Alternative Value Propositions

1. Chapter Eight Alternative Value Propositions

2. Business Strategy Challenges • A real customer value proposition? • A perceived customer value proposition? • Is the value proposition/strategy feasible? • Is the value proposition relevant to customers? • Does it represent a sustainable point of difference?

3. Successful Differentiation Strategies Should: • Generate customer value

4. Successful Differentiation Strategies Should: • Provide perceived value

5. Successful Differentiation Strategies Should: • Provide perceived value Mr. Joe Jones 3256 Main Street Minneapolis 16, Minnesota

6. Successful Differentiation Strategies Should: • Be relevant to consumers

7. Successful Differentiation Strategies Should: • Be difficult to copy (SUSTAINABLE!)

8. Successful Differentiation Strategies Should: • Be difficult to copy (SUSTAINABLE!)

9. Successful Differentiation Strategies Should: • Be difficult to copy (SUSTAINABLE!)

10. Successful Differentiation Strategies Should: • Be achievable

11. Successful Differentiation Strategies Should: • Be achievable

12. Strategic Options Being Global Emotional/ Self-Expressive Benefits Attribute/ Benefit Brand Familiarity Design Value Propositions Quality Systems Solutions Value Corporate Social Programs Niche Specialist Customer Intimacy Figure 8.1

13. Strategic Options Attribute/ Benefit Being Global Emotional/ Self-Expressive Benefits Brand Familiarity Design Value Propositions Quality Systems Solutions Value Corporate Social Programs Niche Specialist Customer Intimacy Figure 8.1

20. Strategic Options Being Global Emotional/ Self-Expressive Benefits Attribute/ Benefit Design Brand Familiarity Value Propositions Quality Systems Solutions Value Corporate Social Programs Niche Specialist Customer Intimacy Figure 8.1

23. Strategic Options Being Global Emotional/ Self-Expressive Benefits Attribute/ Benefit Brand Familiarity Design Value Propositions Systems Solutions Quality Value Corporate Social Programs Niche Specialist Customer Intimacy Figure 8.1

25. Strategic Options Being Global Emotional/ Self-Expressive Benefits Attribute/ Benefit Brand Familiarity Design Value Propositions Quality Systems Solutions Value Corporate Social Programs Niche Specialist Customer Intimacy Figure 8.1

27. Strategic Options Being Global Emotional/ Self-Expressive Benefits Attribute/ Benefit Brand Familiarity Design Value Propositions Quality Systems Solutions Corporate Social Programs Value Niche Specialist Customer Intimacy Figure 8.1

29. Strategic Options Being Global Emotional/ Self-Expressive Benefits Attribute/ Benefit Brand Familiarity Design Value Propositions Quality Systems Solutions Value Customer Intimacy Corporate Social Programs Niche Specialist Figure 8.1

32. Strategic Options Being Global Emotional/ Self-Expressive Benefits Attribute/ Benefit Brand Familiarity Design Value Propositions Quality Systems Solutions Value Corporate Social Programs Niche Specialist Customer Intimacy Figure 8.1

33. Concentrating Resources and Energy Support a Strategic Position Competing With Limited Resources Niche Specialist

34. Product Quality Dimensions Figure 8.3

35. Product Quality Dimensions • Performance Figure 8.3

36. Product Quality Dimensions • Performance • Conformance to specifications Figure 8.3

37. Product Quality Dimensions • Performance • Conformance to specifications • Features Figure 8.3

38. Product Quality Dimensions • Performance • Conformance to specifications • Features • Customer support Figure 8.3

39. Product Quality Dimensions • Performance • Conformance to specifications • Features • Customer support • Process quality Figure 8.3

40. Product Quality Dimensions • Performance • Conformance to specifications • Features • Customer support • Process quality • Aesthetic design Figure 8.3

41. Signals of High Quality • High quality needs to be communicated-quality dimensions • Communication by signals-attributes • Signals: • Tomato Juice—thickness • Cars—sound of door closing • Banking—professional attitude of people • Supermarkets—produce Chapter 8 - Alternative Value Propositions

42. Service Quality • Is largely based on the perceived competence, responsiveness, and empathy of the people with whom the customers interact. • Also, you must manage expectations. Clearly communicate the service promise.

43. Service Quality • Starts with the culture of the company. • Amazon • T. Rowe Price • Marriott

44. Service Quality • Motivate employees to provide great service • Southwest • Enterprise

45. Quality Programs • TQM • ISO 9000 • Six Sigma

46. TQM • Organization-wide efforts to continuously improve and to deliver high-quality products and services to customers. While there is no widely agreed-upon approach, TQM efforts typically draw heavily on the previously developed tools and techniques of quality control. TQM enjoyed widespread attention during the late 1980s and early 1990s before being overshadowed by ISO 9000, Lean manufacturing, and Six Sigma.

47. ISO 9000 • Series of standards, developed by the International Organization for Standardization (ISO), that are used to run a quality assurance system for manufacturing and service industries. •  3rd party certification provides confirmation an organization follows these principles.

48. Six Sigma

49. Six Sigma • Six Sigma is a set of techniques and tools for process improvement. • Developed by Motorola in 1986. • Jack Welch made it central to his business strategy at General Electric in 1995. • Used in many industrial sectors. •  Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects

50. Six Sigma