Management Exam questions - Customer vs. Company Value-Creation Perspective

Question: Contrast the way customers view the value-creation process with the way companies view it.

Ans: Companies and Customers holds different expectations, on one end customer is on receiving end and want the best product or service delivered.

Customer's perspective may involve below 4 P's

Product:  It should be functional at the least and delivers customer delight experience with other P's in favour. Like, Price of the product must be lower than competition and value delivered is on higher side. Promotion is something curated for customers by the Companies, so they would like to be benefitted with the associated the perks like confidence of branding and better know how of product and since client is on receiving end, would love to get benefitted on associated services like home delivery and other possible accessibility. 

But in perspective of Company, its a vital task to understand the marketing task and fulfill the most of value creation . 

For companies its a comprehensive process of providing the expected solution to the customer, 

Starting from gathering the data, marketing insights to understand the problem statement or the expectation of customer, Companies "focus" on enabling the services and features that delivers the solution or expectations.

Companies follow  customer driven strategizing often related to STPD (Segmentation, Targeting, Positioning and Differentiation) to ensure the product is being focus to the right section of customers seeking that product and that too in correct offering. On customer end, it is expected to have evaluated the product or service based on their preferences and needs.

Companies strategize further with 4 Ps. as shared earlier, it holds for Product , Price , Promotion and Price, they evaluate options to optimize the offerings so as could be delivered to Customer with most value possible.

For Companies, its very necessary to have actionable data coming from customers to ensure betterment and enhancement of products. Communication is vital for company to engage and understand the problems in their products, while customers could take this as an opportunity to share the feedback with expectation of betterment of associated product or service.

As we say, Relationship matters. Customer relationship plays an important role. This is a two way street where companies should try to engage with clients to ensure the product delivers and enables the customer to avail the benefit of the product in a delightful way. This enables Loyalty, return customers (WOM) , repeat purchases and best of  all,  A happy customer.

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Question : Many companies are beginning to realize that they are not really market and customer driven but rather are product and sales driven. In the attempt to transform themselves into true market-driven companies, many firms must change. Describe and explain what changes are necessary. You may use a contemporary example of a company with corresponding facts/information.  

Answer:  It is very exciting to see more and more companies realizing and understanding the importance of Marketing and ensuring correct customer orientation. Companies may refer Porters 5 forces , i.e. 

Industry Competition, 

Threat of Substitute

Threat of New Entrant 

Bargaining Power of Supplier 

Bargaining Power of Buyer.

This may help them access the situation they are in. But when it comes to companies who have been into the Product and Sales driven state and now want to transform to the Market driven company, they may have to go through serious change in the way company currently functions. They may require a dedicated team of resources who are well informed of the power of marketing and able to apply relevant practices to actionable items and turnaround the company marketing strategy.

I would like to cite the example of GE, General electric being a company known for its innovation and but they understood to have been long deviated from the path and may be investing on something no body requested. They were company of known and proud engineers working for new technologies and hardware that may be resolving problems but they didn't had updated set of Marketing strategy. Fortunately they were able to do the transition but it took them long to evolve. The major reason for delay observed was enabling current employees , most of them were not great in functional and CR skill and required training and shadowing from other team members who had the skills to optimize the situation. But in course of this transition they have shared an outline to have Marketing not just a support function like previous days for GE, but understanding the need and addressing it. They classified the Marketing team with 4 types of employees , 

The Instigator - Leaders pushing for change

The Innovator - Creative ones determining new exciting possibilities

The Integrator -Builder of the bridges across teams and enabling cross benefitting of the available and possible benefits.

The implementor - Leaders able to execute the action items, work in coalitions. 

Working in sync and enabling the new marketing team to follow the best practices available for value creation to the customer enabled them to be not just more relevant but also a company with customer centric approach and hence enhancing their business associating it with reliability.

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