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How to Make Sure What You Sell Is What the Market Needs

How to Make Sure What You Sell Is What the Market Needs

Why is there so much fuss about marketers having to be knowledgeable about value chain analysis? We could easily just go around using strong advertising strategies. That, however, is not all that is required for a sound business strategy.

The more knowledge you have about the interaction of your product or service with potential customers the easier it will be for you to pair up company potential with customer requirement. If you are a winner at that, you are a winner at marketing!

Michael Porter in his book, “Competitive Advantage”, clearly explains how important the value chain is for a company, and how value is created within the organization [1] is better explained here as well. For the most part, companies would consider value chain analysis as an essential part of their business strategy.

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Senior management is responsible for organizing managers in the Operations, Sales and Customer services to identify the different areas connecting Company value chain to Customer value chain. This will help to discover what the consumer requirements really are.

The phrases involved in a value chain analysis

A proper value chain analysis for your company can considerably improve your company’s efficiency and effectiveness in meeting your customer requirements.

The main factors involved are the following:

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Logistics

This refers to the coordination of information flow and goods coming in and going out of your business organization. A sound analysis of inbound logistics enables the identification of options to lower supplier costs as well as strengthen relationships with potential suppliers. Outbound logistics, gives you an insight relating to the flow of goods and required information to your buyers, is considered to be a crucial distribution and service factor.

Operations

This stage in the value chain involves a variety of procedures, equipment, and workers employed in production, purchase and sale of inventory to customers. Manufacturers aim to produce top-quality products at reduced costs by identifying ways to optimize manpower and equipment costs and getting rid of wasteful production steps. An example of this is by using Platform.ly [2], where marketing is made in automation to achieve lossless tracking and also runs your whole back-end business. Resellers’ operations are further analyzed to further determine ways to improve inventory management and the ability to efficiently merchandise it to buyers.

Front-end Activities

Porter stresses on marketing, sales and support being core front-end value chain activities. Businesses have to repeatedly review and improve marketing research, promotional activities as well as customer support. Effective research aids in getting to know more about your present and future customers. Promotions such as advertising and sales serve to gain consumer attention. Prominent companies are in the constant habit of reviewing their on-going promotional strategies in search of improvement opportunities. Customer retention is essential to long-term success.

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Supporting Factors

Porter implies that a value chain has four supporting factors:

  • Infrastructure
  • Technology development
  • Human resources
  • Procurement

Infrastructure and technology development refer to the construction as well as the development of buildings, supplies, equipment and technology needed to assist current business activities. A thorough analysis of your infrastructure and technology contributes to discovering ways to enhance your structure in order to support customers. Human resources concentrate on the attraction, retention, and motivation of top employees. Procurement is how the purchasing departments focus on routinely reviewing opportunities for getting reduced costs from suppliers or favorable transactions.

What can value chain analysis give us?

Value chain analysis does have important advantages to be considered, such as:

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  • a very crucial role in determining important organizational, tactical as well as strategic issues connected to the business.
  • a very valuable tool in that it helps businesses to fully exploit all possible sources of competitive advantage.
  • applicable to all types of businesses no matter what the industry or business size.

How is value chain analysis insufficient?

As is typical of any theoretical framework, the value chain is not completely flawless. These can be considered as follows:

  • assumed that it is feasible to split company operations into two different categories: primary and support activities.[3] If we were to take a realist viewpoint, this may very well prove to be contrary when considering the many complexities of business operations today.
  • time-consuming for practical application. After all, we are talking about a thorough analysis of all business operations involved.
  • may not be possible to attain all the adequate information needed for the proper conducting of a value chain analysis.

When is it suitable to apply value chain analysis?

There are many different ways of adapting value chain analysis in various industries, some examples are:

Delivery Service

In order to enhance market share as well as brand loyalty, FedEx’s value chain clearly identifies the importance of employee development by using proper human resources plans and improvements in infrastructure.

Food and Beverage

Properly choosing and locating top-quality coffee beans, enhancing trustworthiness by providing top-grade consumer service, and successfully marketing their brands were the most important elements in Starbucks value chain. PizzaHut managed to defeat its competitors by efficiently delivering a cheaper product than just concentrating on premium pricing.

Retail

Walmart is known to use value chain analysis in order to maintain low prices for their customers. By constantly identifying suppliers, comparing in-store as well as online shopping, and developing innovations have contributed to Walmart’s commitment to making it easier for people to increase their savings.

Reference

More by this author

Junie Rutkevich

Game Developer of iXL Digital

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Last Updated on June 22, 2018

How to Nix Your Credit Card Debt in Less Than 3 Years

How to Nix Your Credit Card Debt in Less Than 3 Years

Debt is never a fun thing to be in. But, there are many actions that you can take that will help you rid yourself of the burden of debt once and for all.

By coming up with a set plan, eliminating your debt can feel much easier than constantly thinking about it.

This post will provide some tips on how you can do this to help you nix your credit card debt in less than 3 years.

Hint: there are ways that are easier than you think.

1. Consider consolidating multiple credit cards if possible

This may not be applicable to you, but if you have multiple cards – it is something to consider. Keeping up with multiple bills is time consuming.

It will depend on the balance you have on each. Consolidate ones you can but do not do it to the point that you get too close to the maximum limit. Also, it is ideal to pick the card with the lower interest rate.

Consider if there are any fees or alternatively, rewards, with transferring a balance to another card. Watch out for fees. Note that some cards offer rewards for transferring a balance to them. This is extra cash that can help go towards paying off your debt.

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Having one or two cards can make nixing your debt much simpler than keeping up with the balance of a bunch of cards. Keeping track of paying the minimum towards a bunch of cards is time consuming. Spend the time to consolidate instead to make the overall process simpler going forward.

My tip: Have one main credit card. Have a second one that you use for necessities – such as groceries or gas – that offers rewards for those purchases (a lot of cards do) and set the second one on auto-pay. You should be able to pay off a smaller amount on auto-pay if it is a necessity. If you think you cannot, then you may need to cut down a lot on expenses.

Why do I suggest doing this? Having one thing set to auto-pay is one less thing to think about. One less thing to waste time on. Same idea with consolidating to one main card. Tracking down too many is a hassle.

2. Try to pay the full balance you spent each month at the very least

You need to pay off the amount you are spending each month when that bill comes in. This is the amount you spent THAT month.

Do not let the debt keep accruing while you work on paying any unpaid debt that has accrued. It will become a never-ending battle. Try as best as you can to be current on paying for each month’s expenses when that month’s bill comes out.

If this is a strain, consider why. You may need to cut expenses. Or you may need to consider other cards. Or look at where this money is going.

3. Pay extra when you can – every small amount counts

This cannot be emphasized enough. If you are looking at a lot of credit card debt, it can look daunting, but each extra amount that you can put towards the debt will really add up – no matter how small it is.

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It does not just reduce the principal amount that you have left to pay off, but it reduces the amount that is collecting interest. You will always save money with that reduced interest.

4. Create a plan on how to pay extra

Back to the main point, having this plan is giving you one less thing to think about.

This plan should be a plan that works for you. If it does not work for you, your spending habits, and your views on debt, then it will not be an effective plan.

For instance, if a set plan of an extra $50 (or another amount that you know you can afford) works for you, then do that. Set that aside every month and pay that extra amount. Treat it like a bill. Choose an amount that works for you and pay it like clockwork as though it was a bill you had to pay each month.

Little amounts will not nix it entirely, but they will help tackle it and having a set plan can make it less of a chore. Creating a new plan of how much to put towards it each month is an unnecessary added stress.

5. Cut out costs for services you do not use

If you are signed up for subscriptions that you do not use because of some free trial or for some other reason, cut it out. Your overall financial position will look better.

In turn, that will make cutting your credit card debt easier. Look at your statements to find these expenses. If you do not use them, you may forget you are paying some unnecessary amount each month. Cutting it out can really add up in savings that you can put towards other needed expenses.

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6. Get aggressive about it

Consider these points:

Depending on the interest and the level of debt, you may need to give up a few indulgences. For example, instead of ordering delivery or going out to eat, cook at home. Everything adds up.

Other things may be more of a sacrifice. It may be a trip you wanted to go on, or a daily latte habit you’ve picked up. In these instances, consider how important it is to you and if it’s worth the sacrifice. And if it is a costly expense, think whether you can wait to indulge.

Cutting an extravagant expense can really help make a dent in your overall debt. Try not to add to debt when you are trying to pay it off. It will be a never-ending battle. Make it less of a battle with these tips and it will feel easier.

Bottom line: Do what you can to make this process easier for you. Implement steps that do this. It takes time now, but will help overall. Also, keep track of your spending and paying down of your debts. Which is the next point.

7. Reevaluate your progress at set intervals

Doing a regular check-in can help you see your efforts pay off or maybe indicate that you need to give this a bit more effort. If you check every 3-6 months, it will not feel so much like a chore or feel so daunting.

By doing this, you will be able to better understand your progress and perhaps readjust your plan. Bonus: if you see it pay off, it will feel great to do this check-in. You will get there.

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Finally (and most importantly)…

8. Keep trying

Do not get discouraged. Pushing it off will make it worse. Just keep trying.

Once your debt becomes lower, each monthly payment will reduce the balance more. Why? You are paying less towards interest. It will be a snowball effect eventually and it will become much easier to manage. Just get to that point. And know once you do, it will feel easier and motivating.

Start knocking out your debt today

The best way to eliminate debt is to get started right away. Begin by implementing the above steps and watch your debt just melt away. Try out some of the above strategies and see what works best for you. Soon you’ll be on your way to a debt free life.

Featured photo credit: Pexels via pexels.com

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