Creating value for customers involves understanding what benefits customers perceive from a purchase relative to the price. Customer value is maximized by choosing the right value proposition for different customer segments and effectively communicating, delivering, and maintaining the promised value over time through relationships and customized delivery systems. Key steps are to analyze customer value needs, develop products and services to provide that value, distribute and service customers, and communicate the value proposition.

1. Creating Value for Customers

2. Consumer Value Customer value is the relationship between the consumers perception of benefits they believe they will derive from a purchase compared to the price that will be paid The total benefit package include functional attributes of the product and related service attributes Therefore value can be defined as the ratio of perceived benefits to perceived sacrifice that is involved

3. Components of Customer Value Product Attributes Service Attributes Transaction Cost Life cycle cost Risk Product Attributes Product Attributes Expected Customer Value

4. Maximizing the lifetime value of the customers Value customer receive value proposition value assessment Value Organization receive Acquisition economics Retention economics Customer segment Lifetime value analysis

5. Key steps of the value delivery sequence Choose the Value (Customer value need, value positioning, provide the value (product development, service development, pricing, distributing and servicing Communicate the value (sales force message, sales promotion, advertising, PR)

6. How to implement a value proposition approach Analyze and segment the markets by the value customers desire vigorously assess the opportunities in each segment to deliver superior value choose the value proposition that promise these opportunities

7. Value creating relationships B2B relationships B2C relationships However before this market segmentation is essential to better manage relationships B2B – segmentation by value sought, industry type B2C – segmentation - Loyalty segmentation, occasion segmentation

8. Relationship Management Chain Define the value proposition understand the customer value chain where and how intended to create value competitive benchmarking 2 Identify appropriate customer value segmentation identify customer value preferences segment profitability analysis configure the value package

9. Designing value delivery systems Mass customization Value added partnerships Process reengineering Managing and maintaining delivered satisfaction service process monitoring customer satisfaction measurement employee satisfaction measurement