Customer value

Consumer Value - most of the definitions characterize it as a value, which is a result of comparison competitive products (A. G. Woodside, M. Gibbert, F. Golfetto 2008). Benchmarking determines a value, which the customer is able to accept in reference to the benefits, costs, functions and all of physical and nonphysical features of product or service.

Monroe (1979) defined it simpler as an equation of benefits / costs.

$V={B \over C}$ where:

• $V={Value}$;
• $B={Benefits}$;
• $C={Costs}$;

In other words, this is a value, which is created by brands, products or organizations and which is appropriate to the price of it. When the company measures its product price should be similar to the customer's expectations to make the amount of sales efficient. Revenue and maximal price of the goods depends on the level of satisfaction and how it fits in the customer's expectations. Price is strictly dependent on material as well as on immaterial features of the product/service. Important in this case is also the area of business and character. Fashion and clothing are good example of the area where brand scales up prices for customers, which are much higher than manufacturing costs but for many clients brand makes a difference. Creating a brand and cares about its clients, who relate to this brand is one of the most important things of present marketing (P. Bartosz 2017). IT devices as well, as art or craft are also much more valuable than their costs of materials and implementation. Innovational character of the product and lower number of competitors can highly increase worthiness.

In practice

Today, customer value is an important thing and the product has to be completely adapted and adjusted to the customer's needs. Globalization and competing on the global level, lead to the focus on customer because customer satisfaction is the key factor to success and efficiency. Big data and marketing data are for the producers, factors or service providers valuable sources of the information. Knowledge about people's and market's needs is a basic requirement to be competitive and effective in business. Many companies have Customers Service Systems to communicate with their customers to know their opinions and to have feedback and to adapt to it (C.J. Ryan, 2011). Moreover, it increases recognition and builds a company's good name (S. Czerniewski 2014).

Customer value — recommended articles

Competitive strategy — Complementary good — Perceived quality — Customer equity — Competitive product — Quality — Substitute goods — Core product — Product

References

• Bartosz P. (2017) Concept of Customer Value Management as Opposed to Development And Growth Of Brand Equity, Organization & Management : Scientific Quarterly, nr 4 (40), p. 5-26.
• Czerniewski S. (2014) The Process of Communicating Customer Value and its Role in a Competitive Economy, Economic and Environmental Studies, nr 3, p. 329-352.
• Dziadkiewicz A. (2017) Customer Value Development in the Light of Design Thinking Approach: Journal of Positive Management, vol. 8, nr 3, p. 58-68.
• Monroe, A. D. (1979) Consistency between public preferences and national policy decisions. American Politics Quarterly, 7,p. 3-19
• Ryan, C. J. (2011). The Best Digital Marketing Campaigns in the World: Mastering The Art of Customer Engagement. London: Kogan Page Limited.
• Szelągowska A. (2012) Customer Value Creation. Theory and Practice. Review of the book edited by Barbara Dobiegała-Korona and Piotr Masiukiewicz Warsaw School of Economics Press, Warsaw 2012.
• Woodside A. G. Gibbert M., Golfetto F. (2008) Creating and Managing Superior Customer Value, Emerald Group Publishing, 2008 p. 166.

Author: Maciej Pietruszka