1. Business Market Management 3 rd edition Managing Market Offerings Chapter 5

2. Section III: Creating Value Business Market Management, 3 rd edition Chapter 5-

4. Business Market Management, 3 rd edition Chapter 5- Guiding Principles Crafting Market Strategy Understanding Firms as Customers Marketing Sensing Managing Market Offerings New Offering Realization Business Channel Management Gaining New Business Sustaining Reseller Partnerships Managing Customers Regard Value as the Cornerstone Accentuate Working Relationships & Business Networks Focus on Business Market Processes Stress Doing Business Across Borders Understanding Value Creating Value Delivering Value Business Market Processes

7. What is Market Offering? Business Market Management, 3 rd edition Chapter 5- Core Product The fundamental, functional performance a generic product provides that solves a customer’s basic problem Minimally Augmented Product Adds to the core product the least amount or number of services, programs, or systems considered absolutely essential Augmented Product Adds to the core product those services, programs, and systems a supplier offers to meet a broader set of customer requirements and preferences, or to exceed customer expectations Potential Product Encompasses any imaginable product change or service, program, or system a supplier might create to add value or reduce cost in ways that set it apart from others

8. Business Market Management, 3 rd edition Chapter 5- Create Value for Targeted Segments in the Home Market Create Value for Targeted Segments & Customers in Other Country Markets Constructing Flexible Market Offerings Managing Market Offerings Across Border Adapting Market Offerings Across Borders Pricing Across Borders Prepare to Implement Flexible Market Offerings Formulate Flexible Market Offerings by Market Segments Assess Customer Value & Supplier Cost Articulate Present Market Offering Apply Value-Based Pricing

9. I. Some Conventional Thinking About Market Offerings Business Market Management, 3 rd edition Chapter 5-

17. II. Constructing Flexible Market Offerings Business Market Management, 3 rd edition Chapter 5-

18. Augmenting Services, Programs, and Systems Business Market Management, 3 rd edition Chapter 5- Services Fulfillment : Availability, assurance, emergency delivery, installation, training, maintenance, disposal/recycling Technical : Specification, testing & analysis, troubleshooting, problem-solving, calibration, customer productivity improvement Programs Economic : Terms & conditions; deals, discounts, allowances & rebates/bonuses; warranty; guaranteed cost savings Relationship : Advice & consulting, design, process engineering, product & process redesign, analysis of cost & performance, joint market research, co-marketing & co-promotion Systems Linking : Order management intranet, automated replenishment & vendor-managed inventory, ERP, CMM Efficacy : Information & design assistance intranet, expert systems, integrated logistics management, assessment management, responsiveness systems

20. The Concept of Flexible Market Offerings Business Market Management, 3 rd edition Chapter 5- Standard Bundles/ Packages: Designed to meet the needs of the “average customer” Vanilla: Offered across all segments Naked Solutions: Bare minimum of products or services that all segment members uniformly value Options: Offered separately for those segment members that value them Mass Customization: Capability to offer individually specified products or services on a large scale: Elicitation, Flexibility, Logistics

23. Business Market Management, 3 rd edition Chapter 5- Baxter Healthcare Market offerings to Two Segments: Transactional and Strategic Hospital Customers Segment Marketing Offering Element Transactional Customer Strategic Customer Product returns Standard Standard Technical assistance Standard Standard Single point-of-contact Not offered Standard Future disease incidence forecast Not offered Option Price deals Standard Standard Corporate customer bonus Not offered Standard Executive perspectives Not offered Standard Consolidated purchase report summary Not offered Standard ACCESS Program Not offered Option Baxter Corporate Consulting Not offered Option ASAP order entry system Standard Standard COMDISCO Technology Assessment Not offered Standard Value Link stockless inventory program Option Option COMDISCO asset management system Option Option Programs Services Systems

26. Flexible Market Offering Strategy Matrix Business Market Management, 3 rd edition Chapter 5- Service Element Deployment Service Element Status Do Not Market Market as “Standard” Market as “Option” Existing “standard” service Prune from standard offering Retain in standard offering Recast as surcharge option Existing “optional” service Discontinue option Enhance standard offering Retain as value-added option New service Keep on shelf Augment standard offering Introduce as value-added option

38. III. Value-Based Pricing Business Market Management, 3 rd edition Chapter 5-

40. Value-Based Pricing Business Market Management, 3 rd edition Chapter 5- Pricing Strategy Focuses on where within this range to position the market offering and how to shift the range itself and the supplier’s relative position within it Pricing Tactics Focus on shifting the supplier’s position within the existing price range and are often transitory in nature Transaction Price Focuses on realizing the greatest net price for each individual order

43. Value-Based Pricing Model Business Market Management, 3 rd edition Chapter 5- - (Value f – Price f ) > (Value a – Price a ) ( Value f – Value a ) > (Price f – Price a ) ∆ Value f,a > (Price f – Price a ) Price f < Price a + ∆ Value f,a

44. Value-Based Pricing Framework Business Market Management, 3 rd edition Chapter 5- Rs./Unit 0 Cost f,a Price a Value a Value f Profit for Offering a Customer Incentive ( Į ) To Purchase Offering a Incremental Value (∆ Value f,a )

47. IV. Managing Market Offerings Across Borders Business Market Management, 3 rd edition Chapter 5-

52. Providing Transnational Market Offerings Business Market Management, 3 rd edition Chapter 5- Adaptation Aggregation Arbitration AAA Triangle

56. IV. Summary Business Market Management, 3 rd edition Chapter 5-

58. Business Market Management, 3 rd edition Chapter 5- All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall