MCS 371

CONSUMER BEHAVIOUR

Bylon Abeeku Bamfo

babamfo@hotmail.com// 020 8522556
Jan 2014
 CHAPTER FOUR

CREATING MARKET VALUES

FOR CUSTOMERS
INTRODUCTION
• Companies must gain customer trust and
confidence
• They need to demonstrate the essence of
marketing
• The essence of marketing is to create value
for customers
• This chapters discusses how marketers can
create superior value for customers.
LEARNING OBJECTIVES
• To understand value delivery
• To discuss creating market values for users
• To understand how marketers create values
for payers
• To identify how marketers create values for
buyers
• To understand how marketers measure value
delivery
• To discuss fulfilling the business purpose by
delivering customer values
VALUE DELIVERY

• Value is what customers seek in products

• It is the potential of a product to satisfy customers’ needs
• The fulfillment of customers’ needs and wants is called
value delivery.
Dimensions of Value Delivery
• Value has two dimensions of effectiveness
and efficiency.
• Effectiveness is the ability of the product to
meet customer needs and wants
• Efficiency is minimizing cost to the customers
(money, time, physical effort)
• Both efficiency and effectiveness must be
harnessed concurrently.
Dimensions of Value Delivery
EFFICIENCY (Resource conservation)

Poor Good

Effectiveness Best value

Good
value
EFFECTIVENESS
(Need/want
fulfillment)
Poor value Efficiency value
Poor
Tools for Creating Customer Value
USER VALUES PERFORMANCE SOCIAL EMOTIONAL

Quality Price exclusivity Emotional

Improvement communication

Innovations Limited availability

Mass Social image ads

customization

Warranties and Exclusive offerings

guarantees
PAYER VALUES PRICE CREDIT FINANCING

Low price form Acceptance of Leasing

lower margins credit cards

Low price from Offering own Customized

increased credit cards financing
productivity

Deferred payment
BUYER VALUES SERVICE CONVENIENCE PERSONALIZATION

Product display and Convenient point- Personal attention

demonstration of- access and courtesy

Knowledgeable Automated
salespeople transaction
recording

Responsiveness

User support and

maintenance
service
CREATING MARKET VALUES FOR USERS

• Users are the ultimate consumers of the product

• They are concerned about the product’s performance as
expected
• They are also concerned about social and emotional
benefits
Performance Value

• Firms adopt four main tools in offering superior

performance value:
• Quality improvement
• Product innovation
• Mass customization
• Warranties and guarantees
Social and Emotional Value
• This value is offered through:
• Prestige pricing
• Limited availability
• Social-image-based marketing communications
• New Exclusive offerings
• Emotional communications
CREATING MARKET VALUES FOR PAYERS
• Values most important to payers involve low-cost and
ease of making payment
• Marketers’ tools used to create value for payers include:
• Keeping the cost of purchasing and using the products
low (price value) and
• Offering services that are useful for payers (credit and
financing values).
Price Value
• Low price from lower margins
• Low price from increased productivity which include
Economies of scale
Modernized plant
 Automation
Business process re-engineering
Credit and Financing

• Accepting credit cards issued by third parties or banks

• Issuing own credit cards or giving credit by other
instrument
• Allowing delayed or deferred payment
CREATING MARKET VALUES FOR BUYERS

• Buyers look for good service before, during and after they
make their selection
• They want their purchase not to be too time consuming
and in a time and place that fits their schedule-
convenience
Service Value
• Pre-purchase service which include:
Product on display or demonstration
Knowledgeable salespersons
• Post purchase service which comprises:
Product-use advice and support
Product maintenance
Convenience Value and Personalization

• Convenient point-of-access
• Automated transaction recording
• Courtesy
MEASURING VALUE DELIVERY
• Marketer must deliver value effectively and
demonstrate this to customers
• This is done by:
Finding out what customers want
Organizing to deliver those values
From the perspective of the customer,
measuring how well value is being delivered
• Thus the marketer must conduct customer
research as shown in the next slide.
 What do target customers values?

Which values are most important to target

customers?

How well is the organization delivering the What are target

values desired by target customers? customers likely to
values in future?

Why is the organization doing well (poorly) on

important value dimension?
FULFILLING THE BUSINESS PURPOSE BY DELIVERING
CUSTOMER VALUE

• The fundamental business purpose is to make

the customer happy
• Thus the ultimate goal of implementing the
value delivery tools is to make the customer
happy.
• Happy customers are eager to support
organization.
• This is the ultimate goal of customer
orientation.
THE END