value merchants ch2 points of discussion

praesentatio Andreas Brinck

Value merchantsChapter 2 - points of discussionInspired by Value Merchants byJ. C. Anderson, N. Kumar, J. A. Narus


What is value in business markets?

Adjusted mkt.perceived

quality


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.”


It follows:

Benefits and price share an absolute relationship.








Valuef – Pricef (duh!)


But, there is always an alternative…

We get:

(Valuef – Pricef) > (Valuea – Pricea)

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).

The Fundamental Value Equation


Something about value

• Value variesTAKE 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 productTAKE AWAY: Take the customer’s perspective

• Value can change over timeTAKE AWAY: Be aware of these hidden strength/weaknesses of your product


The story about the elements

Every offer in the market can be seen as a grouping of value elements:

Py Di Cn1

Points of parity Points of contentionPoints of difference

32Our elements perform just like the next-best alternative’s elements

Elements whose value is seen differently by customer and supplier

Our elements are superior to the next-best alternatives or vice-versa


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


THANK YOU!

Questions? Answers? Suggestions? [email protected]

value merchants ch2 points of discussion

Business