Millennium Pest Control Services - Case Study Example

CONFIGURING, COMMUNICATING AND DELIVERING VALUE FOR MILLENNIUM PEST CONTROL SERVICES 0 INTRODUCTION: Embarked upon manufacturing and retailing pesticides to protect basically the wheat crops, Millennium Pest Control Services also offer consultancy services to farmers on their cultivation related issues. Extensive market research has been carried out by the Marketing Manager of the company with regard to the various products and services that can be manufactured and marketed along with the pesticides. The marketing plan has considered a number of variables including Demographic, Geographic, Behavioural and Psychographic to identify proper market segments, preferred market locations, kind of customers and products and services that can be offered to ensure brand loyalty. Having completed this initial and important part of the marketing strategy, the firm is now in the process of configuring the value, set the price, communicate the set values to the prospective customers and deliver the values to the utmost satisfaction of the customers. 2.0 CONFIGURING THE VALUE: "Consumer-focused marketing is the single most important factor that determines the success of an enterprise. Marketing is not just about selling. It requires a clear and astute understanding of what consumers want and the ability to deliver it to them through the most appropriate channels for a profit. It includes the planning, pricing, promotion and distribution of products and services for consumers, both present and potential." (Katherine Adam, Radhika Balasubrahmanyam, and Holly Born 1999) In today's competitive business environment, achieving the organizational twin objectives of maximizing the revenues and minimizing the costs depends entirely on the organisation's ability to improve upon the technical excellence by adopting innovative methods and improving the value of the products being offered to the customers. At the same time, adopting innovative techniques of production will lead to the creation of organizational values. It is very essential for a firm to constantly aim at the configuration of its value. "Configuring value means defining, creating, branding and pricing the offer" (Mark, 2004) While, the processes of defining and creating values are the crucial tasks in the success of any business, the processes of branding and pricing can be attempted with ease once a proper value is defined and created. The value configuration is a process by which the firm aims to create and occupy an unforgettable place for its products in the minds of the customers. The value configuration describes the ways by which value is created by the company for its customers and the ways by which such creation of value is exhibited as a reflection on the quality of the firm's products and services. This can be achieved by providing the customers the superior quality of the products or services, backed by the after sales services if required. Most of the firms forget the utility and value of the 'after sales service' as an important tool for gaining the brand loyalty. Thus the process of value creation encompasses managing quality in the entire chain of processes until the stage of the final completion of the production or rendering of a service. To define organizational value is a difficult task, as the term takes different connotations under different circumstances depending on the perspectives to which it relates. It can be said that the best known value configuration is the value chain. While Porter's value chain framework (1985) is generally accepted as the common language for representing and analyzing the logic of firm-level value creation, Mark Gabbot (2004) presents the framework of value as an alternative to the traditional 4Ps approach. Adding value to the services and products in an organization is entrusted to the operations management for evolving suitable operational strategies to achieve higher value for the products and services. An organization may adopt all or any of the following strategies for value creation: Trying out different types of market/product combinations Carrying out the business according to a certain set principles without deviation for any reasons Segmenting the markets in an adaptable way to achieve marketing efficiencies Receiving and reacting to the customers' feedback on the value and redefining the value by suitable alterations in the products or processes The Porter's value chain lays out how an entity (e.g. firm, industry, and nation) organizes its activities to design, produce, market, deliver and support its goods and services. The following picture shows an analysis of how value activities performed and interrelated. For a customer value proposition include, access to products, need fulfillment, desire fulfillment, increased choice, new consumption patterns, problem solving features, and interactivity. In the value chain, value is created in the goods or services through efficient production of goods and services based on a variety of resources. The company is considered as a series or chain of activities. Primary activities in the value chain include; Inbound logistics: These include the raw material supplies, knowledge sources, consultancies, supplier management etc. Production: After planning out the strategies, the inbound logistics are put in use to give out a finished product or a full-fledged service component. Outbound logistics: Outbound logistics include taking care of distribution network, inspecting the quality of finished goods and services, planning out marketing and sales strategies etc. Marketing and sales: Marketing and sales forms an important component of the value chain as it is the main interface between the company and the customer. Service: Once the product or service is delivered to the customer, then comes taking a feedback from the customer. This has become very important in order to establish the company's brand equity and customer's loyalty. Futuristic needs are also projected by way of accepting regular inputs from the customer. Optimum value configuration is achieved by the company with active support from; Infrastructure: Company's infrastructure decides the number of customers it can cater at a given time and the kind of workload it can take on. Human resources: It is said that the strength of a chain is as good as the weakest link. Therefore every element in a value chain has a crucial role to play. To come out with a value product the human resources need to be made quality and value conscious. Technology development and procurement: Today technology plays an important role in almost every part of the business process. Be it the e-procurement, IT enabled services; e-business etc. technology has a say everywhere. Therefore a company will have to be technology savvy for being valued as a quality conscious company. Companies and organisations are also affected by the value of chains of supporting companies, supplier companies etc. Therefore, the total value chain includes the value configuration of such organisations as well. Branding and Advertising are used to convey information about the products and services to the customers. In addition companies also tell customers about their products in other ways-most notably through the product itself. This is possible when the company is able to establish a reputation for itself. With the help of such a reputation companies are able to command large price premiums as well. Giving effect to all the discussions about the value configuration for Millennium Pest Control Services, the Operations Management Department should be entrusted with the responsibility of: Collection and storage of complete data with regard to the customers, supply sources of raw materials, periodical product-wise, region-wise sales analysis, field officers' feedback on the customer opinions on the products, suggestions for improvements. Details of all the production processes involved in the making of the product or delivering the service with the possibilities for any suitable modification to increase the value. Complete integration of the logistics and distribution of the Pesticides as they need to be reached to remote corners in the rural areas. This may involve identifying and appointing small retailers or distributors on a commission basis at the primary district levels for an efficient distribution of the products. Coordinating continuous Research and Development activities within the company to identify and commercialise new products and services before the competitors flood the market with their products. 3.0 PRICING: Setting the right price is the challenging task for any enterprise. The prices should be neither low nor high. "In general, prices are set by production and marketing costs at the lower end, while the upper limit is set by what your customers are willing to pay, how much competition you have, and your own desired profits. It pays to figure your costs and set your prices accordingly, rather than just going by what others are charging; steady, consistent prices encourage steady, consistent customers." (Katherine Adam, Radhika Balasubrahmanyam, and Holly Born 1999) Prices can be determined by adopting Break-even analysis and Marginal Costing or simply a cost plus pricing policy can be adopted by Millennium Pest Control Services. However the prices: Should be neither too low nor very high making the products uncompetitive Should compete in the market on the basis of quality and service Should command respect in the market, as a result of brand loyalty. 4.0 COMMUNICATING VALUE: In managing any enterprise communication performs a very crucial role. In general the market communication helps a firm in: Building a brand Creating a brand loyalty Increasing sales Cutting costs Assessing customer preferences Forecasting changes in demand structures Collecting vital information on competitors' products and performances The communication style adopted by a company is essentially determined by their understanding and assumptions about: i. What motivates other people to act: The problem to be solved is seen to be how to cause the customers to behave in a manner advantageous to the company. ii. The effects of communicative behaviours: It determines how available communication activities work. The problem here is how to get desirable behaviour to come about through communication. Marketing communication involves much more than product/ service promotional campaigns. Promotional communication (i.e. communicating to promote) offers products and their providers as need satisfiers. 'Marketing' is concerned with much more than selling. The overall task in marketing communication is to create and retain customers by defining, producing, and delivering value. This involves studying and analyzing the sociological aspects of the customers. The customer will commit himself to the product only if he finds it satisfied his personal needs and could relate it to the society and environment around him. This correlation is carried out by the marketing communication team. In today's market driven economy, the art of communication to existing customer/ consumers as well as prospective customers/ consumers takes a great deal out of the managerial brain storming sessions. The communication is said to be successful if 'a customer goes to buy the shoes of a particular brand, not for keeping his feet warm and dry but because the shoes make him/ her feel masculine/ feminine, rugged, young, glamorous etc.' Now a days corporations are supposed to remain in continuous touch with customers, suppliers, bankers, government and the general public. Some of the communication happens to be casual; some is made to be informative while some other is designed to be persuasive (Kotler, 1974). For example, Coke and Pepsi form a duopoly in the soft drink market. This rivalry has given a new tem to us, the 'Cola War' after the launch of aggressive advertising campaigns of mutually-targeted television commercials and marketing campaigns in the 1980s and 1990s between Coke and Pepsi. To communicate value, it is essential that Millennium Pest Control Services prepares a marketing plan. Marketing plan is a way of achieving something within the available resources and time limits. Such a plan basically involves, setting objectives and selecting strategies accordingly. In order to make the 'communication' process more user friendly the customer needs to be approached at his/ her place of convenience. Hence the field officers appointed by the Millennium Pest Control Services should make periodical visits to the customers' places and make their on the spot reports and send them to the company on the feedback they receive from the customers. It is indeed very important to be seen regularly in the media, so that the awareness level remains high. This is another factor the Company should consider by placing suitable advertisements in the various print and visual media. A positive image in the media is a distinctive plus for any business. For communication to be effective, the Company needs to be in touch with its environment. Continuously monitoring the environment and following the leads is key to a successful communication strategy and hence for the business venture. Studying different aspects of environment like social, political, legal, technological, etc and taking corrective and adaptive steps accordingly helps in the growth of the Company. 5.0 BUILDING BRAND: In those good old days it was assumed that if sales are good then no effort is required towards brand building as such. But in the present day context the customers are needed to be reminded regularly about the 'brand', they are using. Of late reputation has become simply a dimension of brand. Millennium Pest Control Services should remember that only publicity campaigns are not enough for building brand, but they are needed to be backed by a value product range and reliable services. A strong brand is only the start of a Balanced Brand. Without the support provided by a strong reputation, it can be toppled easily. Therefore the Company should strive to make regular investments towards attaining value communication and thereby building and retaining the brand. Brand maintenance efforts also require that the company avoid an adverse publicity which often results if the company's values and interests come in clash with those of their stakeholders like customers, employees, shareholders, and community members. Often well-known and seemingly successful brands suffer from this kind of backlash. The Company should also direct its efforts in generating a real value for the consumer by perceiving and projecting the brand in a differentiable, special and attractive manner from other rival brands. When the Company is successful in generating the brand value for the consumer, larger benefits can be expected. This creation of value has obvious benefits like, It results in generating greater loyalty from the customers by increasing the value offered to them It allows for a reduced vulnerability to strategic marketing moves by competitors and market crises It reduces the elasticity of demand facing a price increase as a result of the overprice a consumer is willing to pay for a brand that offers a greater value It helps generating trust and support from the distribution channels already stimulated to work with higher value brands. The company apart from putting all its efforts to build a good image for its brand should also keep in mind that in the market driven economy, consumers have different reactions before the actual purchase decision is made. There is every possibility that the customer reacts differently to a known brand and an unknown one. A real brand equity for a consumer is brought forward from the relevant knowledge of the brand with a set of favorable associations in a given purchase decision context. 6.0 DELIVERING VALUE: The final product and quality is to be valued by the customers, and the value that has been added to the product has to be seen in relation to the customer's needs and expectations. There are both external and internal customers. The external customers are those who buy, use of in any way affected by the goods and services of the company. The internal customers are the employees and other internal stakeholders. Once the product is delivered, both types of customers must appear to be satisfied. In delivering the value, Millennium Pest Control Services should bear in mind the following factors: Building an emotional bond with the customer will increase their perception of the value the company is delivering to them. Differentiating in the modes of delivery, packaging and pricing also form part of the overall value component. For example attracting the customer towards the goods and services with attractive packaging is an important aspect of retailing business. The presentation method selected as a part of marketing the product should adequately describe the product explaining its use and providing all relevant information like pricing, how to handle, product options, price discounts etc. Marketing changes are always linked to the profile of the consumer and methods of consumption. Winners will invariably be those companies that are offering more value for the customer's money. Today's commercial environment requires businesses to seek greater product and process variation (flexibility) through agility and responsiveness. Responses to flexibility could be external and internal response to customer value demands. External response to customer value demands include; Product and service combination flexibility Mix flexibility Volume flexibility Logistics flexibility Monetary flexibility Contact flexibility While the internal responses include; Functional flexibility Numerical flexibility Financial flexibility Technological flexibility Temporal flexibility Millennium Pest control Services in order to become a world class organizations should implement the value proposition and TQM strategies to aim at a continued better performance. The Company must be amply clear that; i. Value and Quality has no substitute. ii. The Company must consider improvement in value propositions as a means of bringing in product differentiation. iii. The Company must understand the needs of a customer and 'must not' underestimate this need. Once a product is delivered, the follow up action and taking feedback will let the Company know whether the customer has shown any inclination for repeat purchase. A repeat purchase will make the company aware about the value of its reputation. Follow up phase of delivering value includes; Customer education of products purchased: Guiding the customers about the products, its distinctive features, comparison with competitor's products and availability of range of products form the stable of the company. Reasoning with dissatisfied or less than satisfied customers: Their could be some customers who indicate that they no longer want the product/service. Company will have to understand where exactly it went wrong in its value proposition, and try to do away with those factors. Rewarding and recognizing customers for their ongoing business: Loyal and valued customers need be rewarded suitably with still better value addition in products and services. Optimizing customer needs: With time the customer preferences and needs may undergo some changes, therefore the company can help his needs by helping them to change to the appropriate products/services as his needs change. Fig: Growing the Business: How a Growing Firm Adds More Value (Source: 3. Kay, 1995) CONCLUSION: REFERENCES: 1. Gabbot, Mark (Editor), (2004,) Introduction to Marketing, A value exchange approach, Pearson Education Australia (a division of Pearson Australia Group Pty Ltd.) 2. Katherine Adam, Radhika Balasubrahmanyam, and Holly Born (1999) Direct Marketing Appropriate Technology Transfer for Rural Areas http://www.attra.ncat.org/attra-pub/PDF/directmkt.pdf 3. Kay, John (1995). Foundations of Corporate Success - How Business Strategies Add Value. Oxford: Oxford University Press, Oxford Scholarship Online. Oxford University Press. 27 January 2007 4. Porter, M. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. Free Press, New York. 5. Philip Kotler, (1974), Marketing Management, 2nd Ed., Prentice Hall, NY. Read More