CUSTOMER VALUE

What Is Meant By The Term 'Customer Value'? What Are Some Of The Issues Marketers May Experience In Trying To Operationalise This Concept?

What Is Meant By The Term 'Customer Value'? What Are Some Of The Issues Marketers May Experience In Trying To Operationalise This Concept?

Introduction

This paper will discuss the importance of customer value in order to be successful in today's marketing world. Customer value is the amount of gain that he will get from a product or service relative to its cost. Many business people describe customer value as realisation compared to sacrifice. Realisation is a recognized term for what customers get out of their purchases. Sacrifice is what they pay for the service or product.

There are two different models which are developed and tested in a cross sectional survey. The first model suggests having a direct impact of perceived value on the purchasing managers' intentions. In the second model, perceived value is mediated by satisfaction. This research provides with the customer value that can be measured and conceptualized as 2 different, yet complementary constructs (Anderson 1999, 90).

When giving the example of the success of big companies such as IKEA, the DELL, the Decathlon or Amazon to the managers of middle or small sized organisations, they say that they cannot be compared to these companies since they have huge resources and they dominate the world market today. On the other hand, they should understand that before being too large, these companies also faced these kinds of challenges and they efficiently fulfill all the requirements of providing value to the customers. That is why they are big companies now.

These companies now dominate their market but they are not born great, they did not benefit either of special aids, and they were not created in a competitive environment in their favor. On the contrary, they have faced since their inception the competition to the global giants like IBM; when they had absolutely no chance of success. This means they had only one way to be successful in the industry and they adopted that which is to value their customer by providing value-added products and services. They had no competitive advantage that could allow them to do, or superior resources, whether financial or otherwise, or privileged access to the components of value added, a cheaper labor, raw materials or innovative technology, nor obviously a size that would have allowed economies of scale (Anderson 1999, 90). They had no chance, but their powerful competitors could not keep them from succeeding, nor even imitate them. What is more surprising is their success or total failure of their powerful competitors to react when they had all the advantages such as resources and customer experience.

Discussion

There has been a renaissance of the interest in the value which is constructed between both practitioners and marketing researchers. In spite of a development of the research, it is still unclear how the value interacts with the constructs of related ...