Title: EIGHT FACETS OF THE VALUE THEORY
1EIGHT FACETS OF THE VALUE THEORY
CULTURE
Organizational Culture
Employee Values
SUPPLIER VALUES
CUSTOMER VALUES
3RD PARTY VALUES
Competitor Values
Owners Values
2Prescription for Customer Accelerated Change
Tools to Leverage the Customers Voice
- WHAT IS OUR CURRENT REALITY ?
- WHERE ARE OUR LEVERAGE POINTS ?
- HOW DO WE OPERATIONALIZE ?
- HOW DO WE SUSTAIN THE CHANGE ?
3VISION
- LONG-TERM
- SOMETHING TO BE PURSUED
- A MOTIVATING STATEMENT
- PROVIDES GUIDANCE/INSPIRATION
47 TOOLS OF CUSTOMER VALUE ANALYSIS
1. Quality Profile
2. Price Profile
3. Value Map
4. Won-Lost
5. Head-to-Head
6. Key Events
7. What/Who
5CUSTOMER VALUE MAP LUXURY CARS
Higher
1.25
Inferior Customer Value
Lexus LS 400
BMW 5-Series
Relative Price
Lincoln Continental
1.25
Acura Legend
Superior Customer Value
.75
Lower
60
80
100
Relative Performance overall score
6quality Service
Product quality
Price
Innovation
Image
CUSTOMER PERCEIVED VALUE
Customer characteristics
Business environment
LOYALTY
Market share and profitability
Shareholder Value
7THE VALUE MATRIX
Well-Intentioned
Value-Creating
High
Purpose
Adversarial
Bureaucratic
Low
Low
High
Process
8VALUE ENABLERS
PEOPLE
TECHNOLOGY
INFORMATION
9THE FOUR STAGES OF QUALITY
Market Perceived Quality vs Compeitor
Customer Value Managment
Conformance Quality
Customer Satisfaction
Customers
Target Market Performance vs Competitors
Quality/Value in Overall Strategic Framework
Internal Operations
Focus
10WHAT IS QUALITY
- Conformance to Requirements/Zero Defects (Crosby)
- Continuous Improvement/Reducing Variation
(Deming) - Fitness for Use (Juran)
- Perceived vs Actual Service Delivery
- Product Performance, Reliability, Durability,
Serviceability, etc. - Ease of Use, Low Maintenance Costs,
- WHAT THE CUSTOMER SAYS IT IS
11WHY TOTAL QUALITY IN MARKETING
- SLOW OR NO GROWTH MARKETS
- MORE DEMANDING CUSTOMERS
- MORE INTENSIVE GLOBAL COMPETITORS
- QUALITY PAYS!!!
- (lower product/service failure rates, higher
quality leads to higher ROI higher quality means
higher customer retention)
12WHY TOTAL QUALITY EFFORTS OFTEN FAIL
- LACK OF TOP MANAGEMENT SUPPORT
- TOTAL QUALITY PROGRAMS ARE OFTEN MOUNTED AS
STAND-ALONE PROGRAMS - (involves a cultural transformation of the entire
organization quality is everyones
responsibility, not just a quality department)) - LACK CUSTOMER FOCUS - RUN AS INTERNAL PROGRAMS
- FAILURE TO ADAPT ORGANIZATIONAL STRUCTURE TO
ACCOMMODATE TOTAL QUALITY INITIATIVES
13(CONT.)
- TOO AMBITIOUS - TRY TO DO TOO MUCH, TOO QUICKLY
- NOT A PROGRAM-of-the-MONTH , RATHER A
BUSINESS-LEVEL STRATEGY - REQUIRES BUY-IN ON THE PART OF EMPLOYEES
- NEEDS TO BE PROPERLY SOLD INTERNALLY (excuse for
downsizing?)
14 The House of Quality
Mgt. System
TQM
Social System
Technical System
Customer Satisfaction
Continuous Improvement
Speaking with Facts
Respect for People
Strategy Management
Individual Task Mgt.
Project Management
Process Management
Strategic Planning
Operations Planning
Project Planning
Quality Planning
15POTENTIAL PRODUCT
THE FOUR PRODUCT LEVELS
AUGMENTED PRODUCT
EXPECTED PRODUCT
CORE BENEFIT
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17STEPS IN PROCESS IMPROVEMENT
- Simplify or Improve the Process
- Evaluate and Monitor Process Improvement ?
18KEYS TO EFFECTIVE IMPLEMENTATION OF TOTAL QUALITY
IN MARKETING
- MEASURE!!! (benchmarking gives you a point of
departure) - TRAIN EMPLOYEES ON USE OF TQ TOOLS
- SHARE INFORMATION
- LOOK AT CUSTOMER AND PROCESS TOGETHER
- TIE REWARDS TO QUALITY GOALS
19RELATIVE TOTAL QUALITY
20Contrasting customer satisfaction and customer
value
21QUADRANT ANALYSIS
Weaknesses
Strengths
Critical
Over-Emphasized Issues
Monitor Importance
Not Important
Very Poor
Excellent
Perception of Performance
22A Satisfied Customer is Loyal
apostle
100 80 60 40 20
Zone of Affection
Zone of Indifference
Loyalty (Retention)
Zone of Defection
terrorist
1 2 3 4 5
extremely satisfied
somewhat dissatisfied
slightly dissatisfied
satisfied
very satisfied
Satisfaction Measure
23CUSTOMER SATISFACTION MEASUREMENT
- Traditional Customer Satisfaction Measurement
(CSM) tends to be misleading - according to
Bain Research, 65-85 percent of customers who
abandon a business report they were either
satisfied or very satisfied - Measuring customer value serves as a better
indicator of long-term customer commitment and
loyalty - Measure not just the foundational (hygiene
factors) but the leverageable aspects of the
product/service (ie., satisfiers) - CSM needs to capture two important items of
information (1) how important each
product/service attribute is (2) how well a
company performs on each product/service
attribute (use Quadrant Analysis)
24Customer Satisfaction/Revenue Enhancement Model
Revenue Enhancement
Increased Loyalty Positive W.O.M. Customer
Retention
Internal Customer Satisfaction
External Customer Satisfaction
Improved Profitability
Reduced Turnover Increased Productivity
25WHAT IS RELATIONSHIP MARKETING?
The creation and retention of profitable
customers through ongoing collaborative business
and partnering activities between a supplier and
a customer on a one-to-one basis for the purpose
of creating superior customer value
Question What 3 Factors Lead to Overall
Customer Satisfaction in Industrial Buyer-Seller
Relationships?
26Practicing Relationship Marketing
- Share Information with Customer
- Look for opportunities to Add Value
- Respond Quickly to Customer Needs
- Apply Mass Customization
- Involve Customer in product/Service/Process
Design - Organize Processes Around Customer
- Track Each Relationship - Est. L.T.V.
- Deliver Differentiated Messages Based on Customer
Characteristics/Preferences
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28Relationship Variables
29Continuum of Relationships
Industry Relationship Bandwidth
Pure Transactional Exchange
Pure Collaborative Exchange
Core Product
Augmented Product
Flaring - Out
Unbundling Strategy
Added Augmentation Strategy
30Stages of Customer Needs
Partnerships with Suppliers
Supplier-Developed Innovations
Customer/Supplier Interaction of the Various Core
Products/Services
Basic Reliable Services Associated with the Core
Products/Sercvices
Core Products and Services That Work
31Transactions vs. Relationships
- SHORT TERM
- LIMITED INTERNAL MARKETING
- MARKETING MIX EMPHASIZED
- BUYER PRICE SENITIVE
- TECHNICAL QUALITY
- FOCUS ON MARKET SHARE
- RESEARCH IS AD-HOC
- LIMITED INTERACTION AMONG FUNCTIONAL AREAS
- LONG TERM
- SUBSTANTIAL INTERNAL MARKETING
- INTERACTIVE MARKETING EMPHASIS
- BUYER LESS PRICE SENSITIVE
- FUNCTIONAL QUALITY
- FOCUS ON SHARE OF CUSTOMER
- RESEARCH IS REAL-TIME
- SUBTANTIAL INTERACTION AMONG FUNCTIONAL
- AREAS
32Key Factors of Successful Customer-Supplier
Relationships
1) Business Expertise (29 )
2) Dedication to Customer (25 )
3) Account Sensitivity and Guidance (23 )
4) Product Performance Quality (10 )
5) Service Dept. Excellence (9 )
6) Confirmation of Capabilities (4)