Page 47 - DMGT308_CUSTOMER_RELATIONSHIP_MANAGEMENT

Customer Relationship Management

Notes Positioning and Product Concepts

The framework provides a relatively easy way for organizations to document their value creation
strategies—for individual products or for the organization as a whole.

Example: Sharkey mainly offers experiential/hedonic value to the children of upper-
middle-class parents through its hairstyling products and environment. Sensory value is created
through the purchase/consumption environment (colourful cartoon themed decor, television
programs, music, video games, mini arcade, and retail store), as is emotional value (play, fun,
excitement, and enjoyment). They create social-relational value through “glamour girl parties”
(pampering and friendship bonding), “karaoke nights for moms” (network benefits and personal
interactions), and special certificates and photos for first haircuts. Epistemic value is created
through the novelty of themed chairs (such as a Harley-Davidson motorcycle, a Barbie car, and
a sparkling Mercedes) and through the novelty of different hairstyling, and particularly in the
glamour parties that feature different makeup and “updos.” Sharkey’s creates functional value
in terms of appropriate outcomes through their haircutting service product (good-looking styles)
and interactions with employees and systems (no tears). They create symbolic/expressive value
through self-expression (different hairstyles, and some locations offer art classes for kids), and
to some extent, personal meaning in the karaoke nights by means of a personal recording of the
songs sung. The main cost/sacrifice value created is a reduction in the psychological cost (stress
and conflict) of getting a child’s hair cut (making it easier for both the parent and child) through
personable staff and the purchase/consumption environment.
By delineating the value creation strategy of an organization using the framework, marketers
can clearly define product concepts, a new product key success factor (Cooper 2001). By mapping
all of their brands onto the framework, organizations can illustrate their value creation portfolio.
Used as part of an industry analysis, the framework helps marketers illustrate their value
creation positioning relative to key competitors, similar to the “customer value maps” proposed
by Gale (1994)—recognizing that the framework may need to be applied to specific market
segments to achieve an appropriate product–market match comparison. By illustrating gaps in
the value creation strategies of an industry, the framework is useful for identifying value creation
opportunities—either for new products or for how the product concepts may be enhanced to
produce a richer value proposition. For enhanced product concepts, marketers could ask
themselves, for each cell in the framework, whether it would make sense (financially and
competitively) to create additional value in each area. Above given example of Sharkey’s, for
example, does not appear to offer much value through information-related processes. They
could create greater epistemic value (knowledge) by means of information dissemination relating
to active and healthy lifestyles for kids. There is also little value created through interactions
with employees or systems. Greater functional/instrumental value could be created in terms of
appropriate outcomes (safeguards) via product sources by letting kids and parents “see” different
hairstyles on their own heads using video technology. It is recognized, of course, that gaps in the
value map may indicate value propositions for which there is no demand or market.

Competitive Advantage

Not only does the framework help describe product concepts and positioning strategies but it
also helps marketers specify sources of competitive advantage—which value creation processes
they are going to focus on to create the value on which they plan to compete. For example, much
of the value offered by Starbucks concerns:
(1) the purchase/consumption environment where they have developed expertise in facilities
management, interior design, and merchandizing, and

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