MRKT 354 Lecture Notes - Lecture 7: Gmail, Operating Expense, Product Differentiation
Document Summary
Value innovation: cost savings are made by eliminating and reducing the factors an industry competes on, buyer value is lifted by raising and creating elements the industry never offered. Influences strategies that companies in the industry can compete on (differentiation, cost) Successful cases: nintendo wii, removed hard disk and dvd functionality, reduced graphic quality, opened a new market to non-gamers. Introduced wireless motion control: cirque de soleil, removed live animal act, captured new audience of adults and corporate clients. Differentiation and cost advantage (2 ways to create competitive adv. ) performance benefits - cost of purchase= customer value. Businesses with differentiation advantage or cost advantage find it easier to attract and retain customers. Above average performance benefits = positive customer value= higher roi. Marketing advantage? (nike: dell has a cost advantage: lower gross margin but highest sales-to-assets ratio. Very efficient asset management: apple has a differentiation advantage: innovation and brand loyalty.