Value

Marketing Education, CSC Academy

ISB-SRITNE & CSC e-Governance Services
February 2019
Module Objectives
1. Understanding value as cornerstone of business

2. Internalizing the value process

3. Applying value process to own business

Understanding Value
• Why is a customer purchasing from you?
• Because the customer values the product or service you provide
• Value maybe from consumption (example – getting a phone recharge done to
call and talk to family) or from using for something else that customer wants to
achieve (example – applying for aadhar in order to use the same to avail
subsidized loan)
• Value is not what you provide (example –
features of a smartphone)
• It is what the customer derives from the
features (example – customer may not use
most features)
Value from Customer Perspective
• Value is customer defined
• It is not the technical and other features you provide in your product or service
• It depends on whether these features and services can be used or consumed by
the customer
• It also depends on what is the purpose for which the customer is considering
your offering

• Where does this value reside?

• In the customer’s mind
• She may not even be conscious of the value
Why Adopt Value Perspective
• What is the alternative perspective?
• Price based perspective – my product or service is cheaper than the
competitor(s)

• What does this lead to?

• Commoditization – everyone competes on price as no one is exploring how
they are able to differently adding value to customer

• What is the advantage of adopting value perspective?

• Clear differentiation
• Helping customer understand how and how much they benefit. Then asking
for a share of that benefit
• Ability to justify pricing or even price at a premium
Value Framework for
Entrepreneurs

Source: K. Bordeau
Copyright: Harvard Business Review
Value Creation
• Who are your customers?
• What are their characteristics and demographics?
• What problem are they facing?
• Understanding what issues they have. Some of the issues may not even be
clearly articulated. Need to talk to an understand the customer.
• What is your offering?
• How is your offering addressing the problem faced by customer?
• How much is your offering worth to the customer?
• Estimate rupee value of your offering, along with services you provide
Value Delivery
• How are you going to offer your solution?
• How is it different from and/ or superior to competitors?
• It is less about ‘how do I make money’ and more about ‘how do I solve the
customer’s problem’
• Bringing together products, services, partners and solutions to create value for
customer.
• Value capture (next slide) comes from first delivery value to customer
• Does your solution fit into the customer’s context?
• This includes access, mind-set, location, culture, etc.
Value Capture
• How is your business unique?
• What stops others from copying your business?
• Exclusivity, service, and solution are some of the moats
• How do you capture part of the value created?
• Showcase in Rupees terms how much value is created
• The price charged is a part of the value created
• How is this different from other pricing models?
• Delinked from cost, competitors pricing, margin expectation,
etc.
• Price is linked to how much value you are creating for customer
Value Elements
• Product
• Basic element(s). Includes product feature. (Example – sales of a solar lantern –
no recurring cost, no maintenance, no smoke or danger of fire are value
elements)
• Service
• Provided in addition to the product. (Example – Solar lantern demonstration to
understand use, lifetime warranty can be value elements)
• Partnerships
• Entered into for creating solutions for customer. Mix of product and service
from own end and product and / or services from other partners. (Example –
partnering with a mobile charger maker to incorporate phone charging from
solar lantern)
From Value Elements to Value Added
• Understanding the Customer Segment

• Different segments (or groups) of customers value different features

• Which value elements matter to which segments needs to be mapped

• Putting a Rupee value on each value element

• Understanding how the customer uses the value element. If it is used as input
to a product, then how much is the final product worth. If it is consumed, what
is the cost of the alternative.

• Adding the Rupee value of all value elements

Communicating Value
• Delivering Value

• The customer needs to understand the value being provided by the business.
 • This needs to be communicated in the form of a pitch, that identifies the
customer’s problem, and the solution being offered

• Capturing Value

• The communication ends with putting Rupee value to the value created and
asking for a small share of that in the form of a (premium) price
Applying to the CSC
• Who is your customer?
• Farmer, Student, Small businessman, others?
• What is their problem?
• Lack of information, lack of service, timely help, connecting with multiple
services or providers, others?
• What is your offering?
• Government services, other services through CSC, any other products, services
and partnerships that solve the customer’s problem?
• How do you capture value?
• Who is your competitor for each of your important offering?
• How are you adding value for these offerings?