Customer Value and Value Delivery Process, customer value in marketing, Marketing Management, MBA

Summary

The transcript discusses the concept of customer value, emphasizing its importance in marketing and business. It explains how value is perceived differently by individuals based on their needs, wants, and economic capabilities. Through examples like Apple and Samsung phones, the script highlights the role of customer perception in determining the worth of a product. Additionally, it outlines the modern value delivery process, which includes steps like segmentation, targeting, positioning, product creation, pricing, distribution, and communication. The focus is on how businesses must adapt to customer expectations and competition to successfully deliver value.

Takeaways

• 😀 Customer value refers to the importance or usefulness of a product or service for a specific customer, depending on their needs and perceptions.
• 😀 Different customers perceive value differently; for example, an MBA student might value a marketing management book more than an engineering student, who would prioritize an engineering book.
• 😀 Value is the perceived benefit divided by the resources (money, effort, time) spent to obtain that benefit, such as how much a customer pays versus the benefits they receive.
• 😀 Customer value is subjective, meaning something valuable to one customer may not be perceived as valuable by another.
• 😀 Apple and Samsung smartphones are perceived as valuable by different customer segments. For example, high-income customers may prefer Apple for its perceived quality, while cost-conscious customers might find Samsung more valuable.
• 😀 The value delivery process involves multiple stages, including product creation, pricing, promotion, distribution, and after-sales service.
• 😀 In the traditional view of value delivery, businesses focused on two main steps: creating the product and selling it.
• 😀 Modern businesses must focus on segmenting the market, targeting specific segments, and positioning the product effectively before creating and delivering the product.
• 😀 The three phases of modern value creation and delivery are: choosing the value segment, provisioning the value (product development, pricing, distribution), and communicating the value (advertising, promotions, sales communication).
• 😀 Value delivery today requires businesses to consider customer needs more strategically, focusing on personalized offerings and effective communication, especially in a competitive market.
• 😀 Successful businesses are those that can effectively create, deliver, and communicate value to their targeted market, balancing customer needs with profitability.

Q & A

What does 'customer value' mean in the context of marketing?

Customer value refers to the perceived worth, importance, or usefulness of a product or service to a customer. It is based on how the product meets the customer's needs or expectations, considering factors like functionality, emotional benefits, or price.

How do customer perceptions of value differ between individuals?

Customer perceptions of value differ based on individual needs and circumstances. For example, a marketing student might value a marketing management book more than an engineering student, while an engineer might find value in an engineering textbook. This indicates that value is subjective and can vary between customers.

How is customer value calculated?

Customer value is calculated by dividing the perceived benefit from a product by the resources (like money or effort) spent to obtain it. This could include economic, functional, or psychological benefits, and customers evaluate the value based on the total benefit they derive compared to the resources they invested.

What is the relationship between perceived benefit and the resources required to obtain them?

The relationship is encapsulated in the concept of customer value. It is the ratio of perceived benefit to the resources used to obtain those benefits, such as money, time, and effort. A higher benefit relative to the resources spent signifies greater customer value.

How does customer value affect product selection?

Customer value greatly influences product selection because customers choose products that offer the most benefit for the least effort or cost. If a product delivers high perceived value, customers are more likely to purchase it, whether it is due to functional, emotional, or economic reasons.

What does 'value delivery process' mean in business?

The value delivery process refers to the steps that businesses take to create and deliver value to customers. This includes stages like product development, pricing, promotion, distribution, and after-sales services, all aimed at ensuring the customer receives the expected value.

What are the traditional and modern views on value delivery?

The traditional view of value delivery was focused on two main steps: making the product and selling it. In contrast, the modern view involves a more sophisticated approach with three key phases: choosing the value segment, provisioning the value (developing the product and pricing it), and communicating the value (marketing and promotion).

Why is segmentation important in modern value delivery?

Segmentation is crucial in modern value delivery because it allows businesses to target specific customer groups with tailored products and messaging. This increases the likelihood of meeting customer needs, as each segment has distinct preferences, making the product more valuable to them.

How does communication of value impact customer perception?

Effective communication of value ensures that customers are aware of the benefits a product offers. This can be achieved through advertising, sales promotions, and direct communications, which help customers understand how the product meets their needs, thus enhancing their perception of value.

What role does customer feedback play in the value creation process?

Customer feedback plays a critical role in the value creation process by providing insights into how well a product meets customer needs and where improvements can be made. It allows businesses to refine their products, marketing strategies, and overall customer experience to increase value for their target market.