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Value Chain Marketing: A Fundamental Concepts Summary Review



marketing value chainby Kenneth Rudich

Now that we’re 14 posts into our Modern Day Value Chain Marketing series, it seems like a good place to pause and review what’s been covered thus far.

Here are the key foundational concepts, starting from the beginning.

We have two clear objectives for this series.

The first objective is to Think like a Strategist and Act like a Marketer.

The second objective is to set the stage for assembling a data-driven decision support system that is commensurate with your resources, intelligence needs and value creation concerns.

These two objectives go hand-in-hand.

Value Chain for MarketingThink like a strategist reflects the necessity to assume an analytical posture for dissecting the market circumstances that surround a product or service.

It’s about unearthing, studying and interpreting information that either creates opportunity or inhibits it.

Act like a marketer translates the information into insights and knowledge, and then constructs an action plan to gainfully employ them.

It’s also concerned with executing and managing the action plan.

The data-driven element provides quantitative intelligence on a regular basis. One distinction worth noting revolves around the idea that it is NOT a data-driven decision system; but rather, a data-driven decision SUPPORT system.

In its support role, the quantitative information complements the qualitative information to yield a complete and holistic understanding of the overall market opportunity in relation to the marketing strategy.

This, in essence, is the underlying foundation for the value chain approach to marketing.

It combines the marketing value chaincritical thinking skills of the strategist with the insightful knowledge of the marketer to fashion an optimal value proposition, one that entertains both the consumer perspective and the provider perspective.

When done well, it’s a win-win scenario, which in turn leads to achieving the ultimate quest of the enterprise: to build a product or service-based operation that is attractive, competitive and sustainable.

Value Chain Basics

In the last twelve posts in particular, we’ve introduced a slew of basic concepts to lay the groundwork for leveraging the role of the value chain as a marketing tool.

value chain marketing strategy basicsThe primary emphasis has been to provide a macro — that is, a big picture — perspective.

It’s important to have a firm grasp of this material before moving on because it’ll be instrumental for appreciating the nitty gritty of what’s coming next.

With this in mind, we’ve developed a review of the key words and concepts upon which this content was built.

Look it over — and if you see anything that seems unfamiliar, click on the associated link to refresh your memory.

-Multidimensional Analysis

What is multidimensional analysis? How is it used and why is it useful?

What are the six multidimensional features of the Generic Value Chain Model for Marketing?

Multi-Level Analysis

What is the intent of the generic value chain for marketing?

What does multiple levels of information mean, and how do they fit within the context of the value chain?

What does it mean to interrogate the marketing data?

What is horizontal-vertical convergence? What does it allow a marketing analyst to do?

The Outside-in Inside-out Dynamic

What is the outside-in inside-out dynamic?

What is outside-in thinking and how does it pertain to the value chain?

What are the key product characteristics to consider?

What are the key service characteristics to consider?

What are motive characteristics, and why do they matter?

Inside-out Thinking

What is inside-out thinking and what role does it play within the value chain?

What is the conceptual meaning of the term Revenue-generating power?

What is the conceptual meaning of the term Cost Optimization?

What is the connection between the value chain and a Holistic View?

The Outside-in Inside-out Tension

What is the meaning of the term outside-in inside-out tension?

What is the equilibrium hurdle?

What can happen when equilibrium is lost?

Modular Design Thinking

What is the relationship between mass production versus mass customization?

What is one method for achieving mass customization?

What is the difference between product-centric versus customer-centric marketing?

How can modular thinking impact product marketing? Service marketing?

Why is locus of control important, and to whom?

Specialization and Systemization

What is value chain specialization? What does it entail?

What is value chain systemization?

What is modularity within modularity? Can you give one example of it?

What is cosmetic customization? Can you give an example?

A Modular Future

How will modularity affect newly emergent technologies?

How will modularity affect innovative product applications?

What is the relationship between modularity and a disruptive market force? Can you give an example?

What is value chain agility, and how does it help to keep pace with market changes?

Strategic Outsourcing

What is core and context analysis?

What is augmented specialization and what role does it play?

What is gig outsourcing and why is it in a paradoxical state?

What is the relationship between the outside-in inside-out dynamic and the concept of equilibrium in gig outsourcing?

Outsourcing Contracts

How do you get collaborative results in a competitive environment?

What are the three key variables that influence a negotiation?

How does the outside-in inside-out dynamic influence a negotiation?

What is a good faith negotiation mentality?

Why is getting to, “That’s right,” important in a negotiation?

What are the fundamentals of negotiating with an outsourcing vendor?

How do you obtain business value with outsourcing?

What are contractual performance metrics?

What are the three provisions of proper out-clauses?

Why is a win-win scenario preferable in outsourcing?

To be continued: Value Chain Marketing – Mere Idea versus Good Idea