Subject overview 2020 MKTG90037 PDF

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Subject overview of Managing for value creation Semester 2 2020...

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MKTG90037 MANAGING FOR VALUE CREATION SUBJECT GUIDE Semester 2 2020

Prepared by A/Prof. Erik A. Mooi & Dr. Fang-chi Lu

Department of Management and Marketing Faculty of Business and Economics

Subject Outline Introduction Welcome to MKTG90037 Managing for Value Creation! While it is well accepted that the fundamental role of organisations is to create value, the challenges managers face includes understanding how they can create value, measure value, and appropriating value consistently and sustainably across the organisation. These challenges represent some of the most difficult decisions faced by managers. This subject introduces students to how value is created as a firm interacts with its key stakeholders, including customers, suppliers, shareholders, and employees. The subject starts by introducing the concept of value and the various views and perspectives consumers and business clients may have. After this, we discuss key ways in which firms attempt to create value by working with its various stakeholders. As value cannot be managed without sound measurement, we also introduce several key metrics of value creation. Finally, appropriating value – through pricing – is critical for firms to reap the rewards of value creation. A key focus of this subject is on value creation as a cross-disciplinary and cross firm activity. As such, the focus is on value creation from multiple disciplinary perspectives including strategy, entrepreneurship, marketing, HRM, supply chain management and organisational design. Some examples of the type of issues we will consider are: •

What does customer value mean? How do customers judge value?

•

Companies in the same industry frequently create value for customers in many different ways. What are some of the different approaches and why are they successful, while other companies fail to create successful customer value and ultimately fail?

•

How do we measure value from a financial and market(ing) point of view?

•

How do we set prices? Pricing is a very complex topic and intersects accounting, finance, and marketing.

These are complex questions, but they are typical of the type of issues that organisations and managers have to deal with. In looking at these issues, a variety of teaching and learning methods will be employed to put the issues in the context of contemporary management and organisations. This will be done via a mixture of different teaching methods, including lectures, short videos, case study analysis, in-class discussion and group-based presentations and assignments. Subject Overview and Aims On successful completion of this subject, students should be able to: •

Explain the major factors driving the focus on more effective value creation practices;

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•

Connect all value creation activities undertaken by firms and articulate the extent to which they are mutually reinforcing;

•

Appreciate the importance and role of new product / service development in determining overall value creation performance;

•

Describe theory relevant to the value creation process;

•

Explain the issues and challenges facing organisations managing activities involving value creation in an international context;

•

Describe the role and importance of emerging technologies and business models in creating and sustaining value;

•

Explain the need for coordinated product and process design within the firm, and between members of the value chain;

•

Identify a range of strategies for positioning the firm to maximize value potential in dynamic competitive environments.

The learning outcomes and course content are in reference to the generic skills indicated in the course outline on https://handbook.unimelb.edu.au/2020/subjects/mktg90037

Intended Learning Outcomes Learning Outcomes and Generic Skills To view the subject objectives and the generic skills you will develop through successful completion of this subject, please see the University Handbook: https://handbook.unimelb.edu.au/2020/subjects/mktg90037

Eligibility and Requirements To view the eligibility and requirements, including prerequisites, corequisites, recommended background knowledge and core participation requirements for this subject, please see the University Handbook: https://handbook.unimelb.edu.au/2020/subjects/mktg90037/eligibility-and-requirements

Academic Staff Contact Details Please see the subject LMS site for full contact details of the teaching staff in this subject. Subject Coordinators:

Teaching staff:

Dr. Fang-chi Lu

Email: [email protected]

A/Prof. Erik Mooi

Email: [email protected]

Mike Brooke

Email: [email protected]

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Email Protocol Please use your university email address and not personal email addresses such as Gmail. Emails from non-University email addresses are regularly filtered out by the University’s email system and receipt of your email is not guaranteed. Before asking questions, please read the frequently asked questions posted on Canvas. It is very likely your question will have been asked and answered before.

Lectures Lecture Times As this is a multi-stream subject, details of locations and dates can be found on: https://sws.unimelb.edu.au/2020/. Please use the subject code to search.

1

3rd of August 2020.

Introduction. Defining value concepts

Case discussion introduction (Raytheon, introduced by the lecturer), Discussion of readings, Q&A

Ulaga, W & Eggert, A (2006), “Value-Based Differentiation in Business Relationships: Gaining and Sustaining Key Supplier Status,” Journal of Marketing, 70(1), pp. 119-136 Smith, JB & Colgate, M (2007), “Customer value creation: A practical framework,” Journal of Marketing Theory and Practice, 15(1), pp. 7–23

2

10th of August 2020.

Value models: building value in the organisation

Case discussion LEGO turnaround (Group 1), Discussion of readings, Q&A

4

Prahalad, CK & Hamel, G (1990), "The Core Competence of the Corporation," Harvard Business Review, 68(3), pp. 7991

Further Reading

Required Reading

Interactive workshop activities

Pre-recorded lecture topics

Date Commencing

Week

Lecture Schedule

Zeithaml, VA (1988), “Consumer Perceptions of Price, Quality, and Value: A Means-End Model and Synthesis of Evidence,” Journal of Marketing, 52(3), pp. 2–2

Lusch, FL & Webster, EE (2011), "A StakeholderUnifying, Cocreation Philosophy for Marketing," Journal of

3

17th of August 2020.

Developing business models

Case discussion QANTAS (Group 2), Discussion of readings, Q&A

Treacy, M & Wiersema, F. (1993), "Customer Intimacy and Other Value Disciplines," Harvard Business Review, 68(3), pp. 79-91

Macromarketing, 31(2), pp. 129134

Christensen, MC, Bartman, B & van Bever, B (2016), "The Hard Truth About Business Model Innovation," MIT Sloan Management Review, 58(1), pp. 31-40

Payne, A, Frow, P & Eggert, A (2017), "The Customer Value Proposition: Evolution, Development, and Application in Marketing" Journal of the Academy of Marketing Science, 45, pp. 467-489

Girotra, K & Netessine, S (2014), "Four Paths to Business Model Innovation," Harvard Business Review, 92(7–8), pp. 96-103 4

24th of August 2020.

Business models and market orientation

Assignment 1 presentations (groups 1-4)

Group Presentations (Groups 1-4)

Jaworski, B, Kohli, AK & Sahay, A (2000),"Market-Driven Versus Driving Markets," Journal of the Academy of Marketing Science, 28(1), pp. 45-54 Vargo, SL & Lusch, RF (2004), "The Four Service Marketing Myths: Remnants of a Goods-Based, Manufacturing Model," Journal of Service Research, 6(4), pp. 324-335

5

31st of August 2020.

Customers as stakeholders

Assignment 1 presentations (groups 5-8)

Group Presentations (Groups 5-8)

5

Appel, G, Grewal, L, Hadi, R & Stephen, AT (2020), "The Future of Social Media in Marketing," Journal of the Academy of Marketing Science, 48, pp. 79–95

None

(1000 word written summary due on Friday the 4th before midnight)

6

7th of September 2020.

Co-creation of value with stakeholders

Case discussion Doritos (Group 3), Discussion of readings, Q&A

Grewal, D, Hulland, J, Kopalle, PK & Karahanna, E (2020), "The Future of Technology and Marketing: A Multidisciplinary Perspective," Journal of the Academy of Marketing Science, 48, pp. 1-8 Payne, AF, Storbacka, K & Frow, P (2008), "Managing the CoCreation of Value," Journal of the Academy of Marketing Science, 36, pp. 83-96 Boudreau, KJ & Lakhani, KR (2013), "Using the Crowd as an Innovation Partner," Harvard Business Review, 91, pp. 60-69

7

14th of September 2020.

Managing employees as stakeholders

Case discussion Netflix (Group 4), Discussion of readings, Q&A

Mooi, E, Gahan, P & Ghazimatin, E (2013), “Outsourcing the customer interface?’” Mortgage Professional Australia, 4, pp. 60-63

Saks, AM (2006), "Antecedents and Consequences of Employee Engagement," Journal of Managerial Psychology, 21(7), pp. 600-619. Birkinshaw, J & Duke, L (2013), "Employeeled Innovation," Business Strategy Review, 2, pp. 46-51

8

21st of September 2020.

Sales and procurement

Case discussion TESLA (Group 5), Discussion of readings, Q&A

6

Anderson, JC, Narus, JA & Van Rossum, W (2006), “Customer value propositions in business markets,” Harvard Business Review, 84(3), pp. 91100

Homburg, C & Jensen, O (2007), "The Thought Worlds of Marketing and Sales: Which Differences Make a Difference?,"

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28th of September 2020 (Note: Oct 2nd is likely to be AFL Grand Final Holiday) Nonteaching period Monday 5th of October to Sunday 11th of October)

Measuring value creation

Case discussion Zoos Victoria (Group 6), Discussion of readings, Q&A

Kraljic, P (1996), "Purchasing must Become Supply Management," Harvard Business Review, 61(5), pp. 109-117. Frösén, J, Luoma, J, Jaakkola, M, Tikkanen, H, & Aspara, J (2016), “What Counts versus What Can Be Counted: The Complex Interplay of Market Orientation and Marketing Performance Measurement,” Journal of Marketing, 80(3), pp. 60-78. Harris, M, & Tayler, B (2019), “Don’t Let Metrics Undermine Your Business,” Harvard Business Review, 97(5), pp. 62-69.

Journal of Marketing, 71, pp. 124-142.

Ambler, T, Kokkinaki, F & Puntoni, S (2004), “Assessing Marketing Performance: Reasons for Metrics Selection’, Journal of Marketing Management,” 20(3/4), pp. 475498. Rust, RT, Lemon, KN & Zeithaml, VA (2004), “Return on Marketing: Using Customer Equity to Focus Marketing Strategy,” Journal of Marketing, 68(1), pp. 109127. Gupta, S & Zeithaml, V (2006), “Customer Metrics and Their Impact on Financial Performance,” Marketing Science, 25(6), pp. 718-739.

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10

11

12

12th of October 2020.

19th of October 2020.

26th of October 2020.

Capturing value through pricing (4000 word group assignment due on Friday the 16th)

Case discussion Beats (Group 7), Discussion of readings, Q&A

Creating value for community stakeholders

Case discussion Bendigo Bank (Group 8), Discussion of readings, Q&A

Exam revision/Q&A

Q&A

Hinterhuber, A. (2016), “The Six Pricing Myths that Kill Profits,” Business Horizons, 59(1), pp. 71-83. Hinterhuber, A, & Liozu, SM (2014), “Is Innovation in Pricing Your Next Source of Competitive Advantage?” Business Horizons, 57(3), pp. 413-423. Porter, ME & Kramer, MR (2011), “Creating Shared Value," Harvard Business Review, 89(1/2), pp. 62–77 Luo, X & Bhattacharya, CB (2006), "Corporate Social Responsibility, Customer Satisfaction, and Market Value," Journal of Marketing, 70(4), pp. 1-18

None

Noble, PM & Gruca, TS (1999), “Industrial Pricing: Theory and Managerial Practice,” Marketing Science, 18 (3), pp. 434-454

Luchs, MG, Naylor, RW, Irwin, JR & Raghunathan, R (2010), "The Sustainability Liability: Potential Negative Effects of Ethicality on Product Preference," Journal of Marketing, 74, pp. 18-31 None

Using Lecture Capture Audio and video recordings of lectures delivered in this subject will be made available via Canvas. Note that each week features a 1 ½ hour pre-recorded lecture that can be viewed at your convenience. Note that while you can choose your own timing, you are expected to watch the lecture before the 1 ½ hour interactive workshop.

Assessment Assessment Overview Your assessment for this subject comprises the following: Assessment Task

Individual or Group

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Due

Weighting

Case discussion

Group

As per the schedule

10%

1000 word group assignment

Group

4th of September 2020

20%

4000 word group assignment

Group

16th of October 2020

20%

End-of-semester exam

Individual

As per the exam schedule

50%

Hurdle requirement: To pass this subject students must pass the end of semester examination

Assessment Details

Case Discussion Overview: Each week, a group will be scheduled (Please see the schedule above) to take the lead in a workshop discussion for at least 20 minutes on the nominated case study for that week. The expectation is that the group will work together and be prepared to (1) briefly introduce the company/product, (2) identify and discuss the issues flagged in the case and (3) work towards some conclusion. Most importantly, this case discussion should draw on the concepts and theories as discussed up to that particular lecture. All group members are expected to actively participate but likewise all students in the interactive workshop are expected to participate. For details, please see the Case Study Discussion Guide on the LMS. Assessment Weighting: A mark of up to 10% of the subject grade will be allocated to the group as a whole.

Assignment 1: Value Analysis and Group Presentation in Class in Class Overview: This assignment is designed to deepen students’ understanding of the course materials by applying the concepts/theories students learn in class to real-life examples. Students will work as a group of 4-5 members (by random assignment) to complete this assignment. Each group needs to give an oral presentation and submit a written summary for the assignment. Assessment Weighting: Group Assignment 1 is worth 20% of the total mark for the subject. The task: Each group will need to identify and critically evaluate the value proposition and value delivery of a company, product, or brand from a customer perspective. 1. Topic selection: You can choose any company/product/brand that you like. But you have to choose a company/product/brand with one specific target segment of customers. Please relate this specific segment to a buyer persona. 2. The critical elements of this task include, but not limit to: (1) Concise overview of the market environment of your company/product/brand, e.g., definition, size, growth of the 9

market, major factors or trends that influence the market; (2) Clear description of the target customer segment using theory as discussed in class and using a mix of demographic, psychographic, geographic, or behavioural variables; (3) Critical evaluation of the value proposition using theory, including discussion on sources and types of value created, how the value corresponds to the needs of target customer segment; (4) Critical analysis of the value delivery system using theory, including mapping out the value delivery using Business Model Canvas and discussion on the key activities/strategies used to support the value delivery system, whether the value delivery system aligns with the value proposition and your reasoning. 3. Remember, you are being asked to “critically” evaluate the value creation and delivery of your selected company/product/brand, not just describe the facts or show graphs of growth or success. Make sure that you use the selected company/product/brand as a context to apply relevant concepts/principles/theories you learn from the class (in Weeks 1-3 only). 4. You also need to use quality secondary data to support your analysis. Specifically, you need to include data search from at least TWO databases listed in the FBE Research Databases (https://fbe.unimelb.edu.au/research/for-researchers/research-databases) and provide a proper citation for ALL the references you use. If a particular fact is critical to your argument, please see if you can triangulate this fact by finding a second source. Every source, every idea, and every theory that is not your own MUST be cited (including lecture notes: Lecturer, Lecture Number, Date). Deliverables: 1. Written report including (1) a cover page that includes information about the topic (e.g., the name of the company/product/brand) and the names, email addresses (@unimelb.edu.au only) and student number of all group members; (2) A summary of your analysis up to 1000 words (excluding references/bibliography). According to the university norm, assignments may be +/-10% off the limit (i.e., between 900-1100 words). Marks may be adjusted downwards if you go short/over. The report is to be uploaded via the LMS of the course by September 4th (Friday), before midnight. Please upload your document as a single.doc(x) or.pdf file. All submitted files should be titled: “MKTG90037_Assignment_1_[Mon 2.15pm]_[Company]”. PROOFREAD your assignment before submission. Penalties (a reduction of 10% per day) for late submission apply. 2. Oral presentation: Each group is required to give a 20-minute presentation (including Q&A) during the virtual interactive workshops in Week 4 and 5. There is no requirement to prepare an electronic presentation (e.g. PowerPoint or similar), but please feel free to do this if you think it will assist your presentation (please do not include movies in your presentation). Not all group members have to present. You can freely allocate the effort required for this assignment.

This is a group assignment and during the first interactive workshop groups of 5 people will be formed.

Assignment 2: Comparative Value Analysis Overview: Assignment 2 requires you to compare two organisations that compete in the same industry. This assignment represents not only a good opportunity to integrate concepts/theories 10

you have learned throughout the semester, but also a good exam preparation and revision. You will work with the same group for Assignment 1 to complete this assignment. Assessment Weighting: Group Assignment 2 is worth 20% of the total mark for the subject. The task: Each group will need to select two organizations that compete in the same industry, compare their current value creation strategies, provide suggestions for their future success. 1. Topic selection: It is expected that you re-use the company/product/brand that you analysed in assignment 1 as one of the two organisations that you compare in assignment 2. Re-using the same company/product/brand allows you to avoid prior mistakes and lea...