The Business Model Canvas as a Tool of Marketing Mix

Contents

List of figures

1. The role of the business model Canvas and its emergence

2. The business model canvas
2.1 General information about the business model canvas
2.2 Theoretical approach based on the business model canvas

3. Examination and explanation of the nine building blocks in detail

4. Explanation and creation of the marketing mix

5. Summary of all findings and explanation of why the business model canvas is involved in the marketing mix

Bibliography

Index of Sources

List of figures

Figure 1: The nine building blocks of the business model canvas

Figure 2: Template for the Business Model Canvas

Figure 3: Presentation of the four P's of the marketing mix

Figure 4: The Business Model Canvas as a Tool of Marketing Mix

1. The role of the business model Canvas and its emergence

Success - a catchphrase that plays a significant role in today's society. Since success must be visible nowadays and the diligence behind it has lost importance, many entrepreneurs are under very high pressure to perform. They are therefore faced with high challenges that they have to overcome. One of the challenges is to increase the value of the company, so every entrepreneur must be clear about how much the respective company is worth.¹ In order to run a company successfully and to achieve success automatically, it is of particular importance for company managers to have a comprehensive understanding of the functional processes of the company. In order to understand these extremely important functional processes, there is the so-called "Business Model Canvas", which can help to better understand. The Business Model Canvas acts as a planning tool, for designing new business models or for revising older business models.

The planning tool was developed by Alexander Osterwalder. The concept was first introduced in the book "Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers", written by Osterwalder and co-author Yves Pigneur. In the meantime, the book has even become a bestseller, which of course speaks for the concept. The main target group of the literature are entrepreneurs, whose aim is to bring their ideas to the market as innovative, competitive projects.²

In the further course of this work, the Business Model Canvas will first be defined in detail and its functionality will be explained. Then another planning tool is introduced called "Marketing Mix". This is also defined and its procedure is described. This detailed description of both tools is very important to understand their connection. The last section serves to explain why the business model canvas is a tool for creating the marketing mix.

2. The business model canvas

Before the business model is to be explained, a few terms should first be explained, which should serve to make the entire topic easier to understand. Basically, the term "Business Model Canvas" consists of two words that are repeated throughout the work. The first word of the composition is the word "canvas". The term "canvas" means a projection surface or screen on which the schematic representation and structured combination of several elements in groups is possible.

The business model is a designed model, the goal of which is to add value to a company. Because the strategic development of the core business is intended to achieve an increase in value. This increase in value therefore affects corporate finances.³

2.1 General information about the business model canvas

The main idea of the authors is that the canvas should serve to demonstrate how companies can create, convey and achieve value. The Business Model Canvas can be defined as an easy-to-understand visualization system. Because it belongs to the flow of "visual & design thinking" and thus uses a non-linear approach to the creation, which ultimately results in a quickly accessible and easily readable model. The special thing about the Business Model Canvas is, among other things, that it offers companies the opportunity to plan and design their business model on just one page. This peculiarity is called "canvas look". A "canvas matrix", which contains flexible module boxes, enables entrepreneurs to write down their ideas. This visualization and the resulting overview of all ideas at a glance supports faster and more efficient implementation. This highlights priorities and results in the measures to be taken. Furthermore, the plan created by the canvas matrix facilitates the later development of an official business plan and forms the basis for customer discussions.⁴

2.2 Theoretical approach based on the business model canvas

Now that the most important terms have been defined and the model has been explained in general, the theoretical procedure should now be presented exactly. As already mentioned, the model should serve to reflect the ideas within a company using a canvas matrix.⁵ The matrix consists of nine components, which cover the four most important business areas. This includes the customers, the offer, the infrastructure and the financial viability.⁶ The areas to be considered are listed below.

Figure 1: The nine building blocks of the business

Abbildung in dieser Leseprobe nicht enthalten

Source: Marbaise, M., Das Canvas-Businessmodell, 2018, p.6.

Each term listed represents a box. According to a certain method, the separate boxes are entered on the canvas. This should serve to clarify the interaction of the building blocks. In addition, a suitable strategy can be derived from the model for each individual company.⁷

Figure 2: Template for the Business Model Canvas

Abbildung in dieser Leseprobe nicht enthalten

⁸ Source: http://dairdc.com/business-model-canvas.html#

3. Examination and explanation of the nine building blocks in detail

The first building block to be considered is called the "customer segment". The target group for which the company would like to add value is determined in a certain way. Each customer group or organization has characteristics under which they differ from one another. For this reason, a company must choose one or more customer segments and focus on them. Accordingly, companies have to determine their sales channels, assess their willingness to pay and their profitability in order to adapt them.⁹

The "value proposition" module comprises the offering of a company's services or products to its customers. The creation of the value can result from the price-performance ratio, through branded articles as well as through the efficiency of the service or through the quality of the service products. These are all components that contribute to the promotion of company growth, attract new customers and support existing customer relationships. In particular, this increases the company's value. In order to achieve this increase in value, companies must always have an overview of the current market and know which needs are already covered and which are not yet. The services and products of the competition should also be kept in mind.¹⁰

The "Channels" module is intended to reflect on how a company achieves communication and the attention of its customers. This module fulfills important functions for both the customer and the company. For the company, it has the function of drawing customers' attention to the products or services and of continuing to look after customers after the purchase. On the other hand, it offers the customer the opportunity to get an idea of the product or service before the purchase. This interface between customers and companies can be direct or indirect.¹¹

The next building block deals with the topic "customer relationship". A good customer relationship ensures a company the loyalty of its customers and thus the continued existence of the company. The contact between the company, the product or the service to the customer form a development to a certain relationship. This contact can be based on an appealing marketing offer or the consumption of a product or a service experience. Since this component also plays a major role for every company, exact guidelines should be laid down that define the management of a customer relationship.¹²

The Revenue Streams component is the income that a company receives from each customer segment. Nevertheless, every company must be clear about where exactly their income is generated, how high the customers are willing to pay and what the expected performance is.¹³

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¹ Cf. http://haraldpoettinger.com/erfolgsgesellschaft/

² Cf. Marbaise, M., Das Canvas-Businessmodell, 2018, p.4 f.

³ Cf. Marbaise, M., Das Canvas-Businessmodell, 2018, p.4.

⁴ Cf. Marbaise, M., Das Canvas-Businessmodell, 2018, p.5

⁵ Cf. Marbaise, M., Das Canvas-Businessmodell, 2018, p.5.

⁶ Cf. Osterwalder, A., Wegberg, J. T. A., Pigneur, Y., Business Model Generation, 2011, p.19.

⁷ Cf. Marbaise, M., Das Canvas-Businessmodell, 2018, p.6.

⁸ Cf. http://dairdc.com/business-model-canvas.html#

⁹ Cf. Osterwalder, A., Wegberg, J. T. A., Pigneur, Y., Business Model Generation, 2011, p.24 f.

¹⁰ Cf. Marbaise, M., Das Canvas-Businessmodell, 2018, p.11.

¹¹ Cf. Osterwalder, A., Wegberg, J. T. A., Pigneur, Y., Business Model Generation, 2011, p.30 f.

¹² Cf. Marbaise, M., Das Canvas-Businessmodell, 2018, p.10.

¹³ Cf. Marbaise, M., Das Canvas-Businessmodell, 2018, p.12.