Value for money

Value for money the analysis of the quality / price ratio allows us to determine the competitive position of the product from two perspectives:

• perceived relative quality - by referring the satisfaction rate from the product to the average level of satisfaction in the market, an advantage or lack thereof in the aspect of matching the product to the expectations of customers is determined,
• relative price index - when referring the product price to the average market price, the product price in the segment is determined. Often, if the prices on the shelf differ from the prices perceived by customers, the analysis should take into account those operating in the customers' opinion

Four groups of products

We can distinguish four groups of products:

• Premium - products with a quality that exceeds competition and prices above the market average,
• Quality at a reasonable price - products with a quality that exceeds competition and prices below the market average,
• Low shelf - products fulfilling customer satisfaction less than the competition at prices below the market average,
• Paid - products with satisfaction below the level of competition and at the same time more expensive than the average offer on the market.

Quality of services

In the service dimension, quality is often assessed by the consumer in a very subjective way and, therefore, not easy to interpret. Therefore, in order to structure the process of service quality assessment by the customer, criteria are given that fulfill the role of a specific template used by the consumer evaluating a certain service. These determinants of service quality are:

• Professionalism and qualifications - consumers buy a certain service to save time and, above all, use the greater knowledge and skills of the person or company providing the service. Therefore, it is important that the service is provided professionally and that the employees have the appropriate qualifications and skills,
• Behavior and attitude - companies must ensure that their employees show a positive and sympathetic attitude towards their clients. Customers evaluate a given company, e.g. after service, cordiality, reliability,
• Flexibility and availability - in the Internet age, customers expect the fastest possible responses, we can provide them with a website,
• Reliability - customers should be convinced that their order will be executed with due diligence. A very important aspect is also to terminate the performance of a given service,
• Warranty and complaint systems - there are disadvantages in every institution, that's why we must ensure our client that in an emergency he will always be able to file a complaint. It is also important to ensure that the complaint will be dealt with professionally and fairly and the client will have a feeling that the company cares for its interest,
• Reputation and credibility - consumers often try to get information about it before choosing a service provider. That is why the reputation of the company is a very important issue

Value for money — recommended articles

RATER model — Best value — Hospitality services quality — Consumer decision making process — Hotel categorization — Client satisfaction — Criteria for selecting suppliers — Customer satisfaction — Rating process

References

• Deming W.E. (1991) Quality, Productivity and Competitive Position
• Juran J.M., Godfrey A.B. (1998) Juran's Quality Handbook, McGraw-Hill
• Lawrence A. (1987) Value for money in taxation, University of London
• Pearson S.D., Rawlins M.D. (2005) Quality, Innovation, and Value for Money @ Jama Network

Footnotes

Author: Martyna Miszczak