Mgmt 587b Customer Value Management Case
MGMT 587B: Customer Value Management
Subimal Chatterjee
Professional MBA Program (New York City)
Sept. 13 and 20, 2014
Customer Value Management: Readings and Cases
MGMT 587B: Customer Value Management
Binghamton University
THIS PRINT COURSEPACK AND ITS ELECTRONIC COUNTERPART (IF ANY) ARE INTENDED SOLELY FOR THE PERSONAL USE
OF PURCHASER. ALL OTHER USE IS STRICTLY PROHIBITED.
ISBN 1269608886
XanEdu™ publications may contain copyrighted materials of XanEdu, Inc. and/or its licensors.
The original copyright holders retain sole ownership of their materials. Copyright permissions from third parties have been granted for materials for this publication only. Further reproduction and distribution of the materials contained herein is prohibited.
WARNING: …show more content…
Customer value = perceived benefits minus perceived price
The horizontal axis quantifies benefits as perceived by the customer; the vertical axis shows perceived price. Each dot represents a competitor’s product or service.
Higher-priced, higher-benefit competitors are toward the upper right; lowerpriced, lower-benefit competitors are at the lower leƒt.
Customer-perceived benefits
100
THE McKINSEY QUARTERLY 1997 NUMBER 1
3
281
SETTING VALUE, NOT PRICE
If market shares hold constant (and if you have the right measurement of perceived benefits and perceived prices), then competitors will align in a straight diagonal line called the value equivalence line (VEL). At any desired price or benefit level, there is a clear and logical choice for customers on the VEL. So competitors aligned on the VEL say in such a market that “you get what you pay for.” The clarity of that choice almost defines a market in which shares are stable. (Note that while market shares might be stable for competitors along the VEL, their shares might not be equal. Again, more on this later.)
Exhibit 2
Share loser
E
C
A
Share gainer
VE
ad V
va
Subimal Chatterjee
Professional MBA Program (New York City)
Sept. 13 and 20, 2014
Customer Value Management: Readings and Cases
MGMT 587B: Customer Value Management
Binghamton University
THIS PRINT COURSEPACK AND ITS ELECTRONIC COUNTERPART (IF ANY) ARE INTENDED SOLELY FOR THE PERSONAL USE
OF PURCHASER. ALL OTHER USE IS STRICTLY PROHIBITED.
ISBN 1269608886
XanEdu™ publications may contain copyrighted materials of XanEdu, Inc. and/or its licensors.
The original copyright holders retain sole ownership of their materials. Copyright permissions from third parties have been granted for materials for this publication only. Further reproduction and distribution of the materials contained herein is prohibited.
WARNING: …show more content…
Customer value = perceived benefits minus perceived price
The horizontal axis quantifies benefits as perceived by the customer; the vertical axis shows perceived price. Each dot represents a competitor’s product or service.
Higher-priced, higher-benefit competitors are toward the upper right; lowerpriced, lower-benefit competitors are at the lower leƒt.
Customer-perceived benefits
100
THE McKINSEY QUARTERLY 1997 NUMBER 1
3
281
SETTING VALUE, NOT PRICE
If market shares hold constant (and if you have the right measurement of perceived benefits and perceived prices), then competitors will align in a straight diagonal line called the value equivalence line (VEL). At any desired price or benefit level, there is a clear and logical choice for customers on the VEL. So competitors aligned on the VEL say in such a market that “you get what you pay for.” The clarity of that choice almost defines a market in which shares are stable. (Note that while market shares might be stable for competitors along the VEL, their shares might not be equal. Again, more on this later.)
Exhibit 2
Share loser
E
C
A
Share gainer
VE
ad V
va