Customer Value Propositions in Business Markets

Customer Value Propositions in Business Markets by JAMES C. ANDERSON, JAMES A. NARUS, AND WOUTER VAN ROSSUM Under pressure to keep costs down, customers may only look at price and not listen to your sales pitch. Help them understand – and believe in – the superior value of your offerings. â€Å"CUSTOMER VALUE PROPOSITION† has become one of the most widely used terms in business markets in recent years. Yet our management-practice research reveals that there is no agreement as to what constitutes a customer value proposition – or what makes one persuasive. Moreover, we ? d that most value propositions make claims of savings and bene? ts to the customer without backing them up. An offering may actually provide superior value – but if the supplier doesn’t demonstrate and document that claim, a customer manager will likely dismiss it as marketing puffery. Customer managers, increasingly held accountable for reducing costs, don’t have the l uxury of simply believing suppliers’ assertions. PETER HOEY march 2006 91 C u s t o m e r Va l u e P ro p o s i t i o n s i n B u s i n e s s M a r ke t s Take the case of a company that makes integrated circuits (ICs).It hoped to supply 5 million units to an electronic device manufacturer for its next-generation product. In the course of negotiations, the supplier’s salesperson learned that he was competing against a company whose price was 10 cents lower per unit. The customer asked each salesperson why his company’s offering was superior. This salesperson based his value proposition on the service that he, personally, would provide. Unbeknownst to the salesperson, the customer had built a customer value model, which found that the company’s offering, though 10 cents higher in price per IC, was actually worth 15. cents more. The electronics engineer who was leading the development project had recommended that the purchasing manager buy those ICs, even a t the higher price. The service was, indeed, worth something in the model–but just 0. 2 cents! Unfortunately, the salesperson had overlooked the two elements of his company’s IC offering that were most valuable to the customer, evidently unaware how much they were worth to that customer and, objectively, how superior they made his company’s offering to that of the competitor. Not surprisingly,We conducted management-practice research over the past two years in Europe and the United States to understand what constitutes a customer value proposition and what makes one persuasive to customers. One striking discovery is that it is exceptionally dif? cult to ? nd examples of value propositions that resonate with customers. Here, drawing on the best practices of a handful of suppliers in business markets, we present a systematic approach for developing value propositions that are meaningful to target customers and that focus suppliers’ efforts on creating super ior value.Three Kinds of Value Propositions We have classi? ed the ways that suppliers use the term â€Å"value proposition†into three types: all bene? ts, favorable points of difference, and resonating focus. (See the exhibit â€Å"Which Alternative Conveys Value to Customers? †) All bene? ts. Our research indicates that most managers, when asked to construct a customer value proposition, simply list all the bene? ts they believe that their Customer managers, increasingly held accountable for reducing costs, don’t have the luxury of simply believing suppliers’ assertions. hen push came to shove, perhaps suspecting that his service was not worth the difference in price, the salesperson offered a 10-cent price concession to win the business – consequently leaving at least a half million dollars on the table. Some managers view the customer value proposition as a form of spin their marketing departments develop for advertising and promotional copy. T his shortsighted view neglects the very real contribution of value propositions to superior business performance. Properly constructed, they force companies to rigorously focus on what their offerings are really worth to their customers.Once companies become disciplined about understanding customers, they can make smarter choices about where to allocate scarce company resources in developing new offerings. offering might deliver to target customers. The more they can think of, the better. This approach requires the least knowledge about customers and competitors and, thus, the least amount of work to construct. However, its relative simplicity has a major potential drawback: bene? t assertion. Managers may claim advantages for features that actually provide no bene? to target customers. Such was the case with a company that sold highperformance gas chromatographs to R&D laboratories in large companies, universities, and government agencies in the Benelux countries. One feature of a particular chromatograph allowed R&D lab customers to maintain a high degree of sample integrity. Seeking growth, the company began to market the most basic model of this chromatograph to a new segment: commercial laboratories. In initial meetings with prospective customers, the ? rm’s James C. Anderson is the William L.Ford Distinguished Professor of Marketing and Wholesale Distribution at Northwestern’s Kellogg School of Management in Evanston, Illinois; the Irwin Gross Distinguished ISBM Research Fellow at the Institute for the Study of Business Markets in University Park, Pennsylvania; and a visiting research professor at the School of Business, Public Administration, and Technology at the University of Twente, the Netherlands. James A. Narus is a professor of business marketing at the Babcock Graduate School of Management at Wake Forest University in Charlotte, North Carolina.Wouter van Rossum is a professor of commercial and strategic management at the School of Business, Public Administration, and Technology at the University of Twente. 92 harvard business review C u s t o m e r Va l u e P ro p o s i t i o n s i n B u s i n e s s M a r ke t s Which Alternative Conveys Value to Customers? Suppliers use the term â€Å"value proposition† three different ways. Most managers simply list all the bene? ts they believe that their offering might deliver to target customers. The more they can think of, the better.Some managers do recognize that the customer has an alternative, but they often make the mistake of assuming that favorable points of difference must be valuable for the customer. Best-practice suppliers base their value proposition on the few elements that matter most to target customers, demonstrate the value of this superior performance, and communicate it in a way that conveys a sophisticated understanding of the customer’s business priorities. VALUE PROPOSITION: ALL BENEFITS FAVORABLE POINTS OF DIFFERENCE All favorable po ints of difference a market offering has relative to the next best alternativeRESONATING FOCUS Consists of: All bene? ts customers receive from a market offering The one or two points of difference (and, perhaps, a point of parity) whose improvement will deliver the greatest value to the customer for the foreseeable future Answers the customer question: â€Å"Why should our ? rm purchase your offering? † â€Å"Why should our ? rm purchase your offering instead of your competitor’s? † â€Å"What is most worthwhile for our ? rm to keep in mind about your offering? † Requires: Knowledge of own market offering Knowledge of own market offering and next best alternativeKnowledge of how own market offering delivers superior value to customers, compared with next best alternative Has the potential pitfall: Bene? t assertion Value presumption Requires customer value research salespeople touted the bene? ts of maintaining sample integrity. Their prospects scoffed a t this bene? t assertion, stating that they routinely tested soil and water samples, for which maintaining sample integrity was not a concern. The supplier was taken aback and forced to rethink its value proposition. Another pitfall of the all bene? ts value proposition is that many, even most, of the bene? s may be points of parity with those of the next best alternative, diluting the effect of the few genuine points of difference. Managers need to clearly identify in their customer value propositions which elements are points of parity and which are points of difference. (See the exhibit â€Å"The Building Blocks of a Successful Customer Value Proposition. †) For example, an international engineering consultancy was march 2006 bidding for a light-rail project. The last chart of the company’s presentation listed ten reasons why the municipality should award the roject to the ? rm. But the chart had little persuasive power because the other two ? nalists could make mos t of the same claims. Put yourself, for a moment, in the place of the prospective client. Suppose each ? rm, at the end of its presentation, gives ten reasons why you ought to award it the project, and the lists from all the ? rms are almost the same. If each ? rm is saying essentially the same thing, how do you make a choice? You ask each of the ? rms to give a ? nal, best price, and then you award the project to the ? rm that gives the largest price concession.Any distinctions that do exist have been overshadowed by the ? rms’ greater sameness. 93 C u s t o m e r Va l u e P ro p o s i t i o n s i n B u s i n e s s M a r ke t s Favorable points of difference. The second type of value proposition explicitly recognizes that the customer has an alternative. The recent experience of a leading industrial gas supplier illustrates this perspective. A customer sent the company a request for proposal stating that the two or three suppliers that could demonstrate the most persuasive v alue propositions would be invited to visit the customer to discuss and re? e their proposals. After this meeting, the customer would select a sole supplier for this business. As this example shows, â€Å"Why should our ? rm purchase your offering instead of your competitor’s? † is a more pertinent question than â€Å"Why should our ? rm purchase your offering? † The ? rst question focuses suppliers on differentiating their offerings from the next best alternative, a process that requires detailed knowledge of that alternative, whether it be buying a competitor’s offering or solving the customer’s problem in a different way.Knowing that an element of an offering is a point of difference relative to the next best alternative does not, however, convey the value of this difference to target customers. Furthermore, a product or service may have several points of difference, complicating the supplier’s understanding of which ones deliver the grea test value. Without a detailed understanding of the customer’s requirements and preferences, and what it is worth to ful? ll them, suppliers may stress points of difference that deliver relatively little value to the target customer. Each of these can lead to the pitfall of value presumption: assuming that favorable points f difference must be valuable for the customer. Our opening anecdote about the IC supplier that unnecessarily discounted its price exempli? es this pitfall. Resonating focus. Although the favorable points of difference value proposition is preferable to an all bene? ts proposition for companies crafting a consumer value proposition, the resonating focus value proposition should be the gold standard. This approach acknowledges that the managers who make purchase decisions have major, ever-increasing levels of responsibility and often are pressed for time.They want to do business with suppliers that fully grasp critical issues in their business and deliver a customer value proposition that’s simple yet powerfully captivating. Suppliers can provide such a customer value proposition by making their offerings superior on the few elements that matter most to target customers, demonstrating and documenting the value of this superior performance, and communicating it in a way that conveys a sophisticated understanding of the customer’s business priorities. This type of proposition differs from favorable points of difference in two signi? cant respects.First, more is not better. Although a supplier’s offering may possess several favorable points of difference, the resonating focus proposition steadfastly concentrates on the one or two points 94 of difference that deliver, and whose improvement will continue to deliver, the greatest value to target customers. To better leverage limited resources, a supplier might even cede to the next best alternative the favorable points of difference that customers value least, so that th e supplier can concentrate its resources on improving the one or two points of difference customers value most.Second, the resonating focus proposition may contain a point of parity. This occurs either when the point of parity is required for target customers even to consider the supplier’s offering or when a supplier wants to counter customers’ mistaken perceptions that a particular value element is a point of difference in favor of a competitor’s offering. This latter case arises when customers believe that the competitor’s offering is superior but the supplier believes its offerings are comparable–customer value research provides empirical support for the supplier’s assertion.To give practical meaning to resonating focus, consider the following example. Sonoco, a global packaging supplier headquartered in Hartsville, South Carolina, approached a large European customer, a maker of consumer packaged goods, about redesigning the packaging T he Building Blocks of a Successful Customer Value Proposition A supplier’s offering may have many technical, economic, service, or social bene? ts that deliver value to customers – but in all probability, so do competitors’ offerings. Thus, the essential question is, â€Å"How do these value elements compare with those of the next best alternative? We’ve found that it’s useful to sort value elements into three types. Points of parity are elements with essentially the same performance or functionality as those of the next best alternative. Points of difference are elements that make the supplier’s offering either superior or inferior to the next best alternative. Points of contention are elements about which the supplier and its customers disagree regarding how their performance or functionality compares with those of the next best alternative.Either the supplier regards a value element as a point of difference in its favor, while the custom er regards that element as a point of parity with the next best alternative, or the supplier regards a value element as a point of parity, while the customer regards it as a point of difference in favor of the next best alternative. harvard business review C u s t o m e r Va l u e P ro p o s i t i o n s i n B u s i n e s s M a r ke t s for one of its product lines. Sonoco believed that the customer would pro? from updated packaging, and, by proposing the initiative itself, Sonoco reinforced its reputation as an innovator. Although the redesigned packaging provided six favorable points of difference relative to the next best alternative, Sonoco chose to emphasize one point of parity and two points of difference in what it called its distinctive value proposition (DVP). The value proposition was that the redesigned packaging would deliver signi? cantly greater manufacturing ef? ciency in the customer’s ? l lines, through higher-speed closing, and provide a distinctive look that consumers would ? nd more appealing – all for the same price as the present packaging. Sonoco chose to include a point of parity in its value proposition because, in this case, the customer would not even consider a packaging redesign if the price went up. The ? rst point of difference in the value proposition (increased ef? ciency) delivered cost savings to the customer, allowing it to move from a seven-day, three-shift production schedule during peak times to a ? e-day, two-shift operation. The second point of difference delivered an advantage at the consumer level, helping the customer to grow its revenues and pro? ts incrementally. In persuading the customer to change to the redesigned packaging, Sonoco did not neglect to mention the other favorable points of difference. Rather, it chose to place much greater emphasis on the two points of difference and the one point of parity that mattered most to the customer, thereby delivering a value proposition with resonating focu s.Stressing as a point of parity what customers may mistakenly presume to be a point of difference favoring a competitor’s offering can be one of the most important parts of constructing an effective value proposition. Take the case of Intergraph, an Alabama-based provider of engineering software to engineering, procurement, and construction ? rms. One software product that Intergraph offers, SmartPlant P&ID, enables customers to de? ne ? ow processes for valves, pumps, and piping within plants they are designing and generate piping and instrumentation diagrams (P&ID).Some prospective customers wrongly presume that SmartPlant’s drafting performance would not be as good as that of the next best alternative, because the alternative is built on computer-aided design (CAD), a better-known drafting tool than the relational database platform on which SmartPlant is built. So Intergraph tackled the perception head on, gathering data from reference customers to substantiate tha t this point of contention was actually a point of parity. march 2006 Here’s how the company played it.Intergraph’s resonating focus value proposition for this software consisted of one point of parity (which the customer initially thought was a point of contention), followed by three points of difference: Point of parity: Using this software, customers can create P&ID graphics (either drawings or reports) as fast, if not faster, as they can using CAD, the next best alternative. Point of difference: This software checks all of the customer’s upstream and downstream data related to plant assets and procedures, using universally accepted engineering practices, company-speci? c rules, and project- or process-speci? rules at each stage of the design process, so that the customer avoids costly mistakes such as missing design change interdependencies or, worse, ordering the wrong equipment. Point of difference: This software is integrated with upstream and downstream tasks, such as process simulation and instrumentation design, thus requiring no reentry of data (and reducing the margin for error). Point of difference: With this software, the customer is able to link remote of? ces to execute the project and then merge the pieces into a single deliverable database to hand to its customer, the facility owner.Resonating focus value propositions are very effective, but they’re not easy to craft: Suppliers must undertake 95 C u s t o m e r Va l u e P ro p o s i t i o n s i n B u s i n e s s M a r ke t s customer value research to gain the insights to construct them. Despite all of the talk about customer value, few suppliers have actually done customer value research, which requires time, effort, persistence, and some creativity. But as the best practices we studied highlight, thinking through a resonating focus value proposition disciplines a company to research its customers’ businesses enough to help solve their problems.As the exper ience of a leading resins supplier amply illustrates, doing customer value research pays off. (See the sidebar â€Å"Case in Point: Transforming a Weak Value Proposition. †) savings from reduced power usage that a customer would gain by using a Rockwell Automation motor solution instead of a competitor’s comparable offering: Power Reduction = [kW spent number of operating hours per Cost Savings year $ per kW hour number of years system solution in operation] Competitor Solution ? [kW spent number of operating hours per year $ per kW hour number of years system solution in operation] Rockwell Automation SolutionSubstantiate Customer Value Propositions In a series of business roundtable discussions we conducted in Europe and the United States, customer managers reported that â€Å"We can save you money! † has become almost a generic value proposition from prospective suppliers. But, as one participant in Rotterdam wryly observed, most of the suppliers were telling â€Å"fairy tales. † After he heard a pitch from a prospective supplier, he would follow up with a series of questions to determine whether the supplier had the people, processes, tools, and experience to actually save his ? m money. As often as not, they could not really back up the claims. Simply put, to make customer value propositions persuasive, suppliers must be able to demonstrate and document them. Value word equations enable a supplier to show points of difference and points of contention relative to the next best alternative, so that customer managers can easily grasp them and ? nd them persuasive. A value word This value word equation uses industry-speci? c terminology that suppliers and customers in business markets rely on to communicate precisely and ef? iently about functionality and performance. Demonstrate Customer Value in Advance Prospective customers must see convincingly the cost savings or added value they can expect from using the supplier’s off ering instead of the next best alternative. Best-practice suppliers, such as Rockwell Automation and precision-engineering and manufacturing ? rm Nijdra Groep in the Netherlands, use value case histories to demonstrate this. Value case histories document the cost savings or added value that reference customers have actually received from their use of the supplier’s market offering.Another way that best-practice ? rms, such as Pennsylvania-based GE Infrastructure Water & Process Technologies (GEIW&PT) and SKF USA, show the value of their offerings to prospective customers in advance is Some best-practice suppliers are even willing to guarantee a certain amount of savings before a customer signs on. equation expresses in words and simple mathematical operators (for example, + and ? ) how to assess the differences in functionality or performance between a supplier’s offering and the next best alternative and how to convert those differences into dollars.Best-practice ? rm s like Intergraph and, in Milwaukee, Rockwell Automation use value word equations to make it clear to customers how their offerings will lower costs or add value relative to the next best alternatives. The data needed to provide the value estimates are most often collected from the customer’s business operations by supplier and customer managers working together, but, at times, data may come from outside sources, such as industry association studies.Consider a value word equation that Rockwell Automation used to calculate the cost 96 through value calculators. These customer value assessment tools typically are spreadsheet software applications that salespeople or value specialists use on laptops as part of a consultative selling approach to demonstrate the value that customers likely would receive from the suppliers’ offerings. When necessary, best-practice suppliers go to extraordinary lengths to demonstrate the value of their offerings relative to the next best alte rnatives.The polymer chemicals unit of Akzo Nobel in Chicago recently conducted an on-site two-week pilot on a production reactor at a prospective customer’s facility to gather data ? rsthand on the performance of its high-purity metal organics offering relative to the next best alternative in producing compound semiconductor wafers. Akzo Nobel paid this harvard business review C u s t o m e r Va l u e P ro p o s i t i o n s i n B u s i n e s s M a r ke t s prospective customer for these two weeks, in which each day was a trial because of daily considerations such as output and maintenance.Akzo Nobel now has data from an actual production machine to substantiate assertions about its product and anticipated cost savings, and evidence that the compound semiconductor wafers produced are as good as or better than those the customer currently grows using the next best alternative. To let its prospective clients’ customers verify this for themselves, Akzo Nobel brought them sample wafers it had produced for testing. Akzo Nobel combines this point of parity with two points of difference: signi? cantly lower energy costs for conversion and signi? antly lower maintenance costs. Document Customer Value Demonstrating superior value is necessary, but this is no longer enough for a ? rm to be considered a best-practice company. Suppliers also must document the cost savings and incremental pro? ts (from additional revenue gener- ated) their offerings deliver to the companies that have purchased them. Thus, suppliers work with their customers to de? ne how cost savings or incremental pro? ts will be tracked and then, after a suitable period of time, work with customer managers to document the results.They use value documenters to further re? ne their customer value models, create value case histories, enable customer managers to get credit for the cost savings and incremental pro? ts produced, and (because customer managers know that the supplier is willing to return later to document the value received) enhance the credibility of the offering’s value. A pioneer in substantiating value propositions over the past decade, GEIW&PT documents the results provided to customers through its value generation planning (VGP) process and tools, which enable its ? ld personnel to understand customers’ businesses and to plan, execute, and document projects that have the highest value impact for its customers. An online tracking tool allows GEIW&PT and customer managers to easily monitor the Case in Point: Transforming a Weak Value Proposition A leading supplier of specialty resins used in architectural coatings – such as paint for buildings – recognized that its customers were coming under pressure to comply with increasingly strict environmental regulations. At the same time, the supplier reasoned, no coating manufacturer would want to sacri? e performance. So the resins supplier developed a new type of highperformance resi ns that would enable its customers to comply with stricter environmental standards – albeit at a higher price but with no reduction in performance. In its initial discussions with customers who were using the product on a trial basis, the resins supplier was surprised by the tepid reaction it received, particularly from commercial managers. They were not enthusiastic about the sales prospects for higher-priced coatings with commercial painting contractors, the primary target market.They would not, they said, move to the new resin until regulation mandated it. Taken aback, the resins supplier decided to conduct customer value research to better understand the requirements and preferences of its customers’ customers and how the performance of the new resin would affect their total cost of doing business. The resins supplier went so far as to study the requirements and preferences of the commercial painting contractors’ customers – building owners. The suppl ier conducted a series of focus groups and ? eld tests with painting contractors to gather data.The performance on primary customer requirements – such as coverage, dry time, and durability – was studied, and customers were asked to make performance trade-offs and indicate their willingness to pay for coatings that delivered enhanced performance. The resins supplier also joined a commercial painting contractor industry association, enrolled managers in courses on how contractors are taught to estimate jobs, and trained the staff to work with the job-estimation software used by painting contractors. Several insights emerged from this customer value research.Most notable was the realization that only 15% of a painting contractor’s costs are the coatings; labor is by far the largest cost component. If a coating could provide greater productivity – for example, a faster drying time that allowed two coats to be applied during a single eight-hour shift – contractors would likely accept a higher price. The resins supplier retooled its value proposition from a single dimension, environmental regulation compliance, to a resonating focus value proposition where environmental compliance played a signi? cant but minor part.The new value proposition was â€Å"The new resin enables coatings producers to make architectural coatings with higher ? lm build and gives the painting contractors the ability to put on two coats within a single shift, thus increasing painter productivity while also being environmentally compliant. † Coatings customers enthusiastically accepted this value proposition, and the resins supplier was able to get a 40% price premium for its new offering over the traditional resin product. march 2006 97 C u s t o m e r Va l u e P ro p o s i t i o n s i n B u s i n e s s M a r ke t s xecution and documented results of each project the company undertakes. Since it began using VGP in 1992, GEIW&PT has documented more th an 1,000 case histories, accounting for $1. 3 billion in customer cost savings, 24 billion gallons of water conserved, 5. 5 million tons of waste eliminated, and 4. 8 million tons of air emissions removed. As suppliers gain experience documenting the value provided to customers, they become knowledgeable about how their offerings deliver superior value to customers and even how the value delivered varies across ation can submit NPI requests whenever they have an inventive idea for a customer solution that they believe would have a large value impact but that GEIW&PT presently does not offer. Industry marketing managers, who have extensive industry expertise, then perform scoping studies to understand the potential of the proposed products to deliver signi? cant value to segment customers. They create business cases for the proposed product, which are â€Å"racked and stacked† for review. The senior management team of GEIW&PT sort through aBest-practice suppliers make sure the ir people know how to identify what the next value propositions ought to be. kinds of customers. Because of this extensive and detailed knowledge, they become con? dent in predicting the cost savings and added value that prospective customers likely will receive. Some best-practice suppliers are even willing to guarantee a certain amount of savings before a customer signs on. A global automotive engine manufacturer turned to Quaker Chemical, a Pennsylvania-based specialty chemical and management services ? m, for help in signi? cantly reducing its operating costs. Quaker’s team of chemical, mechanical, and environmental engineers, which has been meticulously documenting cost savings to customers for years, identi? ed potential savings for this customer through process and productivity improvements. Then Quaker implemented its proposed solution – with a guarantee that savings would be ? ve times more than what the engine manufacturer spent annually just to purchase cool ant. In real numbers, that meant savings of $1. 4 million a year.What customer wouldn’t ? nd such a guarantee persuasive? large number of potential initiatives competing for limited resources. The team approved Panichella’s initiative, which led to the development of a new offering that provided re? nery customers with documented cost savings amounting to ? ve to ten times the price they paid for the offering, thus realizing a compelling value proposition. Sonoco, at the corporate level, has made customer value propositions fundamental to its business strategy. Since 2003, its CEO, Harris DeLoach, Jr. and the executive committee have set an ambitious growth goal for the ? rm: sustainable, double-digit, pro? table growth every year. They believe that distinctive value propositions are crucial to support the growth initiative. At Sonoco, each value proposition must be: †¢ Distinctive. It must be superior to those of Sonoco’s competition. †¢ Measurable. A ll value propositions should be based on tangible points of difference that can be quanti? ed in monetary terms. †¢ Sustainable. Sonoco must be able to execute this value proposition for a signi? ant period of time. Unit managers know how critical DVPs are to business unit performance because they are one of the ten key metrics on the managers’ performance scorecard. In senior management reviews, each unit manager presents proposed value propositions for each target market segment or key customer, or both. The managers then receive summary feedback on the value proposition metric (as well as on each of the nine other performance metrics) in terms of whether their proposals can lead to pro? table growth.In addition, Sonoco senior management tracks the relationship between business unit value propositions and business unit performance – and, year after year, has concluded that the emphasis on DVPs has made a signi? cant contribution toward sustainable, double-digit, profitable growth. harvard business review Superior Business Performance We contend that customer value propositions, properly constructed and delivered, make a signi? cant contribution to business strategy and performance. GE Infrastructure Water & Process Technologies’ recent development of a new service offering to re? ery customers illustrates how general manager John Panichella allocates limited resources to initiatives that will generate the greatest incremental value for his company and its customers. For example, a few years ago, a ? eld rep had a creative idea for a new product, based on his comprehensive understanding of re? nery processes and how re? neries make money. The ? eld rep submitted a new product introduction (NPI) request to the hydrocarbon industry marketing manager for further study. Field reps or anyone else in the organi98 C u s t o m e r Va l u e P ro p o s i t i o n s i n B u s i n e s s M a r ke t sBest-practice suppliers recognize that construct ing and substantiating resonating focus value propositions is not a onetime undertaking, so they make sure their people know how to identify what the next value propositions ought to be. Quaker Chemical, for example, conducts a value-proposition training program each year for its chemical program managers, who work on-site with customers and have responsibility for formulating and executing customer value propositions. These managers ? rst review case studies from a variety of industries Quaker serves, where their peers have executed savings projects and quanti? d the monetary savings produced. Competing in teams, the managers then participate in a simulation where they interview â€Å"customer managers† to gather information needed to devise a proposal for a customer value proposition. The team that is judged to have the best proposal earns â€Å"bragging rights,† which are highly valued in Quaker’s competitive culture. The training program, Quaker believes, he lps sharpen the skills of chemical program managers to identify savings projects when they return to the customers they are serving. As the ? al part of the training program, Quaker stages an annual real-world contest where the chemical program managers have 90 days to submit a proposal for a savings project that they plan to present to their customers. The director of chemical management judges these proposals and provides feedback. If he deems a proposed project to be viable, he awards the manager with a gift certi? cate. Implementing these projects goes toward ful? lling Quaker’s guaranteed annual savings commitments of, on average, $5 million to $6 million a year per customer.Each of these businesses has made customer value propositions a fundamental part of its business strategy. Drawing on best practices, we have presented an approach to customer value propositions that businesses can implement to communicate, with resonating focus, the superior value their offerings pr ovide to target market segments and customers. Customer value propositions can be a guiding beacon as well as the cornerstone for superior business performance. Thus, it is the responsibility of senior management and general management, not just marketing management, to ensure that their customer value propositions are just that.Reprint R0603F; HBR OnPoint 3544 To order, see page 151. P VEY . C. â€Å"What we need are some fresh new ideas. You know, like we had last year. † march 2006 99 Harvard Business Review Notice of Use Restrictions, May 2009 Harvard Business Review and Harvard Business Publishing Newsletter content on EBSCOhost is licensed for the private individual use of authorized EBSCOhost users. It is not intended for use as assigned course material in academic institutions nor as corporate learning or training materials in businesses.Academic licensees may not use this content in electronic reserves, electronic course packs, persistent linking from syllabi or by a ny other means of incorporating the content into course resources. Business licensees may not host this content on learning management systems or use persistent linking or other means to incorporate the content into learning management systems. Harvard Business Publishing will be pleased to grant permission to make this content available through such means. For rates and permission, contact [email  protected] org.

The Constellation Orion

Orion has been recognized as distinct group of stars for thousands of years. The Chaldeans knew it as Tammuz, named after the month that the familiar belt of stars first rose before sunrise. The Syrians called it Al Jabbar, the Giant. To the ancient Egyptians it was Sahu, the soul of Osiris. However in Greek mythology, Orion was a beautiful giant hunter. There are many legends about Orion and several variations about his death and why he was placed in the stars.One story tells of his boast that he would eventually rid the earth of all its wild animals. When the Earth goddess Gea heard of this she became upset and sent a Giant Scorpion to sting him to death. Now even after death that scorpion chases him around the sky. If you notice scorpio and Orion are never in the sky together. Another story says that Artemis the goddess of hunting fell in love with Orion. And when Orion was swimming Artemis was speaking to her brother Apollo.He bet her that she could not shoot a dot on the distanc e. She hit the target right on but had been tricked. She had shoot Orion. She put her love, Orion in the sky. And yet another tells how Orion raped Artemis. And she took her revenge upon him, when she shot him. Now seeing as there are several variations of his death you would have to choose which one you like best and go with it. There are two stars that are well know in the constalation of Orion. The first one is know as Betelgeuse, also called Alpha Orinis.It is one of the brightest stars in the constelation of Orion. It is an irregular because it changes brightness and size but has no regular periods of veration. It is classified as a red supergiant and it is 600 times the size of the sun. The other star to be Mentioned is Rigel also known as Beta Orionis. It is the Brightest star in the constelation and the seventh brightest star in the heavens. The Location of both stars can be seen on the picture of Orion.

Business Capstone Project Responsibility

The investigation introduced in the paper highlights the importance of product market based on money spent on packaging (size, labelling, color material and design) and the way it has been constitutes to be one of the ponents in the customer perception. Nevertheless, there has been effective contribution towards the quality packaging of the product that further adds weight to the research. Moreover, investment done on packaging can be analyzed based on the Australian supermarkets Coles and ALDI and the way it had been supporting in decision making of buying milk products from the store. Packaging is the process of evaluation through design, distribution, labelling, and colour that helps in giving a pretty face to the customers view so that it can attempt to attract customers’ attention to motivate the product’s consumption. However, packaging remains to be i plete if there is no design, style, colour, shape or the material used, as they are deemed appealing to the customers irrespective of the choices made by them. On the other hand, appearance of the product not only adds to be the means of munication for the brand but also helps in conveying brand meaning to the customers (Schleenbecker and Hamm 2013). There are several ways that product designs influence consumer preference. The design of a product determines consumers ´ first impression of the product and quickly can municate product advantage. In addition, the design of a product will generate consumer inferences regarding several product attributes. Furthermore, the product or package appearance can reinforce the image of a brand, as the identity of a brand is expressed visually in the appearance of products (Riley, Martins da Silva and Behr 2015). Although, there are large individual and time-specific differences in the experience of colour and form, there are certain associations that seem to be relatively constant. Overviews of the influence of colour and form on consumer perception of symbolic value (and ergonomic and aesthetic value as well). For example, angular forms are associated with masculinity and dynamism, while roundness evokes femininity and softness (Raheem, Vishnu and Ahmed 2014). On the other hand, when it es to milk products, the packaging needs to be soothing as well as feminine such that with a picture of cow with white background can be forting to eyes as well as eye catching. However, the packaging concept in milk should be regular and not so fancy because they are obtained from natural plants (Okenwa 2016). Moreover, labelling of the pack should be highlighting more on nutrient balance, amount per saving and ingredients. Aldi and Coles, being one of the top retail stores in Australia wish to see their product shelved and making profit. Although, initially, the profit might be cut but later the same process will lead to more sales. Conversely, the use of sale packaging according to customer perception held to be of relevant factors in optimization. This is because from an environment as well as economical perspective, though it’s a costly venture but primary research showed that needs of customers for products like milk and baby care products can only be satisfied based on performance, reliability and packaging (Alvarez et al. 2016). Accordingly, it can be said that, packaging even constitute to be an important aspects that Coles and Aldi should focus on as it adds value to customer perception. In addition, shape, size, design and colour needs to be maintained so that the customers remain inclined towards a product like milk which can be added value through consistency. Milk/food packaging is the holder that holds, secures, saves and distinguishes the item, and which likewise encourages capacity and mercialization. Packaging likewise assumes a noteworthy part in drawing in customer consideration and affecting shopper buy choices. Concerning, current packaging market, bundling gives sustenance organizations the last opportunity to convince customers to purchase the item before brand choice. Along these lines, all bundling ponents must be consolidated to pull in the shopper when acquiring the product. However, the quality in packaging is perceived on two views- first is perceived quality and the second is objective quality. Perceived quality is different from actual reality as it is a higher level of abstraction than a particular attribute towards the products. As a result, the judgement is only made based on the consumer suggested set. The perceived quality differs from objective quality but it not only helps in adding ideal standards but it also helps in analysing the packaged goods based on technical and manufacturing based quality. However, when it es to sensitive products like baby care and milk products, the superiority and excellence of material attracts the consumer while paying more attention to the concept â€Å"health† (Jhandir 2012). The perceived quality ponent can be explained with the specific and intrinsic attributes to infer as well as indicate quality that not only sustains to higher level of abstract dimensions but also generalizes to quality of products. Figure: Perceived Quality ponent Source: (Akdeniz, Calantone and Voorhees 2013) When we analysed the â€Å"Total Food Quality Model† the â€Å"health† dimension not only adds to the perceived quality of the product but also helps the customers in decision-making. According to (), TFQM integrates the multi-featured and the various levelled ways to deal with quality recognition. In addition, it incorporates two other real ponents of shopper conduct in milk products and organic products, in particular the aim to buy, as a trade-off between give and take segments and the clarification of customer fulfilment, as the variation amongst experienced and expected quality (Yin et al. 2016). The following diagram that studies the basic outline of before purchase can be given as under. The model accordingly incorporates rationale or worth satisfaction, the way satisfaction of the customers adds to the a plishment of coveted ou es and qualities. External/ Outward cues, for example, label and information create assumptions about u monly high eating quality; precisely, giving the customer a sentiment extravagance and delight of life. The qualities looked for by buyers will not only affect quality measurements that are looked for but also studies the changed cues that could be seen and addressed. The grouping from prompts/cues, through quality increases the buy intentions based on the hierarchy of progressively theoretical intellectual order (Beneke et al. 2013). The packaging ultimately adds and signifies the overall features as well as uniqueness and originality to the sensory evaluation of milk products that help in brand preferences and municates favourable as well as implied meaning of the product (Drake et al. 2009). When it es to milk products, it is important that the nutritional value of the product is added highlighting good quality protein, easily digestible fat, source of iron and vitamin with calcium. Although, package labelling constitutes to be the â€Å"sense of seeing† that adds additional value. Moreover, sales of the packaging can only be increased by shelf impact, band imagery and functional and satisfaction after using the product (Young 2016). Accordingly, packaging helps in increasing sales of the product majorly, through its size and design and the way customer perceive it quality to be after going through the facts stated through labelling. In addition, it links to business value as an evidence while documenting shoppers decision. The sales helps on the impact of preference as well as petition in the market because Coles and Aldi are petitors justifying their packaging through price while ensuring market share at the same time. On the other hand, foster packaging innovation will lead to mitment and process while assessing new concepts in the marketing world. Corporate Social Responsibility ensures sustainability because of its corporate philanthropic nature tha not only directly benefits the shareholders but also in building brand imaging. CSR portrays the degree to which authoritative results are steady with societal qualities and desires. At its grass roots, being socially mindful has been a worry especially related to the justification that organizations will probably do well in a thriving society than in one that is going into disrepair (Gurung 2013). In today’s petitive marketplace, packaging with the organization guarantees economic profitability. However, to operate in the healthy society, it is important that the resources emphasized to the product offerings are not harmful and are not discontinued in the environment such that pany can emphasise environmentally friendly manufacturing and packaging materials (Sparks, Perkins and Buckley 2013). On the other hand, when it es to packaging, full disclosure about materials as well as origin is important to meet the practices of reporting and meeting the goals. Packaging is the only basis through which the organization depicts its CSR to the customers. Product bundling has the capacity that fits for CSR messages, since it permits purchasers to show their backing of capable organizations to themselves as well as other people, and the data is promptly accessible to them. Besides, the significance of packaging as a promoting tool is progressively recognized, since it empowers promoting munication to happen in the genuine acquiring circumstance and it a panies with the buyers into their homes (Pedersen 2013). The basic functions of packaging holds to be true for protection, preservation, facilitating distribution, promoting customer choice as well as consumer convenience. This form of marketing munication of CSR through packaging is unique because it not only enforces the purchase decision but also adds value to the product every time it is used. As per the list, it is important that environmental and health consciousness can likely occur on packages which can be considered as a value driven package consideration for environment and social causes. However, CSR can be beneficial to packaging through the elements of packaging influencing consumer’s purchase behaviour (Kuvykaite, Dovaliene and Navickiene 2015). Figure: Elements of Package and Consumer’s Purchase Behaviour Source: (Kuvykaite, Dovaliene and Navickiene 2015) However, when analysed on milk products, a brand logo that depicts a cow with a pleasing punch line as well as visual representation of environmentally checked product can not only receive environmental friendly process but also signifies a colour and size that looks fit for the kids. Moreover, milk products also employs labelling to convey CSR on the package and represent the product as responsibly manufactured which can be used while ensuring sustainability standards (Deselnicu, Costanigro and Thilmany 2012). Accordingly, the Corporate Social Responsibility and packaging labelling and design not only adds to the customers value but also ensures that the product is safe and secure. However, Aldi and Coles should also depicts their CSR through Products as external practices may be visible but internal practices can attract and retain the customers in the long run. The brand preference and packaging expenditure are moreover a relationship that is negatively influenced in a way that as the brand preference increases, the organization can lessen its expense on packaging while lowering expenditure. On the other hand, brand preference is assumed to be beneficial only when the product is recognized in the market and the customers are known to the alternatives. However, it is important that buying decision making should be   observed based on the impact of change that is significant on consumer perception, needs and tests, while additionally, adding products that are manufactured as well as changed on their subsequent positioning. Although, these changes have influenced consumer awareness but also have increased demand for products leading to expenditure in packaging depending on the consumer choices (Ahaiwe and Ndubuisi 2015). To conclude, it can be said that packaging holds to have equal important that any other marketing strategy used in the products. However, organizations need to adapt to different methods of packaging that not only increases the product sales but at the same time increase the corporate social responsibility of the product. Moreover, the packaging expenditure needs to be initially invested to shelf the product but later once the brand preference increases, the packaging expenditure can be less and the changing can be made in the process of innovation. Ahaiwe, E.O. and Ndubuisi, U., 2015. The Effect Of Packaging Characteristics On Brand Preference For Cosmetics Products In Abia State, Nigeria.  British Journal of Marketing Studies,  3(8), pp.79-90. Akdeniz, B., Calantone, R.J. and Voorhees, C.M., 2013. Effectiveness of marketing cues on consumer perceptions of quality: The moderating roles of brand reputation and thirdà ¢Ã¢â€š ¬Ã‚ party information.  Psychology & Marketing,  30(1), pp.76-89. Alvarez, A., Garcà ­a-Cornejo, B., Pà ©rez-Mà ©ndezà ¢Ã¢â‚¬ËœÃ‚  c, J.A. and Roibà ¡s, D., 2016. Diversification in Spanish Dairy Farms: Key Drivers of Performance.EEvery Generation Needs Its Leaders., p.163. Beneke, J., Flynn, R., Greig, T. and Mukaiwa, M., 2013. The influence of perceived product quality, relative price and risk on customer value and willingness to buy: a study of private label merchandise.  Journal of Product & Brand Management,  22(3), pp.218-228. Deselnicu, O., Costanigro, M. and Thilmany, D., 2012. Corporate Social Responsibility Initiatives and Consumer Preferences in the Dairy Industry. In2012 Annual Meeting, August 12-14, 2012, Seattle, Washington  (No. 124616). Agricultural and Applied Economics Association. Drake, M.A., Drake, S., Clark, S., Costello, M., Drake, M. and Bodyfelt, F., 2009. The Sensory Evaluation of dairy products. Grunert, K.G., 2005. Food quality and safety: consumer perception and demand.  European Review of Agricultural Economics,  32(3), pp.369-391. Gurung, R., 2013. The Impact of Corporate Social Responsibility Initiatives and Customer Centric Initiatives on Customers. Jhandir, S.U., 2012. Customer satisfaction, perceived service quality and mediating role of perceived value.  International Journal of Marketing Studies,4(1). Kuvykaite, R., Dovaliene, A. and Navickiene, L., 2015. Impact of package elements on consumer’s purchase decision.  Economics and Management, (14), pp.441-447. Okenwa, N.J., 2016.  Consumer Acceptance of Made in Nigeria Packaged Food Products in Enugu (A Study of Packaged Cosmetics and Food Products)  (Doctoral dissertation). Pedersen, A. 2013.  CSR munication via Product Packaging: A General Discussion and an analysis of Innocent Drinks. Pure.au.dk. Available at: https://pure.au.dk/portal/files/45284499/BA_for_upload.pdf.%20Retrieved,%20June%2010 [Accessed 15 Sep. 2016]. Raheem, A.R., Vishnu, P. and Ahmed, A.M., 2014. Impact of product packaging on consumer’s buying behavior.  European Journal of Scientific Research,  120(2), pp.145-157. Riley, D., Martins da Silva, P. and Behr, S., 2015. The impact of packaging design on health product perceptions. Schleenbecker, R. and Hamm, U., 2013. Consumers’ perception of organic product characteristics. A review.  Appetite,  71, pp.420-429. Sparks, B.A., Perkins, H.E. and Buckley, R., 2013. Online travel reviews as persuasive munication: The effects of content type, source, and certification logos on consumer behavior.  Tourism Management,  39, pp.1-9. Yin, S., Chen, M., Chen, Y., Xu, Y., Zou, Z. and Wang, Y., 2016. Consumer trust in organic milk of different brands: the role of Chinese organic label.British Food Journal,  118(7). Young, S. 2016.  Documenting the "Business Value" of New Packaging Innovations - Perception Research Services International. Prsresearch . Available at: https://www.prsresearch /prs-insights/article/documenting-the-business-value-of-new-packaging-innovations/ [Accessed 15 Sep. 2016].

Black Panther Party Essay Example | Topics and Well Written Essays - 750 words

Black Panther Party - Essay Example Edgar Hoover's saw Black Panther party as the greatest threat to the internal security of United States. In 1967, the founder of Black Panther Party, Newton was wounded during battle with police and charged with killing of a Police Officer and these episodes brought Black Panther Party to national prominence and they opened new chapters throughout the country. (History matters, n.d.). The Black Panther Party was one of the first organizations in U.S. history to militancy struggle for protecting ethnic minority and working class emancipation (Guerrilla War in the U.S.A., n.d.). The Black Panther Party was a progressive political organization and a most powerful movement for social change in America since 1776 and the civil war and it is referred as The Sixties and it is only the sole black organization in entire history of black struggle against slavery and oppression in the US that was armed and promoted a revolutionary agenda by the black masses for equality, justice and freedom (What was the Black Panther party, n.d.). History of Black Panther Party: After the assassination of Malcolm X in the year 1965, Huey P. Newton gathered some of his friend including Bobby Seale and David Hilliard and developed an organization in the year 1966 (What was the Black Panther party, n.d.). It was originally named as Black Panther Part for Self Defense and Black Panther were used as symbol. In 1967 Bobby Seale and 30 other party members were arrested and later in 1967 Newton were arrested for killing an Oakland Police Officer. To free Huey, panther Eldridge Clever begins a movement "Free Huey" and later Stokely Carmichael was recruited the party's prime minister in 1968. Carmichael, a former chairman of Students Nonviolent Coordination Committee (SNCC) was totally adamant of absorbing white into the movement and this has led to the basis of black power in US. To curtail the movement, in 1968 the FBI initiated a program known as counterintelligence program and later did the surgical assassinations for killing many members of the organization. These mass killings and several arrests were followed by a psychological war designed to split and destroy the party (Guerilla war in U.S.A., n.d.). Theory of Black Panther Party: Malcolm X was a role model of Black Panther part and the party members followed the Malcolm's belief of international working class unity across various minority group, color or gender and therefore they were able to unite various minority and white revolutionary group. The Black Panther party rejected the government stance to join politics and share power structure (Black Panther Party, n.d.). The Black Panther party took many ideas from Karl Marx, Lenin and Mao and shaped the Black Panther Party in such a manner in which it should organize a revolutionary cadre organization and from the Maoism the Black Panther Party considered them the vanguard party that is committed to organizing support for a socialist revolution (Black Panther Party, n.d.). They later adopted ten point programs. The Rules of Black Panther Party: In addition to ten point programs, every member of Black Panther party has to obey a number of rules and the enforcing authorities such as central committee members or central

Define and evaluate the major geostrategic challenges the EU will face Essay

Define and evaluate the major geostrategic challenges the EU will face in the coming decade - Essay Example 67). However, the EU member countries are fighting to alleviate the union from these challenges. The members’ main concern is the economic, security, and power balance challenges. The union intends to resolve its economic challenges by boosting trade through sharing the gross domestic product as well as to increase trade and investment and finally developing defense and aid spending on areas that they will feel affected. Nonetheless, other than the unions own intended resolutions, the essay will also suggest, at different points, the possible solutions to the highlighted EU’s geostrategic challenges. EU’s problems are associated with the growing differences in the political ideologies and foreign policies among member countries. These elements have led to geostrategic challenges including hierarchy of nations, fall or collapse of the EU economic power, power of populations, leadership issues, political ideologies, war threats, dwindling unity, Security and welfare, maritime security challenges, cyber domains and the maritime environment, and balance of management power on fundamental of EU’s assets. Other challenges include continued fall, fail, and collapse of the Middle East states, increasing trend of recruitment of the terror group, transnational crime, and Environmental security. The geopolitical analyses are concerned with the political dynamics that tends to interfere with the international relations. Some member nations are considering themselves more economically and politically powerful than other member nations (Howorth, 2007; Pg. 126). This has swayed nations’ capacities and attributes that have led to hierarchy of nations among the EU members. The â€Å"great power† notion that emerged in the ninetieth century has since made some nations within the EU powerful in terms of policy formulation, decision making, and

Proposal GM aquiring Ford Thesis Example | Topics and Well Written Essays - 250 words

GM aquiring Ford - Thesis Proposal Example This will reduce the risks and uncertainties that have been facing the organization (Sherman, 2010). Acquisition of Ford will involve acquiring all machinery, human resource and premises etc. acquiring the human resource will play a great role in incorporating new ideas to the organization an aspect that will help the company face different challenges that are being experienced in the market. In addition, the company will benefit with a new culture thereby change the old existing culture of dependence on leaders to come up with new ideas (Sherman, 2010). Acquisition of Ford will expand the source of revenue. The two companies will expand the level of production an aspect that will help the company position itself strategically in the market. In addition, the company will have enough personnel to distribute and maintain a close relationship with the customer. Lastly, acquisition of the new company will diversify the market. This move will play a great role for the company to segment the market by using different products according to customer needs and requirements (Sherman,

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Response to quiz questions Assignment Example | Topics and Well Written Essays - 1750 words

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