A Model Of Customer Value For Consumer Market Marketing Essay

A Model Of Customer Value For Consumer Market Marketing Essay Satisfying customers wishes is a challenge for many companies in the todays rapidly changing and keenly competitive environment. A thorough knowledge of customer needs is even considered to be the foundation on which a company is built. (Mohr-Jackson, 1996) Hence, the researcher in this research has decided to focus the research on customer values. 2.0 Definition of Customer Values Walters (2002) explains that â€Å"value is an interesting concept. The underlying motivation for changes in customer expectations is a shift in the consumer perspective of value which has moved away from a combination of benefits dominated by price towards a range of benefits in which price, for some customer segments, has very little impact. Value is assumed to be the benefits received from a product choice less their costs of acquisition†. The benefits can be measured in price, quality, convenience, flexibility, response time, dependability of delivery, style and fashion, ethical issues, technol ogy and personalization. All these values are very important especially for the first time customers as in this high competitive business environment, customers will compare the value of product or service the competitor is offerings. The more values a company willing to provide, the more likely the customers are willing pay for the product or service. 3.0 Customer Value Models According to Fuller (1993), identify customer’s characteristic and develop customer value model are a very important part in satisfying the customer needs. The product and service characteristic must be produced and delivered and these tasks raise questions concerning the capabilities and capacities. Diagram 1: A Model of Customer Value for Consumer Market According to Day (1990), the original idea of â€Å"value equation† and emphasizing customers’ perception. This model (Diagram 1) integrates descriptive and normative points of view about consumer behaviour, including the consumer value s expectation before purchase, customer value evaluation at the time of buying, and value actualization in consumption or possession. According to social psychologists, people’s perception of objects and events is influenced by their cognitive traits such as personality and attitude, personal values, and consumption schemata. Besides that, it can also be influenced by the demographics such as age, education, income, wealth, and time resources. As indicated in Diagram 1, these factors of â€Å"Customer Characteristics† are the background of the customers’ perception. The buyers’ evaluation of a product purchase begins from their perceived product benefits. The earlier discussions of consumers’ product valuation have proposed a framework about how the customers perceive product benefits based on their terminal personal values and instrumental consumption values. In addition, the discussion has suggested and illustrated a typology of generic product b enefits with eight categories. As indicated in Diagram 1, the model suggests that â€Å"Perceived Product Benefits† could be a single type or a combination of the eight categories of product benefits. The model suggests that customer value is a consequence of subjective evaluation which in turn results from the summing up of the various perceived benefits and perceived costs, taking into account the differently weighted factors. In other words, the â€Å"perceived customer value† in the model is defined as the surplus or the difference between perceived benefits and perceived costs (Day 1990).