Principles of Marketing| Richa Saxena

Session 6

VALUE DELIVERY
PROCESS
Value Delivery Process
Recently, due to the pandemic, when consumers are preferring healthy products, several companies
have added a health and wellness portfolio to their product offerings.

Asian Paints created a new “Health and Hygiene” segment, that offers an anti-bacterial range of
wall paints, disinfectants and sanitisers, and masks and PPEs. According to the company website,
Royal Anti-bacterial wall paints are, “A revolutionary indoor Anti-Bacterial paint, Royale Health
Shield Luxury Emulsion is equipped with Silver
Ion Technology which kills 99% of infection-
causing bacteria on the painted surfaces and
providing a more hygienic environment at home.
This healthy paint also improves indoor air quality
by reducing formaldehyde, a source of indoor air
pollution.” Picture 6.1 shows the communication
showing the value (Asian Paints, 2021).

IKEA, a Swedish furniture company, keeps up its

vision of creating a better everyday life for more
people. They create their products by closely
monitoring the customers and their needs.

A value proposition can also be defined as an idea

that is designed carefully to engage the consumer
with functional and emotional appeals. The next
task is to convert this idea into a plan of action.
Picture 6. 1 Asian Paints Value Section, Creation, The value delivery process is the stepwise plan of
Communication and Delivery
action that executes the idea designed as the value
proposition.

The steps involved in the value delivery process are

1. Selecting the value
2. Creating the value
3. Communicating the Value
4. Delivering the Value
5. Capturing the value back from the Market
6. Enhancing the Value

1
 Principles of Marketing| Richa Saxena

Selecting the Value

The process of value selection involves careful assessment of elements that can be appreciated by
customers. The company may initially identify several factors that can add value to the marketing
offer. For example, a tea brand may want to add many associations like taste, fragrance, freshness,
aroma, health, lifestyle, social, party, family, and so on. Out of all the factors or elements identified,
only a few shall be selected as the value proposition. Picture 6.2 displays the print advertisement of
Red Label Tea “Natural Care” showing its ingredients.

The marketers need to prioritise the value best desired by the consumers. The assessment of the
customer's perceived value can be done through market research and competitor analysis. The
objective of this exercise is to seek maximum
customer satisfaction by meeting customer
expectations. Also, the value proposition should be
designed from a long-term perspective and should
not be changed often.

The number of elements to be selected in the value

proposition must be decided on the EPI (Evaluate,
Prioritise, and Improvise) principle. The company
must be careful that it should select an optimum
number of elements.

Each element of value has its own cost. Hence it is

advisable to work on ROIs of the value element. Too
many elements can confuse and also it is not easy to
recover their cost. Too few elements lead to a narrow
position, that is difficult to sustain in the long run
and may not be transferable to other segments.

Article 6.1 is taken from a survey report published

in the Economic Times Brand Equity, which
outlines how value creation happens in the case of
Picture 6. 2 Careful Selection of Value Component music apps.

Saavn (13%) are some of the other apps used

often to enjoy music.

Interestingly, while the usage of music apps is

Article 6.1
Top music apps of India
(2019)
Around a quarter of Indians (23%) claim
YouTube Music is the most frequently used
app by them to listen to music, YouGov’s last
year’s research reveals. After YouTube, Gaana
(17%), Google Play Music (13%), and Jio
2
similar for men and women for almost all
apps, a higher number of men than women use
Jio Saavn regularly (17% vs 9%) while more
women than men are frequent users of
Amazon Prime Music (13% vs 8%). For close
to half of those who use YouTube Music
commonly, access to the latest soundtracks
(49%) is the biggest reason for indulging in the
platform. However, more people are drawn to
YouTube Music than other music apps
because of the ability to share music through
the app (47%). Similarly, Spotify enjoys a
prevalence over other music streaming apps

when it comes to playlists. 62% of Indians use
Spotify for their personalised playlist
recommendations. Furthermore, another 54%
prefer it because of its user-friendly interface,
the report said. For Amazon Prime Music, an
ad-free experience is the main pull for users
(said by 60%) but many (42%) consider it for
its featured list of international artists.
YouGov data shows that out of the people who
currently use apps to stream music, a majority
(77%) enjoy free versions of the apps while few
(23%) prefer paid subscriptions instead. Out of
the ones using YouTube Music, only 11%
subscribe to the paid model as compared to the
whopping 89% that use the free version. The
Discussion 6.1 Identify the components of the Customer Value Proposition for the
Music App industry.
Principles of Marketing| Richa Saxena
numbers are similar for other frequently used
apps –such as with Google Play (92% free vs
8% paid users of the app) and Jio Saavn (82%
vs 18%).
Having said that, some platforms have won
consumers with their paid offering and more
than seven in ten (71%) users of Amazon
Prime Music are currently signed to the paid
subscription of the app. Inclusion in the
Amazon Prime Play package could be a reason
for the high number of subscribers. Similarly,
out of the total current users of Spotify and
Gaana, 22% and 25%, respectively, are paid
users of the app (ET Brand equity, 2019).

Creating the Value

Traditional marketers used to believe that the value is embedded in products and services offers. It
cannot be created separately. Also, the role of the exchange process in value was not paid attention
to.

In modern marketing, the value creation process is carefully done by analysing the demand and
preference of the target audience. The entire company – all departments, functions, and activities –
are involved in the task. Technology, design, R & D, engineering, manufacturing, finance, and
marketing, all have a role. Royal Caribbean is the world’s biggest cruise liner. Their ship Quantum
of the Seas, designed with the Chinese guests in mind, is a fully immersive ship, complete with a
Mandarin-speaking crew and local cuisines served on-board (Royal Caribbean, 2014).

Amazon Prime is another example, where the company has clubbed various benefits under Prime
membership. As illustrated in Picture 6.3, Prime membership includes OTT platform and music
subscription, and fast delivery.

Picture 6. 3 Amazon Prime benefits

3
 Principles of Marketing| Richa Saxena

Communicating the Value

The company communicates the offering to the customers through the Integrated Marketing
Communications Program, where different options like TV, internet, radio, magazine, and billboards
are used for communications. The company may also employ a sales force to convince the customer
personally in case of new and innovative products. Cause Marketing or CSR is a very powerful mode
of communication. In the recent Asian Paint advertisement to Royale Health Shield paint with Anti-
Bacterial technology a story was created of a paint that cares for you through two friends who care
for each other. While the intention was emotional, the tonality was playful between the two
powerhouse actors in Deepika and Ranbir.

Delivering the Value

This deals with the physical distribution of the value. The promised value needs to be delivered so
that the value claim is justified. For example, Big Basket and Godrej Nature’s Basket are home
delivering not only fresh vegetables but frozen items also. With the increased number of such
specialized e-grocers and e- retailers, physical distribution has become very important and hence
logistics and supply chain management.

The task of distribution channel management is

becoming more challenging as the e-retailers are
promising their customers speedy delivery.
Other marketing facilitators influence the task
of delivery like transport companies and
insurance companies.

Delivering the value can also be understood as

the moment of truth of many service providers,
Picture 6. 4 Starbuck's Personalised Service where the service is produced during the
customer experience within. McDonald’s follows
high service quality. As shown in Picture 6.4, Starbucks aims at giving high personalised service to
its customers.

Capturing the Value back for the Company from the Market
Over some time, the company attempts at getting its due share from the value. The value is captured
back through value pricing. The company
identifies the features that customers value
and design a very strong pricing strategy
around it. One of the examples is sachets
marketing. Marketing of shampoos and
similar products through sachet is an
innovative “offer value and capture value”
process (Ramaswamy & Namakumari,
2018, p. 31). Picture 6. 5 Horlick's Sachets

Recently, the sachet market has expanded to products like washing powders, cooking oils, ghee, face
creams, and tea bags. The sachet marketing gave a unique opportunity to many customers to try the
company’s products. And with this, the companies too captured good value for themselves from the
market through volume.

4
 Principles of Marketing| Richa Saxena

Enhancing the Value

The company continuously and proactively enhances the value of its offer. Augmenting continuously
the value in its offers, helps the company to stay modern and contemporary in the market. The
company keeps on measuring customer satisfaction through feedback to improve upon the current
offerings. At the same time competing and substitute products also give a challenge to the company.
Value enhancement hence is done not only at the incremental level but continuous product
development is also a part of value enhancement.

Discussion 6.2 Discuss the Value delivery process for Netflix.

Co-Creating Value with the Customer

Co-creation is a process where the inputs are invited from the customers through contests for product
designing, logo designing, advertisements, and content writing, and so on. The idea of co-creation is
not only a very cost-effective way of getting customer insight but also an important promotional tool.

Today’s consumers are also willing to be a part of the value creation process. The shift began in the
late 1990s when a few pioneers began to let customers participate in product development. Lego, for
example, invited consumers to create designs of toy robots and construction models, write
applications for the robots, and offer them to other consumers on its website. Over the past decade,
dozens of other firms—including Cisco, Dell, Procter & Gamble, Sony, Starbucks, and Unilever—
have embraced “customer co-creation” and discovered something crucial: Generating new
experiences for end customers often requires designing better experiences for internal players, a fact
frequently overlooked in conventional process analysis.

A far better way to design new customer experiences is an organized process of experimentation
where customers and companies progressively evolve existing offerings into new ones.

Starbucks took a long time before settling on the customer experience it currently provides. The first
stores, originally called Il Giornale, were pompous Italian places where the whole menu was in
Italian, customers could not sit down, baristas were fully dressed up, and loud Italian opera music
hindered any socialization. Now, Starbucks encourages dialogue across all its stakeholders through
the highly popular mystarbucksidea.com website. 3M invites its B2B customers to co-create new
products with its R&D people live in their corporate labs. Apple invites third parties to develop new
applications for its iPhones, iPads, and iPods (Ramaswamy & Gauillart, 2010). User-generated
content also known as UGC is a great way to co-create. Article 6.2 brings you the top UGC of pre-
COVID 2020 (Rindfleisch, 2020).

Tapping into the power of peer

recommendations is the best way to market
your brand to your target audience. After all,
customer reviews are more impactful than
promoted content by brands.

Getting your users to feature your brand

Article 6.2 and/or products in their content comes with its
own set of benefits. Firstly, user-generated
The top UGC content campaigns can help you establish the
The best way to market your brand is to bring trust of your target audience through brand
your customers to become brand advocates. features in user content. Brand features also

5

help in increasing your brand exposure. The
more exposure for your brand, the better
brand awareness and reach on the platform.
User-generated content also adds to the
diversity of content on your feed.
Various brands have been tapping into the
potential of user-generated content to push for
better traction on social media. Some brands
are using hashtag-based user-generated
content. Some other brands are posting users’
content that they were tagged in. Some brands
only populate their feed with users’ content.
Content is king, and if you want to create good
user-generated content, you need to have a
good idea about what your audience likes. You
can use a social media tool that helps you
uncover analytics about your social media
activity. Based on insights derived using the
social media tool, you can understand what is
working for your brand and what isn’t.
1. AirBnB
Airbnb has had one of the most popular and
trendsetting user-generated content
campaigns. The entire Instagram feed of
AirBnB is full of user-generated content.
Airbnb asks its users to share their content by
simply tagging them. Airbnb then posts the
tagged pictures on Instagram. Sharing users’
posts directly, from their Instagram account
adds a good level of authenticity.
Instead of sharing glossy marketing content,
the brand focuses on sharing the content of
users who have been there and experienced
the stay. Every UGC post that AirBnB shares
on Instagram are of top-notch quality, which
not only attracts the audience to further
explore their feed but also pushes them to go
for an Airbnb stay.
Airbnb makes sure to reward every user by
giving them credit for their pictures on
Instagram. This further encourages other
users to share their content on the platform.
Picture 6.6 is an example of a posting on the
Airbnb page.
6
Principles of Marketing| Richa Saxena
Picture 6. 6 Customer Experiences
2. ASOS
This fashion e-commerce website tries to
power its Instagram feed by employing its
hashtag-based user-generated content
campaign. Posting pictures of users donning
clothes from the online multi-brand stores,
ASOS attempts to attract users to their brand.
ASOS created a hashtag campaign,
#AsSeenOnMe and asked users to post
content featuring their brand along with this
hashtag. Instead of sharing pictures of
groomed models, ASOS shares content
straight from users’ feeds. The audience
relates more to their peers and so, by sharing
user-generated content, the brand creates a
campaign with better potential to reach
audiences.
3. Visit Singapore
User-generated content campaigns are not
only for brands. Singapore’s Tourism Board is
promoting the country’s tourism on its official
Instagram handle through a UGC campaign.
The brand shares content posted by other
users on the platform, picture 6.7, while also
giving them the credit for their pictures.
Picture 6. 7 Visit Singapore

As their Instagram bio reads, Visit Singapore
asks their audience to either tag them or add
the hashtags ‘#PassionMadeImpossible or
#VisitSingapore’ to allow users to repost
content.
Using UGC, Visit Singapore attracts followers
to their content on the platform.
4. Adobe
Another brand acing User-generated content
is Adobe. This brand constantly runs user-
generated content campaigns based on
branded hashtags to create content on the
platform. Most recently, on the occasion of
pride month, Adobe has created a UGC
campaign based on the branded hashtag
‘#Adobe_PridePortrait’.
Previously, Adobe has run UGC campaigns
around the hashtags – ‘#Adobe_Aerial’,
‘#Adobe_Wild’, and so on. Not only does it help
them create an attractive feed, but also helps
them create a connection with the audience by
helping them share their content.
5. GoPro
GoPro is another brand that has plunged into
user-generated content for their Instagram
feed.
The brand posts high-quality photos shared by
users on the platform. Running the hashtag-
based UGC campaign, #GoPro, the brand
demonstrates the use of the product through
the pictures as picture 6.8. In the process, the
brand persuades the audience to invest in
their products.
Picture 6. 8 Go Pro
6. NYX Cosmetics
NYX Cosmetics is also posting user-generated
content to power up its brand. The brand asks
7
Principles of Marketing| Richa Saxena
its users to tag it in content that features their
products. Then they post the user-generated
content they are tagged in.
Look at the Instagram feed of NYX Cosmetics
and you will see a whole range of appealing
and creative posts by different users. Each of
these posts features the brand’s products.
7.Nike
It is very well known that the ‘swoosh’ logo
brand, Nike does a lot of creative marketing
campaigns to promote their products. This
includes doing user-generated campaigns
from their creative arsenal. One of which was
Nike’s “Better For It” women empowerment
campaign.
Picture 6. 9 Nike Women
The Better For It campaign from their
women’s apparel stores got a lot of traction.
Nike encouraged women to share their
workout, health, and fitness goals on its
nikewomen page as shown in picture 6.9. They
worked with their existing world-class female
brand ambassadors as well as female
customers across the globe.
This campaign delivered a positive message by
encouraging women to take good care of their
bodies. Nike built a community for women
spreading the message of health and fitness.
Like always, this user-generated campaign
gave a boost to what the Nike brand stands for
– celebrating, respecting athletes, and
encouraging athleticism.
SUMMING IT UP
User-generated content is a great format to
experiment with. Users’ content featuring
your brand and/or products helps you
establish trust for your brand. It also helps
you increase brand exposure. With the help of
a good social media analytics tool, you can
 Principles of Marketing| Richa Saxena
measure your growth on the platforms. Here  Adobe’s constantly changing hashtags-
is a quick round-up of some of the top UGC based user-generated content
campaigns of all time- campaigns
 GoPro’s hashtag-focused user-
 Airbnb's Instagram feed populated
generated content aims to attract
completely with user-generated
customers through content created
content featuring great homestays and
using the brand’s product (s)
vacation homes
 NYX Cosmetics posting creative
 ASOS’s hashtag campaign aims to
content by their users to create a
bring more customers on-board
colorful, attractive feed
through posts featuring users donning
 Nike’s ‘Better for It’ women
clothes from the online apparel store
empowerment campaign encouraging
 Visit Singapore’s smart hashtag and
women to take care of their body and
@tag-based user-generated campaign
health
to promote the country’s tourism
(Rindfleisch, 2020)

Co-Creation Advantages
Customer co-creation is central to the Network Orchestration business model. Research shows that
companies that facilitate a network of co-creators deliver shareholder value two to four times greater
than companies that don’t leverage co-creation business models. We see four main reasons for this
value gap:

Greater revenue growth: As co-creating partners, customers have an incentive to help

grow the business. Your success is theirs, whether the rewards are monetary or intangible.
Cocreation is less a measure of “customer loyalty” than an indicator of “reciprocal loyalty,” where
both parties serve each other.

Lower marginal cost: Your customer co-creators bring an entirely new set of assets to
the company, at a very low or near-zero cost. They may be willing to share their opinions, skills,
relationships, and even their real assets (cars, apartments, etc.) for the right incentives and shared
value.

Improved customer insight: The increased customer intimacy that comes with co-
creation deepens your understanding of your market, enabling you to serve it better. When
customers co-create and have a vested interest in its success, they are more willing to share personal
data and other assets with it.

Increased organizational flexibility: A network of customer co-creators

increases the company’s adaptability and speed. This network is distributed and self-organizing,
which makes it highly responsive to changing customer needs. When a new vacation hotspot
emerges, Airbnb does not need to change its supply chain or purchase new properties; instead, its
co-creation network naturally expands to satisfy the demand (Libert, Wind, & Beck, 2015)

Discussion 6.2 Create a co-creation model for Maggi Noodles.

8
 Principles of MarketingPrinciples of Marketing | Richa Saxena
Article 6.3
Co-Creation Practices
Lego gives us perhaps one of the most famous
examples of co-creation, with its ‘Ideas’
platform allowing customers to directly post
their designs for new playsets, with the
projects that receive over 10,000 votes then
being considered for production. As well as the
sheer joy that comes along with creating their
own set, the winner also receives 1% of net
sales, giving them a monetary incentive for
participation too.
Picture 6. 10 A Lego Design Contest Winner
For Lego, the benefits include guaranteed
positive feedback (and the ability to see what
kinds of products fans like) and a continuous
pool of fresh and creative ideas to draw from.
In turn, this helps to create additional value
for consumers, for both those who submit
ideas as well as fans who see an idea they have
voted for come to fruition. In a report by
Hitachi, it was revealed that 57% of survey
respondents said co-creation has transformed
their company’s industry, where 83% of
respondents from this sector agree.
9
BMW is one automotive brand that has used
co-creation to drive innovation. Its ‘Co-
Picture 6. 11 Parcelcopter
Creation Lab’ is a virtual community created
way back in 2010 whereby consumers can offer
their opinions on designs, submit their ideas,
and get involved in the creation process of
vehicles. In doing so, this means that
consumers are invested in the design process
from start to finish, giving them a real
incentive to find out more and potentially
purchase the final vehicle.
Co-creation doesn’t only apply to products.
DHL, a division of mail and logistics services
company Deutsche Post, shows that it can also
help to improve overall services. To find out
how the company could improve its logistics,
for example, it invited several consumers to
‘innovation centres’ in Germany and
Singapore to talk with employees and
brainstorm new ideas.
One of the outcomes was Parcelcopter – an
initiative that uses drones for ‘last mile’
deliveries.
The aim was to deliver packages to places with
difficult terrains and in challenging weather
conditions, as well as dramatically reduce the
time it takes to do so.
As well as a successful project (Parcelcopter
passed its three-month trial), DHL’s co-
creation efforts also generated success in other
ways. According to Forbes, customer
satisfaction scores rose to over 80%, and the
brand generated a higher level of customer
retention as a result. This proves the extent to
 Principles of Marketing| Richa Saxena

which involving customers can generate

positivity, and instill greater levels of trust in
the long run. (Gilliland, 2018)

Discussion 6.3 Find one example of co-creation. Explain tangible and intangible
value features with respect to your example.

References
Asian Paints. (2021). Health Shield. Retrieved from Asian Paints:
https://www.asianpaints.com/healthshield.html

ET Brand equity. (2019, December 12). YouTube, Gaana lead top music apps of India. Retrieved
from ET Brand equity:
https://brandequity.economictimes.indiatimes.com/news/digital/youtube-gaana-lead-top-
music-apps-of-india/72487610

Gilliland, N. (2018). Lego to BMW: How brands have used co-creation to earn consumer trust.
Retrieved from EcoConsultancy: https://econsultancy.com/lego-to-bmw-how-brands-have-
used-co-creation-to-earn-consumer-trust/

Libert, B., Wind, Y. (., & Beck, M. (2015). What Apple, Lending Club, and AirBnB Know About
Collaborating with Customers. Retrieved from Harvard Business Review:
https://hbr.org/2015/07/what-apple-lending-club-and-airbnb-know-about-collaborating-with-
customers

Ramaswamy, V. S., & Namakumari, S. (2018). Marketing Management Gloabl Perspective Indian
Context. Noida: McMilllan.

Ramaswamy, V., & Gauillart, F. (2010). Building the Co-Creative Enterprise. Retrieved from
Harvard Business Review: https://hbr.org/2010/10/building-the-co-creative-enterprise

Rindfleisch, A. (2020). Optional Resources for GoPro case study. Retrieved from Coursera:
https://www.coursera.org/learn/marketing-digital/home/welcome

Royal Caribbean. (2014). Quantum of the Seas. Retrieved from

https://www.royalcaribbean.com/cruise-ships/quantum-of-the-seas

10