CUSTOMER VALUE

Customer Value (Benefits) in: Product Design and Product Functionality

Customer Value (Benefits) in: Product Design and Product Functionality

Introduction

As there has been a rapid growth in the development of new product, the main aim behind these development for any organization is to satisfy the customers and provide them value for each dollar they spend for the acquisition of the product and deliver the most attractive product align with the product functions and design desired from the side of customer. Such strategies for marketing the products have been the most efficient ways to get the marginal increase in the profits and sales of the company (Danneels 2001). The commitment from the end of resource is required for each and every change that is brought in the design of product for the improvement in perceived value by the customer.

Discussion

How customers perceive the value of a product or service?

Customers mostly perceive the "value" of a product or service by putting two things in balance:

On one side: All the benefits they get from owning or using a product or service.

And another: The price or all the costs of purchase, consumption, usage, design, functions and features.

The difference in this operation (benefit less cost), comes to represent the "value" perceived by customers, which is compared with other products on the market.

To better understand this statement, recall formula (basic) used by accounting departments to determine if the company wins or loses money when you perform an operation:

Total revenue - Total costs = Profit for the company

Similarly, most customers make a transaction (conscious or unconscious, rational or irrational) to determine whether they win or lose by making a purchase, using the following formula:

Total Benefits - Total Costs = Profit for the customer (value)

As expected, the client will tilt to the brand that gives it the highest profit margin (value), leaving out the options offered by other competitors. (Christensen 1996)

A very important detail in this analysis is that the perception of the "benefits" that offers a product or service varies from client to client. For example, some will put more emphasis on functional benefits such as: size, weight, shape, ease of use, durability, etc. Others are more inclined towards the aesthetic benefits, such as: How attractive is the product, how friendly are the people who provide the service, etc (Danneels 2001). Also, there will be another group that leans more on the psychological benefits, such as: Peace, security, self-acceptance, ownership, etc. Another group of people will lean more towards service-based benefits that are offered as a bonus, for example, training, warranties, maintenance, upgrades, etc. (Franke 2003)

Similarly, the factor "price" refers not only to the list price or offer that has a product or service, but involves several additional issues, such as Adam Smith noted over 200 years ago: "The price something real is the tangle of difficulties in acquiring it. Therefore, the total cost or the actual price to consumers generally involves the following: the money price, the cost of time spent to make a decision, the psychological costs and ...