By : - Sandeep

Anand
In a business context, “Value”
implies stakeholder satisfaction i.e.
not only the customer but also those
of employees, suppliers,
shareholders, the investment market
influencers, the community & the
government.
 Suppliers

Production Flows
Monetary Flows

Input Inpu
Paymen t
t

Business

Product Product
Price s

Customer
 Low Potential High Potential
Value Value
High Current High Current
Value
Grow these Value
Keep these
Current Value

customers customers
------------>

Low Potential High Potential

Value Value
Low Current Low Current
Value
Should you spend Value
Grow these
money here? customers
Potential Value ------------>
 Band has suggested there exist
some basic criteria or a customer value
model that has a basis in economics.
The economists’ concept of utility is
similar to that of value in a business
context.

It will be recalled that to form,

possession, time & place utilities were
added convenience, choice, information,
communication & experience as aspects
of utility that are important in customer
satisfaction. It follows that during any
purchasing situation certain attributes of
a product or service will represent utility
or value to the purchaser.
 Product support
(33%)
ThisMaintenance
is
processpart of
the CQI
PREDICTIVE
(16%) model.
the value
This Installation
tells you
(54%
process
which value driver,
Quality
(14%)
(CQI)
)
Imag
These are the managerial
parts of the model. This tells
youe which Valu
Product or
Image, quality
Price,
best (13%)predicts Quality (CQI)
Loyalty
value, and what
theSales process
relative
components are
(20% e having the
(11%)
predictive power greatest impact on customer
is. This
customer
part
Product of the
mix
value
)
Price
perceptions of value, and
(9%) what their relative impact is.
model
the
describes
trade-offs
Printing features (26%
among (3%) Quality,
Image, and Price, )
andFeeder
alsofeatures
tells the
extent (1%)to which
 Each customer value model is product/market
specific, because each market or market segment defines
value differently for each product line under
consideration.

Customer Value Criterion is defined as an

attribute or characteristic of a product or service
considered by a purchaser to be a primary reason for
selecting a specific product or service because it
enhances the value of the purchaser’s output or improves
Some Generic Customer Value Criteria are : -
their lifestyle.
• Security : Warranties, Price
Guarantees
• Convenience : reduced ‘preparation’
time, availability
• Performance : Quality features, time
advantage
• Economy : Relative price advantage
• Reliability : durability in use, stock
period.
• Value is determined by the utility combination of
benefits delivered to the customer, but there is a cost to
the cutomer of aquiring such benefits.

• Value is preferred combination of benefits compared

with acquisition cost.

• Internally, the response to customer expectations is the

value proposition, which is a statement of what value is to
be delivered to the customer. Here the decision is to be
taken place.

• Externally, the value statement is the means by which

the organization positions the offer to the target customer.