The History Of The Value Delivery Network Marketing Essay

2791 words (11 pages) Essay in Marketing

5/12/16 Marketing Reference this

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In today’s business world, marketing is an effective tool in order for businesses to succeed in retail development for customers. To understand marketing, the perception of its definition is very important. People see marketing from different points of view forgetting some of the most fundamental functions. Marketing is more than just buying or selling. Here are three marketing definitions from different prospective As a personal definition, marketing is the heart of a business. Marketing is responsible to accommodate the customer needs by adjusting products or services. Some of these adjustments are such as prices, hours, product quality, product quantity, custom made product, or special service. A good example of marketing is taking place at Pacific Hospital of Long Beach. The marketing department is responsible for identifying the needs of the patients to increase the customer base and in turn boost net profit and repeat customers for services rendered from the facility. Some of the issues that were addressed by the marketing department that do satisfy the needs of the patients are: providing quality services at a competitive price, free transportation for surgeries at the facility, hotel accommodations when patients are from out of town for the family members, private rooms during the patients stay, a home like atmosphere in the patient rooms to make the patients more at ease, extra meals for visitors, and financial aid. Providing these extra services gives the customer more options to choose from when determining which facility to use. By providing these extra services, the marketing department has increased the customer flow (daily census) to the hospital, and the hospital has achieved some of the companies stated business goals, specifically, an increase in profitability, and contributing to the business growth.

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Another marketing definition would be marketing is the developing and positioning an e-content product someone who will want to buy (Scott, 2004). In this definition, marketing will define a product in which customers will want to buy. Then the development of the product will take place. Here is a good example. Fast food restaurants need to compete with each other on pricing and new products. Marketing is responsible to create these new products. The marketing department of each firm will perform research for a product that customers will buy such as when McDonalds created a successful meal for children, the happy meal. The happy meal includes a toy with the meal and an attractive toy box that most of the children want to have. When the marketing research revealed that children from ages two to 10 years old were very interest in the toy more than a regular meal, the marketing department concentrated on the development of the happy meals brand creating new and very attractive toys on a season basis. This product or marketing tool increased sales for Mc Donald’s business.

Here is the last definition of marketing. Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals (Kotler, 2001). This definition gives the understanding that marketing is not only about advertising, public relations, product placement, or promotions. Marketing focus more on the satisfaction and needs of a customer as this relates to business. The process brings together the four “P’s” and other factors using a well thought-out plan to achieve the companies marketing goals. These goals are to retain old customers and achieve new ones, and at the same time increase the business profitability.

In conclusion, marketing is an important factor that will contribute to a businesses success. Marketing will assist any business or organization to succeed in the most cost-effective way. An effective marketing tool will reduce costs and can increase profitability for any business or organization. Marketing will assist businesses to achieve any business goal, and at the same time can increase customer satisfaction. When a customer is satisfied, customers will be loyal to that business, and this action will contribute to the businesses growth potential. Marketing is not only about buying and selling. Marketing is also about satisfying customers and the companies needs.

Many individuals may think of marketing as the way a business advertises their products and or their services. Others may believe advertising is how an organization carries out their public relations or promotions. A few individuals consider marketing to be selling or advertising. In a way this is true because in order for marketing to be carried out properly selling and advertising are a few key roles of the marketing process (Perreault McCarthy, 2004). Jan Welborn Nichols and Ann Arbor describe marketing as ones strategy for allocating resources (time and money) in order to achieve ones objectives (a fair profit for supplying a good product or service) (Welborn Nicholas, 1993). As one begins to follow the passage below one will become familiar with different definitions of what marketing signifies, based on these definitions explain the importance of marketing in organizational success. Also, the following will provide a minimum of three examples from the business world to prove the importance of marketing and the organizational success.

What should a company do before and after it decides to produce and sell? As indicated by Perreault-McCarthy and Arbor a company should consider the following if the product one wishes to promote is a bike:

1. Analyze the needs of people who might buy a bike and decide if they want more or different models.

2. Predict what types of bikes – handlebar styles, type of wheels, brakes, and materials – different customers will want and decide which of these people the firm will try to satisfy.

3. Estimate how many of these people will want to buy bicycles, and when.

4. Determine where in the world these bike riders will be and how to get the firm’s bikes to them.

5. Estimate what price they are willing to pay for their bikes and if the firm can make a profit selling at that price.

6. Decide which kinds of promotion should be used to tell potential customers about the firm’s bikes.

7. Estimate how many completing companies will be making bikes, what kind, and at what prices.

8. Figure out how many to provide warranty service if a customer has a problem after buying a bike (Perreault McCarthy, 2004).

Many may assume that the activities above are captured by production when in fact it is actually a part of a much greater process identified as marketing. This process directs the production of the product(s) and provides needed assurance that the right goods and services are produced and find their way to consumers (Perreault McCarthy, 2004).

Another way an organization can market and organize successfully is by strategically integrating across the entire organization. As Jan Welborn Nichols and Ann Arbor describe marketing as ones strategy for allocating resources (time and money) in order to achieve ones objectives (a fair profit for supplying a good product or service) (Welborn Nicholas, 1993). One way to define this effort would be to do the following activities and consider marketing as a cycle that consists of:

1. Research: Research often begins with a guess, sometimes an informed guess based upon your observations, experiences, and belief system. Often the process of gathering information can feel counter-intuitive, especially when research indicates something other than what you believe (Welborn Nicholas, 1993). Research customer demographics, psychographics, and competitive intelligence. From this research a SWOTT analysis can be developed.

2. Strategy and planning: gathered from raw data, the marketing department can create a strategy and then implement

3. Branding: making a name for the product – brand, how would the company like to be known by the consumer.

4. Product development: the complete process of bringing a new product or service to market.

5. Sales and sales training: as the product or service has been established and prior to bring the product to market the sales team must be trained and to ensure proper knowledge of the product and or service to close a sale.

6. Point of purchase (POP): materials needed to press sales: coupon holders, brochures, and promotional signs to name a few.

7. Public relations (PR), media relations, and public affairs: PR deals with the public to inform individuals of the new product and or service. Media relations strictly deal with the press. Public affairs transact with the various government entities that impact the organization.

8. Customer service: customer experience should be extremely important to the marketers for if the customer is not satisfied with the product and or service then the organization must run back to the drawing board to identify what went wrong with the product and service.

One method to complete a marketing debate would be to include the four P’s (Perreault McCarthy, 2004). The four P’s consists of the following: product, price, place, and promotion.

A few examples of the business world to prove the importance of marketing and the organizational success are Dell Computers, McDonald’s, and Wendy’s. Dell Computers provides a service that nearly other competitors can not follow. For example, Dell can create a computer to the consumer’s needs as the client is on the phone. Then, the computer can be shipped to the consumer in nearly no time at all (Businessweek, 2005). McDonald’s is known worldwide and is the number one fast food company leading in sales today. How does McDonald’s do this? Combining tangible products and meeting the needs of the consumer – Happy Meals (Hoovers, 2008). Wendy’s menu offers a diversity of menus and all for just about .99 cents (, 2008). No one can go wrong with a .99 cents menu especially such a variety of foods. With such a diverse world people need a variety of foods when looking through a menu of the restaurant will lose interest and the client will be lost.

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Today marketing process can begin with an idea or a passion. As a company conducts research to determine if the idea has merit then one can begin to ask questions. Who are the organizations potential customers? How large is the target market? What’s the perceived value of the product? Who are the competitors? How is the idea unique? How can the organization communicate that uniqueness?

In conclusion, marketing is important to many companies and is an essential piece to an organization’s success. Success is of great importance in creating a foundation to produce a product and or service. The comprehension of the functionality and need for marketing is a good starting point in understanding what’s the purpose and how it interrelates in a economy and enhances consumer responsiveness in its buying power.

Defining Value

Value creation

The customer is buying satisfaction. Highest value is derived when the customer is satisfied.

Some common myths in Value Creation

Myth # 1 More is often considered value

Buy one get one free schemes are rolled out. There is of course an instant sales push. However at the end of the scheme the customer feels that he had all along been paying 100% more for the products and perceives that very product as costly once the scheme is withdrawn. May switch to another product at the same price.

Conclusion: Dissatisfaction leads to value erosion

Myth # 2 Price is value

Many businesses considers lower price as offering more value. More often than not lowest price products end up as the second best with a higher priced product with similar product attributes leading the market. The simple reason is the higher price product may be offering a higher satisfaction due to perceived values and imagery. Car markets are a prime example of this syndrome.

Myth # 3 More Features and add on are value

Businesses load a product or service with more features thus offering a higher value. While this may be attractive if the features are not backed by adequate supports the satisfaction may be less and value is reduced.

We encounter this everyday. A customer buys a product with many features but not demonstrated properly or may not be serviced properly. Enquiries may not be handled effectively. Airlines offering add ons like free overnight accommodation are still not favored if the services, like enquiry handling, reservations, and time schedules are poor. Cell phones companies may be offering plenty of add on like national roaming or free incoming calls etc. However if the billing is poor and billing enquiries are not addressed properly the customer is dissatisfied and leaves the service for another provider.

Myth # 4 Products are competing with similar products

This is often true in the leisure industry. A movie theatre may not be competing with another movie theatre. If the customer is not satisfied with a theatre or movie he may look at options to other entertainment sources, for instance an amusement park. We may call them discretionary time products. Highest satisfaction levels are very important in this type of business.

Value delivery


Globalization and technological innovation are creating dynamic network or chain of interconnected players to bring and deliver value to the end user. The notion that value can be created by cooperation has led marketers to search for ”win-win” positions as a way to enhance profitability through collaborative value creation (Anderson, Hakansson, & Johanson, 1994; Kanter, 1994). The idea of value creation and exchange is the foundation stone of relationship marketing. This view is based on three different assumptions of value exchange potentialities (Christopher et al., 2002). These value perspectives suggest that value is created; as an offering and delivered through recurrent transactions within a supplier-managed relationship; through mutually interactive processes and shared through negotiated agreement within the life of a relationship and shared in interactions that emerge from within networks of relationships.

Thus value has been considered to be an important constituent of relationship marketing and the ability of a company to provide superior value to its customers is regarded as one of the most successful strategies. This ability has become a mean of differentiation and a key to the riddle of how to find a sustainable competitive advantage (Ravald and Gronroos 1996; Heskett et al 1994; Nilson 1992; Treacy and Wiersema, 1993).

Walters and Lancaster (1999a and 1999b) determine value as the utility combination of benefits delivered to the customer less the total costs of acquiring the delivered benefits and is then a preferred combination of benefits compared with acquisition cost. There seems to be an agreement that value is a function of what a customer gets, the solution provided by an offering, and the sacrifice of the customer to get this solution. Consumer’s overall assessment of the utility of a product based on a perception of what is received and what is given, is known as perceived value (Zeithaml, 1988). In a relational context the offering includes both a core product and additional services of various kinds.

Many companies today have partnered with specific suppliers and distributors to create a superior value delivery network, also called a supply chain (Magnet, 1994). Brown (1997) has defined supply chain/value delivery network as a tool to disaggregate a business into strategically relevant activities which enables identification of the source of competitive advantage by performing these activities more cheaply or better than its competitors. It comprises of larger stream of activities carried out by members like suppliers, distributors and customers. Further Christopher (2002) defines a value delivery network/supply chain as the network of organizations that are involved through upstream and downstream linkages in the different processes and activities that produce value in the form of products and services in the hands of the ultimate consumers. In order to gain competitive advantage value delivery network/supply chain collaboration or integration is required i.e. the backward/upstream and forward/downstream collaboration/integration. Mentzer (2001) says a value delivery network comprises of number of players in which a firm whether manufacturing or service, holds the key by creating and offering values in terms of output to its customers. This further can be justified with the help of the notion that the core of relationship marketing is relations, maintenance of relations between the company and the actors in its micro-environment, i.e. suppliers, market intermediaries, the public and of course customers as the most important actor. Thus the more pertinent issue is not what kind of an offering the company provides – rather it is what kind of relationship the company is capable of maintaining.

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