In these days, the ceaselessly alteration in customers’ favoring, globalization and the innovation of technology have forced organizations to adapt and operate in ways that have never been done before. Customers have more choice because of product variation and multichannel sales, the number of competitors in market is rising due to globalization and technology has been developed to increase productivity and decrease cost. All these changes have created a shift in doing business, the traditional business centric where firms create value and deliver to the customer is being challenged. The firm-centric view regards value creation happening inside the firm, ascribing both firm and customer distinct roles as producer and consumer and focusing on “targeting and managing the ‘right’ customer” (Prahalad & Ramaswamy, 2004, p.6).
With the development of Internet technology, namely the introduction of Web 2.0 has elevated the communication to a new level where people can interact actively and immediately from anywhere in the world. Customer information has always been valuable source of data that firms and corporations strive to acquire, hence, the technology plays as an important medium for the possibility of customer involvement. Moreover, it seems that consumers are willing to contribute their time and energy to co-create with companies. This co-creation means sharing ideas, comments and knowledge. (Prahalad & Ramaswamy, 2004) As a consequence, more firms and corporations are adapting to the new trend and integrate customer effort into their new products and services development.
The involvement of customer in the process of creating value has redefined the traditional way business is conducted to a ‘customer-centric’ view in which fir...
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...in virtual customer environments: Implications for product support and customer relationship management. Journal of Interactive Marketing, 21 (2), 42-62.
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Ramaswamy, V. (2009). Co-creation of value – Towards an expanded paradigm of value creation. Marketing Review St. Gallen, 11-17.
“This is achieved by either adding value to existing customers or by identifying the value expectations of new customers and coordinating the value chain assets, processes, and capabilities to meet these expectations” (Walter & Rainbird, 2007). In order for customer delight to be made into a core value, the organization would need to take the necessary actions to add it. Moreover, the organization should support the added core value from top down. The organization should communicate this value throughout, provide guidelines and create or implement a system to evaluate its
Churchill, Jr., Gilbert A., and J. Paul Peter. Marketing: Creating Value for Customers. Burr Ridge: Austen Press, 1995.
Businesses reach a particular point in their operations when redeveloping their business model becomes essential for their continued success. A business model consists of four meshing elements, which work in harmony to create and provide value. The elements include customer value proposition, profit formula, key resources and essential processes (Johnson, Clayton and Kaggerman 60). The customer value proposition elements involve the companies coming up with a particular way of creating value for the customers by providing solutions to certain problems. The element is particularly evident when a company develops a new product of services to address some of the customer needs in a convenient or satisfactory manner.
Customer Value is a very important factor to all businesses let along business that supply products or services to the public. Value is relative to each individual customer but many researchers have found a simple way of defining customer value. Customer value equal the result produced for the customer plus process quality divided by the price to the customer plus the costs of acquiring the product (McMurrian & Matulich, 2016). The customer must purchase the product or service and experience it for the company to be able to benefit from the feedback. The four mechanisms within customer value, the results, process quality, price and customer access cost, are all very important for a company to understand in order to fully understand customer value.
To improve the engagement of customer and employee is another main objective. The co-op serve the better goods at a reasonable price to customer for gaining the highest engagement of
Johnson, W.C. and Weinstein, A. (2004), Superior customer value in a new economy: concepts and cases, CRC Press (Google eBook)
Customer value is defined as "the perceived benefit of a product, used by customers to determine whether or not to buy the product" (Lussier, 2006). I do believe that most customer's focus on creating customer value. It is an aspect needed in order to sell anything. A customer would not buy something if she or he did not see the benefit in buying it, therefore, organizations strive to create customer value because they need the customer to see a benefit and to buy the product.
Porter, M. and Kramer, M. 2011, ‘Creating Shared Value’, Harvard Business Review, vol. 89, no. 1, pp. 62-77, viewed 20 August 2013,
Soman,D & Marand, S (2009). Managing Customer Value: One Stage at a Time.: World Scientific Publishing. p9-14.
Value creation by a firm is all about enhancing benefits to its customers even if it may cost higher to do it.
Engagement: Dell could use co-creation (procumer) with customers to engage them to contribute in the creation of new products and services.
For the market strategist, creating customer value is fundamental to both profit-seeking companies and nonprofit organizations. Further, creating superior customer value is a necessary condition for a company securing a niche in a competitive environment and to establish the leadership position in the market. For a healthcare organization, patients are their customers and having customer value is paramount for survival and growth. Hence, this reference will help me understand customer values and product benefits which eventually aids in developing effective strategies for Sparrow Hospital.
Wasserman, Michael. 15 Techniques When Dealing With Customers. My Success Company. 25 January 2005. .
Porter argues that no firm can provide value in all the ways that people wish value to be delivered, so they should select one strategy; cost leadership, differentiation or focus. (Robbins & Barnwell, 2002)
As a result of the above they were giving less importance to customer satisfaction and customer relationship building. This form of strategy conformed to short term business motives. In a globalised and highly competitive world, modern marketing is about concentrating ...