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Chapter 8 - Alternative Value Propositions PPT 8-1 Alternative Value Propositions Chapter Eight Copyright © 2007 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful. Requests for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.

Business Strategy Challenges : 

Chapter 8 - Alternative Value Propositions PPT 8-2 Business Strategy Challenges A real customer value proposition? A perceived customer value proposition? Is the value proposition feasible? Is the value proposition relevant to customers? Does it represent a sustainable point of difference?

Strategic Options : 

Chapter 8 - Alternative Value Propositions PPT 8-3 Strategic Options Value Propositions Figure 8.3 Being Global Emotional/ Self-Expressive Benefits Brand Familiarity Quality Value Niche Specialist Customer Intimacy Corporate Social Programs Systems Solutions Attribute/ Benefit Design

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Chapter 8 - Alternative Value Propositions PPT 8-4 Niche Specialist

Product Quality Dimensions : 

Chapter 8 - Alternative Value Propositions PPT 8-5 Product Quality Dimensions Performance Conformance to specifications Features Customer support Process quality Aesthetic design Figure 8.2

Signals of High Quality : 

Chapter 8 - Alternative Value Propositions PPT 8-6 Signals of High Quality High quality needs to be communicated Communication by signals Signals: Tomato Juice—thickness Cars—sound of door closing Banking—professional attitude of people Supermarkets—produce

Stock Market Reaction to Brand Equity (BE) & ROI : 

Chapter 8 - Alternative Value Propositions Stock Market Reaction to Brand Equity (BE) & ROI Stock Return Figure 8.3

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Chapter 8 - Alternative Value Propositions PPT 8-8 Figure 8.4 The Value Option No-Frills Scale Experience Products/ Operations Economies Curve Services Effect Value Perceptions Cost Advantage Low-Cost Culture The Value Option Imperatives

Creating a Cost Advantage(or Avoiding a Cost Disadvantage) : 

Chapter 8 - Alternative Value Propositions PPT 8-9 Creating a Cost Advantage(or Avoiding a Cost Disadvantage) No-Frills Product/Service Operations Scale Economies The Experience Curve

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Chapter 8 - Alternative Value Propositions PPT 8-10 Key Learnings Business strategies usually cluster around a limited number of value propositions, such as superior attribute, appealing design, offering complete system solutions, social responsibility, a familiar brand, a superior customer relationship, a specialist niche, superior quality, and superior value. A value proposition needs to be communicated effectively and supported by a cost advantage, which can be based on a no-frills offering, operations, scale economies, and/or the experience curve. Superior quality, which has been shown to drive stock return, has to be continuously addressed through processes and programs and transferred into quality perceptions.

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Chapter 8 - Alternative Value Propositions PPT 8-12 Ancillary Slides

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Chapter 8 - Alternative Value Propositions PPT 8-13 “Ever since Morton’s put a little girl in a yellow slicker and declared, “When it rains, it pours,” no advertising person worth his or her salt has had any excuse to think of a product as having parity with anything.” Malcolm MacDougal, Jordan Case McGrath

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Chapter 8 - Alternative Value Propositions PPT 8-14 “If you don’t have a competitive advantage, don’t compete.” Jack Welch, GE

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Chapter 8 - Alternative Value Propositions PPT 8-15 “You can’t depend on your eyes when your imagination is out of focus.” Mark Twain

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Chapter 8 - Alternative Value Propositions PPT 8-16 “Be willing to make decisions. That’s the most important quality in a good leader. Don’t fall victim to what I call the ‘ready-aim-aim-aim syndrome.’ You must be willing to fire.” -T. Boone Pickens

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Chapter 8 - Alternative Value Propositions PPT 8-17 “The first man gets the oyster, the second man gets the shell.” - Andrew Carnegie

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Chapter 8 - Alternative Value Propositions PPT 8-18 “Never follow the crowd.” - Bernard M. Baruch