The integrated value proposition design framework was developed over the seven months from March 2013 to November 2013 at a leading telecommunications company in South Africa. The integrated value proposition design framework is a combination of the techniques that were recognised as beneficial to the value proposition design process, along with various additional methods, tools, and processes that delivered an integrated approach to customer value proposition design. Within the case study period of observation and contribution at the telecommunications company, the unlimited post-paid price plan product was developed from concept development to concept design. Given that the organisation already had the necessary infrastructure in place to support the development of the product, the concept development and design were the major phases within PLM that would guarantee the success of the product.
The implementation of the integrated value proposition design framework on the unlimited price plan product delivered a top-down approach to design and validate the product’s customer value proposition elements. Early on in the concept development effort within PLM, the implementation of the functional tasks within the framework provided a very clear focus on which product value propositions had to be included to realise the marketing objective, and contrariwise.
The product development team misunderstood how the product would realise the marketing objectives. One of their most important marketing objectives was to grow the average spend per user; but, given that the price plan would most likely be adopted by customers who spend more than the monthly subscription fee, this marketing objective was highly unlikely. At the beginning of the product development effort, the development team’s lowest objective was for the product to drive customer acquisition. The product was coupled with very appealing customer value proposition elements that would most probably result in customer acquisition, which was validated with the framework. Once the product development team had recognised its potential to acquire customers, the customer value propositions that resulted in customer acquisitions were expanded even more. For example, the initial data bundle – which was the largest data bundle on offer in the market at that time – was replaced by an unlimited data bundle that exceeded the industry offerings by far. The airport lounge access was coupled with a competition offering the customer who adopted the product within a certain period a major prize that was in line with the airport lounge value proposition.
The stochastic simulation and forecasting model that supports the functional tasks within the framework delivers a way strategically to validate the development of the unlimited price plan
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product customer value propositions. The product lifetime uptake model is a foundation on which the framework implementation team can build what-if scenarios. An example of a typical scenario analysis exercise was provided, and in that way the organisation could anticipate what the product uptake would look like in different market scenarios.
The CLV calculations, in combination with the product lifetime uptake model, deliver an estimation of the goodwill firm value of the unlimited price plan product. The NPV of the unlimited product is an indication of what the product is worth at this moment, yielding R 107,216,885. The NPV worth of the product validates the implementation of the customer value proposition elements.
The integrated value proposition design framework is concluded by delivering a customer segment rate card that summarises the customer segment in terms of its key parameters, along with a one- page summary of the unlimited price plan product – all of which makes information feed-back possible in the implementation of PLM.
The unlimited product case study is a clear demonstration that the implementation of the integrated value proposition design framework can be successfully executed in a new product development effort, and that the framework can optimise the PLM by shifting the organisational focus towards customer-centricity.
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8 CHAPTER EIGHT: CONCLUSION
The research assignment set out to shift an organisation’s PLM focus from being predominantly product-centric to being customer-centric. The research assignment was conducted on the premise that the customer-centric shift within PLM can be achieved by formal practices in the design of customer value propositions.
The five main causes of problems found in the literature (Chapter 1, Section 1.1) were converted into a research problem statement. These five causes of problems within PLM pointed to two main problems of PLM implementation that the study attempted to address. The research problem stated that the main problems associated with the current methodologies of PLM implementation are that PLM has a strong product-centric focus, and that there is a lack of integration between resources, stakeholders, data, and business processes.
The first four causes of problems within PLM were management’s misperception about PLM, universal product lifecycle management issues, integration and communication issues within the PLM, and PLM complexity. These pointed to a universal problem: a lack of integration and communication within PLM. This problem is addressed in the study by making use of a framework that promotes multifunctional team integration and business process parallelisation.
The fifth cause of problems within PLM – a product-centric versus customer-centric focus – pointed to a universal problem: that PLM has a strong product-centric focus. This study addressed the problem by introducing best practice customer-centric processes and methodologies into PLM by means of the framework.
An engineering approach was employed to deliver the integrated value proposition design framework. The framework took customer value propositions – which are usually defined subjectively, with few concrete methodologies to measure their actual business impact – and transformed the design of the customer value propositions into a meticulously chosen and robust process. The value proposition design process holds the organisation accountable for the customer value propositions, because they are in line with the greater organisational objectives.
This chapter presents the conclusions of the research assignment. First, the empirical findings are listed. Then the procedural and theoretical implications of the research assignment are stated, the
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limitations of the research assignment are discussed, recommendations are made for future research opportunities, and a concluding statement is offered.