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Marketing & Innovation Session 02: Business Model Canvas Marcos LIMA, PhD Skema Business School Knowledge Management, Innovation and New Products How are these concepts related? Business Model Positioning Process Marketing Mix Knowledge Management Technology New Products & Services Innovation Targeted Segments Business Models are ‘Iterative’! Structure of ‘The BM Generation’ Textbook Business Models Are not New! Examples of Innovative BM Diners Club, 1950 Xerox pay-per-copy, 1959 What is a Business Model Your Definition? Alex Osterwalder’s Definition A business model describes the rationale of how an organization creates, delivers and captures value. Strategic Marketing and Value Creation Physical Process: What is wrong here? Source: Lannings & Michaels 1988 apud Kotler, 2009 Strategic Marketing Physical Process x Value Creation Process Source: Lannings & Michaels 1988 apud Kotler, 2009 Marketing Planning Process Technological Forces Economic Forces Product/Brand Positioning Product Marketing Environement Marketing Positioning Marketing Mix Customer Needs Social Forces Promotion Cultural Forces Segmentation /Targeting Place/ Distribution Price Competitive Advantage Competitive Forces Legal/ Political Forces Marketing Planning Process Technological Forces Economic Forces Choosing the Value Marketing Environement Product Social Forces Promotion Promotion Cultural Forces Place/ Segmentation Distribution /Targeting Price Competitive Advantage Marketing Positioning Marketing Mix Customer Needs Market / Product Positioning Providing the Value Competitive Forces Communicating the Value Legal/Political Forces Strategic Marketing Choosing the A. Segmentation Value B. Targeting C. Positioning Differentiation attribute A Differentiation attribute B Strategic Marketing Segmentation Video-Case: The Strategy Targeting Targeting Positioning Identity: The way a company aims to identify or position itself Positioning Image: The way the public perceives the company or its products Brand Source: http://www.slideshare.net/madhusudanpartani/segmentation-targeting-and-positioning Positioning Map Positioning: The Mountain Dew Case What do you think is this brand’s positioning? Positioning Positioning Statement draft for Mountain Dew: To young, active soft-drink consumers who have little time for sleep, Mountain Dew is the soft drink that gives you more energy than any other brand because it has the highest level of caffeine. Source: http://www.slideshare.net/madhusudanpartani/segmentation-targeting-and-positioning Positioning Map Sugar Caffeine Positioning Value Proposition Positioning & the Mix The BM CANVAS https://www.youtube.com/watch?v=QoAOzMTLP5s 9 Blocks of BMC WHO do you help? WHO do you deliver value to? Choose to serve segments whose needs you know well 9 Blocks of BMC How do you help? What value are customers getting? Seek to solve customer problems and satisfy (unmet) customer needs 9 Blocks of BMC How do they know you? How do you deliver value? Communication, distribution and sales channels 9 Blocks of BMC Channel Phases 9 Blocks of BMC How do you interact with customers ? Can you earn their loyalty? 9 Blocks of BMC CRM tools • Personal assistance • Dedicated personal assistance • Self-service • Automated services • Communities • Co-creation 9 Blocks of BMC What to you get from the relationships you build? Revenue (and other benefits!) 9 Blocks of BMC Main Revenue Types Asset sale Usage fee Subscription fee Lending/ Renting / Leasing Licensing Brokerage fees (credit card model) Advertising 9 Blocks of BMC What you are Your organization What you have Your resources 9 Blocks of BMC What you do Critical competences 9 Blocks of BMC Examples of Key Activities: Production Problem solving Platform / Network 9 Blocks of BMC Who helps you Outsourced activities? Outside resources? 9 Blocks of BMC Types of Partnerships: 1. Strategic alliances between non-competitors 2. Coopetition: strategic partnerships between competitors 3. Joint ventures to develop new businesses 4. Buyer-supplier relationships to assure reliable supplies 9 Blocks of BMC What you give Financially or otherwise… 9 Blocks of BMC Cost structures Fixed Variable Economies of scale Economies of scope BMC Overview Competencies Required by the BMC Brainstorming with the BMC ‘Long Tail’ Business Models http://thefinanser.co.uk/fsclub/2013/08/sibos-2013-the-long-tail-model-is-coming-to-banking-part-two.html ‘Long Tail’ Business Models ‘Long Tail’ Business Models Lego Factory: A Case of ‘Long Tail’ BM Failure ‘Long Tail’ Business Models Multi-Sided Platforms Platform BM Pattern Multi-Sided Platforms Multi-sided Google Platforms: Multi-Sided Platforms Wii x PSP / Xbox Multi-Sided Platforms Apple’s Evolution into a Platform ‘Free’ or ‘Freemium’ Models Freemium BM Pattern ‘Free’ or ‘Freemium’ Models Metro, Free Newspaper ‘Free’ or ‘Freemium’ Models Flickr ‘Free’ or ‘Freemium’ Models Skype Good Luck! Marcos Lima [email protected]