CUSTOMER VALUE PROPOSITIONS IN BUSINESS MARKETS

Mansi Patil MMS Marketing 130

TYPES OF VALUE PROPOSITIONS: ALL BENEFITS

All Benefits the customers receive from a market offering.

Customer : Why should our firm purchase your offering? Supplier : Because THIS is all that we can provide to your firm.

Advantage: Simple, Least knowledge about Customers and Competitors required Disadvantage: Benefit Assertion, dilutes POD

TYPES OF VALUE PROPOSITIONS: POINTS OF DIFFERENCE

All favorable Points of difference a market offering has relative to the next best alternative

Customer : Why should our firm purchase your offering instead of your competitors? Supplier : We can provide THIS which they cannot.

Advantage: Very effective Disadvantage: Value presumption

TYPES OF VALUE PROPOSITIONS: RESONATING FOCUS

The one or two points of difference whose improvement will deliver the greatest value to the customer

Customer: What is most worthwhile for our firm to keep in mind about your offering ? Supplier: We give you exactly what you need in a way others cant.

Advantage: Most effective Disadvantage: Requires customer value research

VALUE WORD EQUATION

It enables a supplier to show points of difference and points of contention relative to the next best alternative It expresses in words and simple mathematical operators how to assess the differences in functionality or performance between a suppliers offering and the next best alternative and how to convert those differences into dollars.

E.g. Of Rockwell Automation Solution Power Reduction Cost Savings= [kW spent x no. of operating hrs per yr x $ per kW hr x no. of yrs system solution in operation]Competitors Solution [kW spent x no. of operating hrs per yr x $ per kW hr x no. of yrs system solution in operation]Rockwell Automation Solution

GOOD VALUE PROPOSITION EXAMPLES - VMWARE

For IT organizations wrestling with the high cost and inflexibility of the old one server, one application model, VMWare can improve the efficiency and availability of IT resources and applications through virtualization. VMWare can free your IT admins from spending so much time managing servers rather than innovating. An automated data centre built on the production-proven VMware virtualization platform lets you respond to market dynamics faster and more efficiently than ever before. VMware customers typically save 50-70% on overall IT costs by consolidating their resource pools and delivering highly available machines with VMware vSphere.

ORACLE

One grand example is Larry Ellisons announcement in 2001, that Oracle saved $1 billion by implementing its own solution across the company. The easy way would have been to say Oracles solution saves customers time and money. Not very exciting. But in typical Ellison fashion, he went big. Think about how much resource and focus needed to be dedicated to be able to say four words Oracle Saved $1 Billion.

HFS -

Helps banks pursuing growth through branch expansion to increase sales, productivity, and profitability.

Our software leads your employees through an easy-to-understand series of transaction screens, and then automatically produces the proper documents in the appropriate format based on the transaction information. As a result, you are assured that the documents are accurate and enforceable. HFS products are competitively priced and are available through traditional, subscription-based, or per transaction licensing options. In addition, HFS Professional Services staff is available to manage your implementation in accordance with your schedule, which can take place in as little as four weeks. Between 2001 and 2002, the asset growth for banks that utilize HFS software was more than double the asset growth for banks that did not use our software. We continue to support our customers growth strategies by soliciting suggestions from our 3,000 banks and incorporating these recommendations in our semi-annual product releases.

THANK YOU