Value Merchants Ch2 Points Of Discussion

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Information about Value Merchants Ch2 Points Of Discussion

Published on March 25, 2009

Author: andreasbrinck


Value merchants Chapter 2 - points of discussion Inspired by Value Merchants by J. C. Anderson, N. Kumar, J. A. Narus praesentatio Andreas Brinck

What is value in business markets? Adjusted Total Satisfaction mkt.perceived savings of received customer quality None Benefits of the Maximum relative to price price above? praesentatio Andreas Brinck

The common denominator? “Value in business markets is the worth in monetary terms of the technical, economic, service, and social benefits a customer firm receives in exchange for the price it pays for a market offering.” praesentatio Andreas Brinck

It follows: Benefits and price share an absolute relationship. Benefits and price share an absolute relationship. Benefits and price share an absolute relationship. Benefits and price share an absolute relationship. Benefits and price share an absolute relationship. Benefits and price share an absolute relationship. Benefits and price share an absolute relationship. Benefits and price share an absolute relationship. Valuef – Pricef (duh!) praesentatio Andreas Brinck

But, there is always an alternative… We get: (Valuef – Pricef) > (Valuea – Pricea) The Fundamental Value Equation TAKE AWAY: Customer value is a comparative concept. It compares our offer with what the customer considers the next-best choice to our product. Therefore, this concept is loaded with variation (unless we communicate otherwise). praesentatio Andreas Brinck

Something about value • Value varies TAKE AWAY: Do not strive to calculate value to the 10th decimal place. • It’s an individual point of view among customers TAKE AWAY: Know your customers and educate them to form a common understanding • Customer vs. supplier assessment of product TAKE AWAY: Take the customer’s perspective • Value can change over time TAKE AWAY: Be aware of these hidden strength/weaknesses of your product praesentatio Andreas Brinck

The story about the elements Every offer in the market can be seen as a grouping of value elements: Points of parity Points of difference Points of contention Py Di Cn 1 2 3 Our elements perform just like the Our elements are superior to the Elements whose value is seen next-best alternative’s elements next-best alternatives or vice-versa differently by customer and supplier praesentatio Andreas Brinck

TAKE AWAY: • To categorize elements, a detailed understanding of the customers’ perception of value is required • The most effective proposal is the focused one (two decisive elements of difference • Contain point of parity • If necessary cede to a competitor’s value element that customers value the least praesentatio Andreas Brinck

Questions? Answers? Suggestions? THANK YOU! praesentatio Andreas Brinck

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