Developing appreciation and awareness of the customers needs and values

Value occurs when customer need are satisfied by the provision of

expected goods and service in consideration of some form of payment

Magnitude of Value

Degree to which needs are met exceeds the price paid in exchange
Is one of the way its magnitude can be measured

Concept of Value stick

WTP

Willingness
to
Pay

WTP -Reflects the utility

that the customer
derives from
Consuming that
Product or service

Concept of Value stick

WTP

Quality ,reliability
Availability, Variety
After sales service
Convenience

Cost
Suppliers IP
Manufacturing KH
Transport cost
Material Cost

V
A
L
U
E

=WTP- COST

WTP

COST

WTP

COST

WTP

COST

WTP

COST

Value depicts problem

WTP

Quality ,reliability
Availability, Variety
After sales service
Convenience

Expected / Target
service level

Cost
Suppliers IP
Manufacturing KH
Transport cost
Material Cost

Cost of meeting those

targets

 Service Concept
Organizing
Idea
Service
experience
Service outcome
Service
Operation

Service
Value

Prof. Rajeev Sharma, BIMTECH

Value has following characteristics

1. It is subjective experience around a context
2. It occurs when need are satisfied through provision of products, resources
or services against some form of payment.
3. Its an experience it flows from the person who is the recipient of
service or product.-it flows from customer