Marketing Online

The marketing job is to create, deliver, and capture customer value.
What is value? Value primarily is the putting together of
the right combination of quality, service, and price (QSP) for
the target market. Louis J. De Rose, head of De Rose and Associates,
Inc., says: “Value is the satisfaction of customer requirements
at the lowest possible cost of acquisition, ownership,
and use.” Michael Lanning holds that winning companies are those that
develop a competitively superior value proposition and a superior
value-delivery system. A value proposition goes beyond the company’s
positioning on a single attribute. It is the sum total of the experience
that the product promises to deliver backed up by the faithful delivery
of this experience.
Jack Welch put this challenge to GE: “The value decade is
upon us. If you can’t sell a top quality product at the world’s
lowest price, you’re going to be out of the game.”
McDonald’s used to say that it is in the fast food business. Later
it said that it is in the quick service business. Today it says that it is in
the value business.
A company’s ability to deliver value to its customers is closely tied with its ability to create satisfaction for its employees and other
stakeholders.
Value ultimately depends on the perceiver. A child came upon
three masons and asked, “What are you doing?” “I’m mixing mortar,”
said the first. “I’m helping fix this wall,” said the second. The
third one smiled: “We’re building a cathedral.”
Smart companies not only offer purchase value but also offer use
value as well. You invest $30,000 in an automobile and you expect
the dealer to help with respect to maintenance, repair, and answering
a host of questions. Ryder, the truck leasing company, not only rents
a truck but provides a free book on how to pack and move. Nestlé
not only sells baby food but has a 7/24 service to answer parents’
questions about baby food.
Companies worry about spending more money to satisfy their
customers. They need to distinguish between value-adding costs and
non-value-adding costs. A hotel may consider adding afternoon bedturning
service that would raise the cost per room by $2. Before doing
this, it should survey whether its customers would be willing to
pay $2 for this service. If the answer is no, then bed-turning service is
a non-value-adding cost. But if the hotel puts an ironing board and
iron in each room at a cost of $2 and guests think it is worth $3, then
this would be a value-adding cost.