer Part 3 = Result target experiences working with you

Test It & Refine It Take your draft and share it Ask or survey clients Test it…do your results improve when using it? T Tweak it and refine it…use it

Template for Strong Value Proposition/Positioning For ____________________(target customer/segment)… …that need _________________(the problem we solve)… Our Brand’s ____________________(the offering)… …provides ____________________(quantified benefit)… …unlike _______________________(next best alternative). We do this by ____________________(how do we do it)… …As demonstrated by ________________(proof points).

Value Propositions: Key Concepts Points of Parity Points of Difference Points of Contention

Points of Parity (POP) POP are associations that are not necessarily unique to the brand but may in fact be shared with other brands. These types of associations come in two basic forms category and competitive. These are features and benefits offered by basically everyone. 

Points of difference (POD) POD attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe that they could not find to the same extent with a competitive brand. Strong, favorable, and unique brand associations that make up points of differences may be based on virtually any type of attribute or benefits. Examples are: FedEx (guaranteed overnight delivery), Nike (performance), Lexus (quality)

Points of Contentions (POC) POC are elements about which the supplier and its customer disagree regarding how their performance or functionality compares with those of the next bets alternatives

http://www.youtube.com/watch?v=kN0SVBCJqLs http://www.youtube.com/watch?v=x7qPAY9JqE4

What the value proposition consists of The value proposition is usually a block of text (a headline, sub-headline and one paragraph of text) with a visual (photo, hero shot, graphics). Headline. What is the end-benefit you’re offering, in 1 short sentence. Can mention the product and/or the customer. Attention grabber. Sub-headline or a 2-3 sentence paragraph. A specific explanation of what you do/offer, for whom and why is it useful. 3 bullet points. List the key benefits or features. Visual. Images communicate much faster than words. Show the product, the hero shot or an image reinforcing your main message.

http://conversionxl.com/value-proposition-examples-how-to-create/

Four Actions Framework: Key to Value Curve Reduce The key to discovering a new value curve lies in answering four basic questions What factors should be reduced well below the industry standard? Eliminate What factors that the industry has taken for granted should be eliminated? Create/Add What factors that the industry has never offered should be created or added? Creating new markets: a new value curve Raise Cirque du Soleil example What factors should be raised well above the industry standard?

Eliminate-Reduce-Raise-Create Star Performers Animal shows Aisle concession sales Multiple show arenas Raise Unique venues Reduce Fun and humor Thrill and danger Create Theme Refined environment Multiple productions Artistic music and dance

The Strategy Canvas of Cirque du Soleil Eliminate Reduce Raise Create high Ringling Brothers Theme Refined Viewing Environment Multiple Productions Artistic Music & Dance Cirque du Soleil offering level Smaller Regional Circus low Price Animal Shows Multiple Show Arenas Thrills & Danger Star Performers Aisle Concessions Fun & Humor Unique Venue © Kim & Mauborgne 2006