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Customer Value Essay (Critical Writing)

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Updated: Apr 30th, 2019

Introduction

Major changes are necessary for Companies to remain competitive in the 21st century and beyond. It’s very imperative that these companies start making definitive changes by reorganizing management and marketing strategies. The change has to come from the leadership of businesses since the performance of the company is largely depended on the transformational leadership change whereby measurable benefits will be achieved.

The programs of change usually include definition of change vision, planning and strategizing, efficient communication to main stakeholders and developing the necessary skills and behaviour that will be aligned to change. Newer strategies will have to be developed to reduce the losses the company can suffer. This is what is known as strategic management and it’s not only a task but it’s a set of managerial tactics that are used for managing business’ functions.

Strategic Marketing

In strategic management, business managers analyse and collect crucial information from the businesses internal and external environments and use these factors to design strategies to drive business in the right direction. Managers then implement these strategies for better performance of the business so as to meet the expectations of the stakeholders (Anderson et al 4).

This paper identifies customer value as a major aspect of marketing in its statement of problem. Being able to determine what customer value and having the capacity to develop the means to meet these customers’ requirements is crucial in development of a viable marketing strategy (Woodruff 139).

Successful marketing strategy is inextricably connected to the advancement of processes for the creating, producing and distributing products that target at increasing the customer value.

Customers are the ones who bear the responsibility of making the decision to purchase and this decision is often based on the way they assess the value of the products they are buying in relation to the other available alternatives (Anderson et al 4). In order to attract these customers and retain them, the marketers need to develop strategic marketing that identifies their target customers and develops products to satisfy the customers’ needs.

In the United Arab Emirates, the organisational effectiveness is based on the ability of a company to establish a sustainable competitive strategy by aligning its resources to the business objectives. Many companies therefore expand by mergers and acquisitions or change of business strategy so as to create demand.

Critical to these changes is the idea of customer value as UAE business aim at bringing value to the customers by facilitation of the integration of business strategy with management skills (Anderson et al 5). Businesses strife to know their customers, why these customers are loyal, to discover the client’s needs, customer behaviour and how their clients communicate.

This way, businesses in UAE are able to design marketing strategies that keep them ahead of competition. With increasing information technology, advertisement seeks to increase the perceived customer value and therefore translate to customer satisfaction (Woodruff 139).

In the current economy, customers can access more information about competing products and they therefore have more capacity to articulate the value they expected for certain products. UAE has increased use of internet and therefore access to information has been improved. Customer value strategy of marketing is drawn from the ideology of strategic cost managing and quality assessment (Anderson et al 7).

Addressing the cost that a business incurs to create or develop a certain product and the value that customers attach to that product crucial as a marketing strategy. In marketing, the main idea is to address the specific activities that a company does to create that perceived customer value.

In UAE, once this is accomplished, the cost and actions can be classified as those adding customer value and those that don’t. The factors which do not add value can be eliminated when creating marketing strategy and manufacturing and adverting can be reorganised to maximize customer value with an aim of attaining a leading product innovation, client loyalty and efficient operation (Anderson et al 9).

Literature Review

Customer Value Concept

The word value in marketing is commonly used almost in every context. For instance, it’s commonly perceived that when businesses create and deliver superior customer value, then these businesses increase their worth. This is the perception of value from the perspective of the organisations while customer value is the perception of the clients and what they need or perceive to be getting from certain products (Woodruff 140).

The definition of customer value sometimes is vague though many experts define the terminology with inclusion of an actionable understanding of this idea. This paper has a number of definitions for value (Anderson et al 9). At its very basic meaning, value is the customers’ general analysis of product utility as determined by what benefit the customer draws.

In business, value is rated in terms of the monetary worth of a set of economic, technical and social benefits a client accepts to purchase at a certain price. Value can also be defined as the trade-off clients get by paying a certain amount of money for a particular product (Woodruff 142).

Different definitions of value have different implications and also share some similarities based on circumstances. For instance, The customer perception of value is different from the company’s perception of the same products. While the customers will be interested more in the functionality of the product on sale, the organisation manufacturing the product is interested in sales (Anderson et al 11).

Because the customer have the money to spend, the authority to make the decision to buy and the needs, marketing is now being centred on the customers perception of value (Woodruff 142). Accordingly, value in this context is defined as the benefits of a certain product at a price the clients is willing to pay and this is what company uses to meet the expectations of their customers.

Customer Value and Satisfaction

This paper demonstrates that there is a very strong association between customer value and the feeling of satisfaction and the two are description of customer judgment. Perceived Quality is a concept that is intimately linked to satisfaction and therefore likely to result into customer loyalty (Woodruff 143). The difference has not always been clear but the phrase is used occasionally indistinctly.

Satisfaction is derived from previous consumption experience and also relies on the price while quality can be perceived even when the product or service has not been used before by consumer and in most cases does not depend on the price (Anderson et al 12). However, in some few occasions where there is very little information about the product or when assessment of quality is very hard to attain, then the price of the product is used as an indicator of the quality.

In this sense, some scholars have concluded that constructs are very diverse and that they are affected by different determinants. Service quality as a factor that has been discovered to have the greatest impact on the level of satisfaction a client feels.

This has contributed to development if greater loyalty when defined as the product of comparison by the clients between the service given and the expectations (Anderson et al 12). The perceived value is based on the researched information and how customers think in regard to quality.

On the hierarchy of value, customers conceive that value of the products or services they want in a means-end manner. At the bottom of the hierarchy are the large group of goods with certain attributes and certain level of performance. When buying and using those products, clients develop a strong desire or liking of specific attributes according to the ability of the product to achieve a certain need that the client wanted or the feeling of possession value (Woodruff 144).

Accordingly when the customers discovers that the perceived quality is less than what was expected, then there is also very high probability that they will switch their supplier to the other competing business with hopes of getting better services (increasing perceived quality) and these contributes to the reduction of the loyalty (Woodruff 143).

Even with technology, human integration cannot be replaced, insurance firms need to involve their personnel who will make sure that job health descriptions are followed, there is adequate training, compensation processes are in place and customer based strategies are implemented, Client’s perception of the quality given influence satisfaction.

Customer Learning by Businesses

This is a very important trait and it has to be upheld in high regard especially when competition is very high like. Its plays a very important role when shaping customer loyalty. In business, clients would question themselves concerning the degree of satisfaction the product they buy offer and use the information for future purchases (Woodruff 146).

Paper has shown that the degree of satisfaction is considered high when a client spends less and gets maximum use and benefit (Anderson et al 15). Dissatisfaction however results when prices or the benefit from the product does not match the expected performance. Sometimes there is a very big difference between the customers consider as value and what managers think of value (Woodruff 143).

These differences cause mistakes in the organisation attempt to create value for their clients. The process of understanding customers should be established for every business so that these gaps are reduced. In market research therefore, the response of the clients plays a pivot duty at the overall score of the satisfaction scale of the providers (Woodruff 143).

Satisfied clients are unlikely to switch to other products because at least they are getting what they want. This means that they would stay with the same brand or product and make repurchase in future. This develops customer loyalty and therefore the business gains competitive advantage (Anderson et al 15).

There are two categories of learning or research that a business can engage in so as to be able to learn the needs of their customers or what customers regard as value. There is the informal learning which is a process of trial and error as the producer try to imagine, perceive or discern what their clients want. The business relies of previous decisions, feedback from retailers and their own observations of customer behaviour.

The second category is formal and it entails the systematic methods of research and data collection in marketing like surveys and experiments (Anderson et al 16). Client information is very critical in marketing and as the concepts of strategic management dictate, this information can be converted into competitive advantage. The company should have the ability to use the information and produce customised products that target the customer’s needs identified in the customer learning process.

The customer value concept is therefore crucial for marketing as a strategy of gaining competitive advantage. As the organisation implements the value concept, then the image that the customer recognises is that which fits their needs. A product that is designed for the customer’s desired value and this product should be the ideal brand equity strategy (Anderson et al 17).

Any company should consider the brand equity as the most valuable asset when it’s adding the value of the company, furthermore, brand equity is a factor that has shifted the attachment of price as the main consideration before making purchase and hence a competitive strategy since strong brand equity can make consumer overlook price (Woodruff 147).

As a merit, brand equity can enable a company to charge more on its brand as compared to similar products because consumers associated certain intrinsic benefit to it.

Strengths and Weaknesses of the Article

The author of the paper tried very hard to provide a quality paper by conforming to the required writing style, problems definition, analysis and originality.

The strengths of the paper include several elements that make the paper precise. Readability – the abstract and the paper’s introduction are well written and they are not filled with uncalled for jargon. The abstract directly begins to address the main theme of the paper which is to address customer value in trying to create competitive advantage for businesses (Anderson et al 19).

The introduction clearly states the problem and its significance of the research. The language used is simple and coherent making the reader to understand what the paper is going to address.

Abstract – the paper is self-contained and it summarizes the problem and the results of the question being addressed. As required, the abstract does not contain formulas, abbreviations and it’s not referenced. The abstract summarises the paper and it can be used for attain a brief of what the paper entails.

The body – the paper is correctly categorised into topics into headings and subheadings relevant to addressing the problem. Appropriate terminology and facts concerning the material have been presented logically and systematically.

For instance, customer value has been defined in depth, giving various perceptions ranging from the customer’s view to the organisation’s perceptions (Woodruff 140). The paper also explains how organisations can use the customers’ perception of value to offer them the products they need so as to attain competitive advantage.

The writing style is one of the strengths of this paper and the writer has used active, persuasive and succinct prose. It’s usually not easy to achieve such level of writing because writing a paper is as difficult as carrying out the research itself. Even thought there is usually the stage where editors correct the mistakes in paper, they usually do not accept wholesale revision. Conciseness and clarity is a very strong element in writing research papers.

There are several weaknesses in the article that must be addressed. Regarding methodology, the paper is clearly not a research paper and lacks evidence-based information in the methodology section. The paper’s information is subjective and the information cannot be recommended as absolute. The paper needs backup research to authenticate its data. Sometimes people would want to collect information from methodology selectively but that cannot be done for this paper.

The paper also lacks the result section because it did not have the methodology in the first place. The intention of the discussion is to interpret and explain the results so that this can be used to support the conclusions. When a research is found to be authentic, it means that the knowledge it would present will be accepted and if the significance is not clearly explained, the paper is invalid.

Strategic Marketing strategy

This paper contributes to the knowledge of understanding of the concept of strategic management. Perceived customer value is the merit that the goods or services have to the customer. This paper suggests that when the organisation learns about the customer view of value, then the organisation is in a better position to design products that have specifications needed by the customers (Woodruff 147). Customer value influences their attitude towards products and hence the decision to make the purchases.

The information from the paper support knowledge from other papers. For instance, Many managers have often approached the idea of customer loyalty from two different perspectives as implied by the analyses of this study.

First, they may consider customer loyalty as an attitude factors or secondly look at customer loyalty as a type of customer behaviour (Anderson et al 19). These two directions are all valid but they can have totally different impact on the company and result in different strategies of business.

From the attitude’ perspective, marketers have thought that customer loyalty is a state of mind. This means that customer would be loyal to a firm or a certain brand when they are after researching the product. They get information after being positively influenced or referred by others. The customers develop a liking from the company and its products and would prefer to buy from that company rather than seek another alternative (Woodruff 147).

This way, clients can be willing to pay premium prices for the products of that particular company over another cheaper brand even when the products could be virtually the same. The factor here is the willingness aspect rather than the action of buying. Most of the time this is closely linked to satisfaction and firms using this strategy tend to focus on improving the quality of the product and branding to beat competitors (Anderson et al 21).

Customer value determines satisfaction and therefore the decision making ability of the customers. This article also helps to explain the concept of loyalty as behaviour. When customers are satisfied they are likely to make purchases and re-purchase. A company can investigate what the customers are looking for and designing products to these demands (Woodruff 148).

Firms here focus on customer satisfaction and product quality because they know that the purchases are not as a result of actual loyalty but a behaviour that seem to be bring about some kind of loyalty. This approach is simple and practical as a company can use whatever resources and venture in any tactic that works for them rather than spend a lot of time trying to understand the perception of value by the clients.

Readability and Benefit to Scholars

The paper is generally written properly, it’s concise with clear purpose of study or purpose of the article presented. The information contained in the introduction and the abstract is accurate because previous students and articles present similar information.

The body is logically presented and it summarises also important aspects of the topic of discussion. The paper is well referenced and relevant and authentic articles are referred to. The information is hence credible and can be used for reference by managers and marketers. The writing style is succinct and it conforms to the requirements if the manuscript writing.

Conclusion

This paper has shown that the objective of learning customer value in strategic management was to enable the organisations to develop strategies that would produce greater customer value.

An effective marketing strategy needs to be largely focused on customer value viewpoints and the forces that drive customers to these perceptions. As part of the effort to create products for sale, it’s appropriate that they customer value are seen to be reflected in the organisations value creation proposition.

Works Cited

Anderson, James., Dipak, Jain and Pradeep, Chingunta. “Customer Value Assessment in Business Markets: A State-Of-Practice Study,” Journal Of Business To Business Marketing, 1993, 1, (1) p. 3-30

Woodruff, Robert. Customer Value: The Next Source for Competition Advantage, Academy Of Marketing Science, Journal, 1997, 25 (2) Pp. 139 – 151

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"Customer Value." IvyPanda, 30 Apr. 2019, ivypanda.com/essays/customer-value-critical-writing/.

1. IvyPanda. "Customer Value." April 30, 2019. https://ivypanda.com/essays/customer-value-critical-writing/.


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IvyPanda. "Customer Value." April 30, 2019. https://ivypanda.com/essays/customer-value-critical-writing/.

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IvyPanda. 2019. "Customer Value." April 30, 2019. https://ivypanda.com/essays/customer-value-critical-writing/.

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IvyPanda. (2019) 'Customer Value'. 30 April.

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