Capturing More Value

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The Group debated on what is value capture. While some opined that the Value capture is process of identifying new things to add value to the company, a majority argued that the Value capture is the process of increasing the perceived value of a product or the service and not correlating it to the input costs of developing the product.

Notes from Discussion

  1. Value capture traverses lines between various functional areas: R and D, marketing, strategy
  2. Value capture is about challenging the status-quo.
  3. Value capture patterns do exist; making managers conscious of those pattern.
  4. Since most organizations focus more on value creation, the article and the

    discussion suggested that value capturing should be given equal attention.

    Notes from Article

1. Innovation (value creation, in traditional sense) isn’t worth much (value capture) if you don’t get paid for it.

Framework needs to be built for developing a common language around value capturing.

Identification/recognition of patterns have led to the following fifteen value-capture strategies under five focal points.

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  1. Price Setting Mechanism

    Value-Based Pricing – price is set to capture a fair share of savings a consumer experiences
    Auctioning- customer decides among themselves by quoting; may end up paying much more

    Demand-driven pricing – dynamic pricing Name-your-own price – auctioning minus disclosure Pay-what-you-want- generally for non-profits

  2. Changing the Payer

    Two-sided market model- consumption is subsidized by the third player
    Changing the payer in value constellation- consumption is subsidized by many players Internal budgeting

  3. Changing the Price Carrier

    Changing the price carrier- part of the experience you hang a price tag on

Bundling and unbundling- a bundle of services / products are priced together

All-inclusive offering- the customer is obliged to buy because of the time-frame/setting

  1. Changing the timing

    Installed-based pricing – securing the revenues for future

    Futures contracting- securing the revenues for future

  2. Changing the segment.

    Target Costing- identifying the new customers Self-segmented financing- coupons

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Balancing We and Me – Need for Privacy in Workplaces

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Balancing we and me article is about the need for privacy versus collaboration at work, with Arniv leading the presentation.
The privacy at work has come a long way and has alternated between the need to collaborate and the need to have privacy at work. It just does not mean the privacy in a physical sense but also the need privacy in the online world as well.

India and China have less space per employee, yet the satisfaction levels of both the country was

better than most other countries of the world. This was attributed to the cultural context in which these surveys may have been conducted.
Ali came in with the point of space management and the fact that the tele-working was a great way for employees to have the privacy that they long for. But the backside of this is that employees can be less engaged and home is not necessarily a great place to work

from continuously.

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Pramod bought in the point of distinguishing between culture and the infrastructure of
the company. A company can have all the tools and infrastructure in place to have a well- balanced work atmosphere, but this is of no relevance if the company culture does not support it.

Ameya bought in the situation in the manufacturing sector. Since there is there is no real office space and most of the work happens on the floor or on-site, the sector may need a whole lot of other reforms.

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Getting clients to take creative risks.

IMG-20141110-WA0006 (1)J. Michael Tasse, Leading a Discussion at the Tongji University Guest House Conference Room, Shanghai, China

Fernanda started off with a brief overview of what is marketing, advertising and what the article is about. Sometimes taking risks is imperative for an organization but sometimes it is not wise to take risks. The advertising agency has to be convinced about the need to take the risks and sometimes needs to convince its clients to take risks.

The Citi group’s billion dollar advertising campaign in the 1990s, the live richly campaign, was the first case study. The case study involved studying the various messages the Citigroup flooded cities like New York. The messages like ‘Your best time is not recorded on Timesheets’ started flooding the streets of New York and spread to more cities subsequently.

It ran from 2001 to 2006 and cost the Citigroup a billion dollars. People were persuaded to live richly and in turn buy equity loans. By appealing to people’s inner desires, family values, joy and happiness, focus was on the everyday role of money. People accepted the message and the bank loan applications went way up.

Another case in discussion was the case of cosmopolitan hotels. We also looked at a campaign of Absolut vodka, an alcohol company which actually started a campaign for the social good.

The focus group of the Citi was discussed. The term used was balance seekers. These are the people who wanted to live richly. Not who wanted to be rich. Also, the group discussed the moral and the financial implications of the Citi bank advertising campaign (Subprime crises). Many people believed that the advertisers are not ultimately responsible for the subprime crises.

There was a consensus that the Citibank achieved it prime target of achieving Brand Differentiation.

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