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Value Chain Process
Michael Porter proposed that the value chain is a tools for identifying ways to create more customer value.
The value chain process consists with nine strategically relevant activities that create value.among them four supportive activities and five are primary activities.the primary activities bringing materials into business,converting them into final products,shipping out final products,marketing them and servicing them.and supportive activities are handled by certain department.
Fig:Generic Value Chain
1.Primary Activities: The goal of these activities is to create value that exceeds the cost of providing the product or service, thus generating a profit margin.
- Inbound logistics include the receiving, warehousing, and inventory control of input materials.
- Operations are the value-creating activities that transform the inputs into the final product.
- Outbound logistics are the activities required to get the finished product to the customer, including warehousing, order fulfillment, etc.
- Marketing & Sales are those activities associated with getting buyers to purchase the product, including channel selection, advertising, pricing, etc.
- Service activities are those that maintain and enhance the product's value including customer support, repair services, etc.
- Firm Infrastructure - includes activities such as finance, legal, quality management, etc.
- Human Resource Management - the activities associated with recruiting, development, and compensation of employees.
- Technology Development - includes research and development, process automation, and other technology development used to support the value-chain activities.
- Procurement - the function of purchasing the raw materials and other inputs used in the value-creating activities.
Levels of Relationship Marketing
There are five different levels identified for relationship marketing thereby improving customer service and customer satisfaction. These five levels of relationship marketing are as follows.
Fig:Levels of Relationship Marketing
1.Basic Marketing – The salesperson sells the products to the customers.
2. Reactive Marketing – The sales person sells the product and encourages the customer to call for any questions,comments or enquiries.
3.Accountable Marketing – The sales person calls the customers to ensure whether the product is working as per satisfaction. Sales person also asks the customer for any suggestions / feedback to improve the service / product.
4. Proactive marketing – The sales person contacts the customer from time to time with suggestions about improved products uses or new products.
5. Partnership Marketing – The company works continuously with its large customers to improve its performance. An example would include General Electric which has stationed Engineers to its third party service centers to improve overall performance.
