“What is meant by the term ‘customer value’? What are some of the issues marketers may experience in trying to operationalize this concept? Introduction:
Customer Value can be explained in simple terms by knowing the difference between what the customer gets from the product/service and what he or she has to exchange in order to get it (may be money). It is very important for any company in the market to understand this difference; if failed to do so, this can be one of the biggest reasons for the product/service failure in the market. According to many researchers, in this ever growing world of technology and social media the organization’s inability of establishing unique and convincing value to their products/services is the main reason for its failure. Keeping its importance in mind, many companies tries to understand what is their customer valuing. However, this can also be one of the most difficult things to understand. There are many factors causing it to be difficult for the marketers overcome this issue. However, for this task we will focus 3 main aspects. Firstly, every customer values different product/service differently. It might be situational or might be only for a definite period of time. Secondly, the market itself! Technology and economic nature change the pace of the global market. With the competition aggressive as never seen before, it is important for the marketers to change their strategies with the ever changing market. Thirdly, some internal factors which make it difficult for organization to bring in customer value.
Gist of Customer Value
No one has made it clearer of this word “Customer Value” concisely than Lamb et al. (2008, 2009) who wrote, “Customer Value is the relationship between benefits and the sacrifice necessary to obtain those benefits.” Which means – if a product is of very good quality and is only obtained by paying a very high price will not be considered as of value by the customers, just like a low quality product which can be purchased for cheap price; but a value of a product is only seen by a customer when the quality of the product meets their expectation at an affordable price. Let’s take an example of coffee; some people love to drink coffee at Starbucks which may cost $10 and some people like to drink coffee from a local coffee shop which may only cost $4. Now, people who drinks coffee at Starbucks expects them to use premium coffee beans (Arabica) which tastes better and so are willing to pay $10 which worth (value) for Starbucks customers. On the same note, people who drink coffee at local coffee shop might just need to satisfy their caffeine addiction and they feel that it is worth for the price they pay. According to Butz and Goodstein (1996), a customer value is the emotional bond between the customer and the company (service/product provider) developed by means of the used service/product. The emotional bond is only developed when the service/product meets the customer’s expectation. Different researchers have defined “customer value” in different ways but it all revolves around words like “benefits”, “satisfaction”, “expectation” and “worth”. If a company who wants to understand “customer value” for their product/service they need to understand more about these words with respect to their customers. But it is not as easy as it seems. Perhaps, even in dictionaries it’s difficult to find synonyms for these words because these words depend on situations. Challenges for marketers
For companies to operationalize “customer value” in marketing their product can only be done by learning their “customers” and “market”. These terms can be very challenging to learn or to understand because of its diverse nature. * Customer’s change is inevitable
Customer’s needs or wants can be situational. Different customers can seek same products/service for variety of needs. Vodaphone has a pre-paid mobile plan that allows customers to make international calls at a cheaper rate...
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