Designing and Delivering Superior Customer Value: Concepts, Cases and Applications / Edition 1

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Great companies don't just satisfy their customers, they strive to delight and amaze them. Designing and Delivering Superior Customer Value explains how to continually create customer experiences that exceed expectations. This turns buyers (try-ers) into lifetime customers.
The emerging value paradigm is not only a new way to think about marketing, but a new business imperative in the 21st century. It is the strategic driver that differentiates great companies from the pack. Value connotes many meanings - yet, it is always defined by the customer.

This book stresses the service aspects of an organization - especially customer service, marketing, and organizational responsiveness, and how to create and provide outstanding customer value to the target market(s). With the integrated management perspective used by the authors, you will understand how to blend the delivery of service and quality, together with pricing strategies to maximize the value proposition.

Those companies that embrace customer-driven value-creating methods will gain a competitive edge in the 21st century, those that do not will experience declines. This exciting new book is a guide to retaining your existing customers and to gaining loyal new customers.


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Editorial Reviews

Provides marketing practitioners, managers and executives, and scholars with a guide to designing, implementing, and evaluating a customer value strategy in service organizations. A foundation section examines critical business issues such a creating value, customer orientation, and relationship marketing. Each chapter provides discussion questions. A second section offers 19 detailed examples of how successful organizations create value for their customers, plus case questions. Three more sections consist of condensed articles, exercises, and a customer value audit. The authors are professors of marketing at Nova Southeastern University. Annotation c. Book News, Inc., Portland, OR (
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Product Details

  • ISBN-13: 9781574442403
  • Publisher: CRC Press
  • Publication date: 6/24/1999
  • Edition description: New Edition
  • Edition number: 1
  • Pages: 400
  • Product dimensions: 6.32 (w) x 9.29 (h) x 1.04 (d)

Read an Excerpt

Chapter 1: Customers Want Top Value

Consider the remarkable success of companies such as, America Online, CarMax, Dell Computer, Kinko's, Starbuck's, and Yahoo!. These business pioneers have found better ways to create value for customers with changing needs and wants. Adaptable giants such as American Express, AT&T, Hertz, McDonald's, Marriott, Microsoft, and Wal-Mart have also benefited from customer value thinking. It has helped them design winning marketing strategies to maintain leadership positions in highly competitive markets.

In the 1980s, the battle for customers was won or lost based on quality. As Total Quality Management (TQM) became the rage in business, quality gaps diminished, and companies focused on customer service. Enhanced customer value synthesizes and extends the quality and customer service movements and has emerged as the dominant theme for business success for 21st century companies.

Managing customer value will be even more critical to progressive organizations in our service- and information-based economy. Innovative companies that create maximum value for their customers will survive and thrive; they will carve sustainable competitive advantages in the marketplace. Other firms, those not providing adequate value, will struggle or disappear.

By examining relevant customer value, marketing, and services concepts and applications, this opening chapter accomplishes four objectives. First, we explain why customer value mist be the overall basis for business strategy. Second, we review the size and scope of the service sector and show how service products create value for customers. Third, we offer several key customer valueimplications for forward-thinking managers. We conclude the chapter by discussing the attributes of value-creating organizations.

The Importance of Customer Value

Great companies do not just satisfy customers; they strive to delight and "wow" them. Superior customer value means continually creating business experiences that exceed customer expectations. Value is the strategic driver that multinational companies, as well as entrepreneurial firms, utilize to differentiate themselves from the pack in the minds of customers.

How is it that Lexus can sell sport utility vehicles for $60,000 and Taco Bell can offer meal combinations for less than $4.00, and both are considered good values? Value is the answer - and value is defined by your customers. Companies that offer outstanding value turn buyers ("tryers") into lifetime customers.

What Does Value Really Mean?

The concept of customer value is as old as ancient trade practices. In early barter transactions, buyers carefully evaluated sellers' offerings; they agreed to do business only if the benefits (products received) relative to the cost (items traded) were perceived as being a fair (or better) value. Hence, value is "the satisfaction of customer requirements at the lowest total cost of acquisition, ownership, and use." As an area of formal marketing study, value-based thinking has evolved over a half century; it originated at the General Electric Company in 1947.

According to a dictionary definition, value means relative worth or importance. Furthermore, value implies excellence based on desirability or usefulness and is represented as a magnitude or quantity. On the other hand, values are the abstract concepts of what is right, worthwhile, or desirable. Management's values impact how an organization creates value and, ultimately, its success. The legends about the Frito-Lay sales rep stocking a small grocery store's potato chip rack in a blizzard and Art Fry's intrapreneurial initiative that brought the Post-It to 3M reinforce organizational cultures.

A value-driven marketing strategy helps organizations in ten areas: (1) understanding customer choices, (2) identifying customer segments, (3) increasing competitive options (for example, offering more products), (4) avoiding price wars, (5) improving service quality, (6) strengthening communications, (7) focusing on what is meaningful to customers, (8) building customer loyalty, (9) improving brand success, and (10) developing strong customer relationships.

According to Woodruff and Gardial, a three-stage value hierarchy exists which consists of attributes, consequences, and desired end-states. These levels of abstraction describe the product/service, the user/product interaction, and the goals of the buyer (person or organization), respectively. For example, a new-car buyer may seek attributes such as comfortable seating, an easy-to-read instrumental panel, smooth shifting, a Consumer Reports endorsement, no pressure sales tactics, and a good service/warranty program. At higher levels of abstraction, buyers may want driving ease, no hassles, and reliability (consequences), and ultimately peace of mind (desired end-state).

The Heart of Value: Product Quality, Service, and Price Customer value can be expressed in many ways and is reviewed next. The approach known as QSP states that value is primarily a combination of quality, service, and price. This set of three core ingredients product quality, service quality, and value-based prices - is called the customer value triad. The triad provides a solid springboard for formulating an initial business strategy.

Designing and delivering superior customer value has become a mandate for management. In choice-filled arenas, the balance of power has shifted from companies to value-seeking customers. Value-creating enterprises often differentiate themselves on one key attribute but must meet acceptable threshold levels with respect to quality, pricing, and service; competition provides little room for weakness in any area.

For example, Hewlett-Packard (H-P) is obsessed with new product development and product quality, Nordstrom is renowned for unparalleled customer service, and Wal-Mart stresses "Everyday Low Prices". While H-P, Nordstrom, and Wal-Mart have each created reputations due to a singular attribute, successful retailers such as Barnes and Noble...

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Table of Contents

Customers Want Top Value Becoming Customer Oriented Process and Customer Value Defining and Refining the Value Proposition Defining and Managing Service Quality Communicating Value Through Price Strategies for Adding and Communicating Value Maximizing Value Through Retention Marketing Keeping Customers Through Relationship Marketing Cases AAA Motor Club - Responding to Change Ethyl Corporation - Becoming Customer - Oriented Glaxo Wellcome, Inc. - Internal Marketing Leads to Customer Responsiveness Grateful Dead - Customer Loyalty and Service Quality Harrah's Casino's - Brand Building International Food Ingredients Supplier - Customer Value Analysis Larry Bird's Home Court - Brand Repositioning Motorola - Supply Chain Management Nantucket Nectars - Perceived Quality National Association of Small Business Owners - Customer Retention Par Value - Enhancing Customer Value Pizza Hut - A Customer Loyalty Program Publix Supermarkets - Customer Intimacy Rubbermaid - Market Orientation State Pride Industrial Laundry - Value Chain Analysis Southwest Airlines - Value Added Services Teleplaza, Inc. - Differentiation Time Insurance - A Study of Process Quality Improvement
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