Customer Value Marketing Essay

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This report based on the study of Customer Value Marketing starts with introduction section. We have mentioned the contents of the study in objectives of the report section. The methodology section deals with the means of preparation of this report and the processes that we have followed. Then the report describes the theoretical aspects of the study in the literature review. This section mainly consists of brief description about different important topics about customer value marketing. Finally in the last section, the report is concluded with findings, bibliography and appendix over the topic. The appendix section contains some International Journals on Customer value marketing.


Todays marketing process is highly customer focused. It is all about creating customer value and building profitable customer relationship. Customers are at the center of marketing process. The main theme of marketing is to create customer value and to capture value from customers in return. The goal of every marketer is to create more value for customers. Customers usually face a broad array of products and services that might satisfy a given need. Among these products or services, customers have to choose the products that give them optimum value and satisfaction. That is why creating customer value is considered to be the most important task to be performed by marketing today.

The marketers do it through customer value delivery system, a system which is made up of the value chains of a company and its suppliers, distributors and ultimately its customers who work together to deliver value to customers. To deliver superior value to customers the marketers have to design a customer driven marketing strategy. The proper implementation of this strategy will give customers a perceived value, therefore, satisfaction. While buying a product or service, a customer is buying satisfaction. Highest value is derived when a customer is fully satisfied with his or her purchase. Today, value is considered to be an important constituent of relationship marketing and the ability of a company to provide superior value to its customers is regarded as one of the most successful competitive strategies for business. Hence, todays marketing needs to be based on the concept of customer value.


This report mainly discusses the following subjects:

¢Customer Value
¢Customer Value Strategy
¢Customer Value Positioning Model
¢The implementation of Customer Value Strategy
¢Hypothesis Regarding Customer value
¢Propositions on Customer Value
¢Methods of Customer Value Assessment
¢Customer Lifetime Value


The report in this study is basically a descriptive one. Here, both the primary and the secondary data are been used. The primary data has been collected from lectures given on this topic in the classroom. The secondary sources of data are our textbooks, various international journals & different websites.


Customer value strategy:

Customer value strategy is doing things differently from the competitors and transferring different values to the customers. There are six principles of strategic positioning. They are: ¢Strategy should have the right objectives.

¢The value of positioning should be distinguished from the competitors. ¢Strategic thinking should be reflected from the unique value chain. ¢In order to pursue the uniqueness in certain areas, we must give up some of the other characteristics of products, services or activities. ¢Strategy should enable the effective integration of various activities. ¢Strategy should have sustained direction.

Customer Value Positioning Model:

A Successful business is always based on its selection of the target customers for value positioning. Customers can be roughly divided into three types, but for different customers have different types of value positioning model: ¢Customers are interested in up-to-dated, modern product. Organizations which meet the needs of these customers can orient the value on product leadership. For example, Microsoft, Hp.

¢Customers prefer cost-effective products and services. They prefer convenient purchase and high quality service. The organizations which aim at this target group of customers orient the value on operational excellence. For example, Wal-Mart, Fed-Ex.

¢Customers want to get exactly what they need, even if they have to pay a higher cost or wait a little longer. Companies which serve these types of customers are committed to improving customer intimacy. For example, Honda, British Airways.

The implementation of Customer Value Strategy:

Once the customer value strategy is established, the company must ensure the implementation of the strategy by committing everyone in the workplace to its objectives and building support system for it. For this the business must ensure the followings:

1.Strengthening management for core competency:

The practice of a strong management system is a prerequisite for achieving customer value. A dynamic management system is needed so that the value strategy can be effectively implied.

2.Establishing culture of the company based on customer value: In order to achieve the strategic objectives of a company, it is necessary to develop a culture based on customer value so that the idea of customer value is deep in the heart of everyone in the workplace.

3.Establishing a highly integrated value system:
A highly integrated value system means companys self-reinforcing system of various activities.

4.Establishing an effective performance measuring system:

While implementing customer value strategy, companies continuously measure the performance with goal. Therefore, company should have an effective performance measuring system so that any deviation can be analyzed carefully.

5.Establishing the network marketing system:

With the help of network marketing system companies can understand customers needs in a better way and thus can strengthen the implementation of customer value strategy.


Rajagopal (2006) has established some hypothesis regarding customer value. They are as follows: ¢Higher perceived value acquired by the customer help consumers to determine their buying decision on the non-conventional products of unfamiliar brands in the market.

¢The brand value of the product is enhanced by developing the communication tools effectively by the firm which help augment the customer value by marginalizing the gap between consumer perception and product attributes.

¢The brand value, quality of the product, competitive advantage and price along with other relational variables determine the customer value.

¢The product attractiveness combined with the effective informational sharing and retailing services help augmenting by providing competitive advantage.

Here are some other hypothesis by Weinstein and Abratt (2009): ¢There is a significant correlation between service received from a professional service and customer retention. ¢There is a significant correlation between quality received and customer retention. ¢There is a significant correlation between the image of a professional service and customer retention. ¢There is a significant correlation between the prices charged and customer retention. ¢There is a significant correlation between overall value received from a professional service and customer retention.


Andreassen (1997) has made some propositions on customer value. They are: ¢Perceived quality is believed to have a positive impact on value ¢Perceived quality and value are believed to have a positive impact on customer satisfaction.

Methods of customer value assessment:

James, Dipak & Pradeep (1993), introduced some methods for assessing customer value. They are as follows:
¢Internal engineering assessment
¢Field value-in-use assessment
¢Indirect survey questions
¢Focus group value assessment.
¢Direct survey questions
¢Conjoint analysis
¢Compositional approach
¢Importance ratings

Customer Lifetime Value:

According to Phillip, Mark & Robert (2004), Customer Lifetime Value is the present value of the future cash flows attributed to customer relationship. Therefore, Customer Lifetime Value (CLV), also known as Lifetime Customer Value (LCV) or Lifetime Value (LTV) is the net present value of the cash flows recognized from the relationship with a customer. This is a parameter to determine exactly how much a customer is worth in monetary terms and therefore exactly how much a marketing department should be willing to spend to acquire each customer.

According to Jason, Ashutosh and Roberto (2010), CLV makes it possible to explicitly link long-term financial returns to marketing actions. They think that CLV has been gaining significance for two reasons: First, many traditional marketing metrics are not sufficient to evaluate return on marketing investments. Second, customers are not equally profitable. So, it is necessary to understand customer value at individual level which can be done with the help of CVL. CLV is typically used to calculate the cost of acquisition of a customer. For example, if a new customer costs 50000 TK to acquire and his or her lifetime value is 60000 TK, then the customer is considered to be profitable.


1.Customer value helps to develop & manage customer relationship 2.Customer expectation and customer satisfaction are closely related with customer value 3.There are some principles of strategic positioning which can be applied in doing things differently from the competitors and transferring different values to the customers 4.Success in business depends on selection of the target customers for value positioning. 5.The practice of a strong management system is needed for achieving customer value.

6.Developing a culture based on customer value is necessary to achieve the strategic objectives of a company. 7.A highly integrated value system & effective performance measuring system is important for the implementation of customer value strategy. 8.Network marketing system helps to understand customers needs in a better way 9.Some hypotheses established by various scholars are helpful for delivering superior customer value. 10. Important methods should be followed for assessing customer value 11.Customer Lifetime Value explicitly links long-term financial returns to marketing action. It also helps to understand customer value at individual level.

1.Komulainen Hanna; Mainela Tuija; Tahtinen Jaana; Ulkuniemi Pauliina (2004) Exploring Customer Perceived value in a Technology Intensive Service Innovation, volume 20, page 27. 2.Ravald Annika; Gronroos Christian, (1996),The Value Concept and Relationship Marketing, volume 30, page 12.
3.Lia Chia Chi;(2003) The role of Customer perceived value in Generating Customer Satisfaction: An E-business perspective volume 5, page 15. 4.Lam Shun Yin; Shankar Venkatesh; Erramilli and Murthy; Krishna Bvsan, (2004), Customer value, Satisfaction, Loyalty and Switching cost: An illustration from a Business to Business Service Context, volume 32, page 20. 5.Rajagopal, (2006), Brand value, Preferences and Customer value effect of Non-conventional utility products: An experimental analysis in Mexican market, page 23. Weinstein Art and Abratt Russel(2009) Marketing Intelligence & Planning Volume 27 No. 5 page 19, 2009 6.

7. Andreassen Tor Wallin (1997) The International Journal of Service Industry Management, volume. 8, No 4, Page 33

Anderson James C. Jain Dipak C. & Chintagunta Pradeep K.(1993), Journal of Business to Business MarketingVolume 1(1) , Page 29

Pfeifer Phillip E., Haskins Mark E. & Conroy Robert M. Journal of Managerial Issues (2004) page 25

Zhang Jason Q. , Dixit Ashutosh and Friedmann Roberto (2010), Journal of Marketing Theory and Practice Volume 18 no. 2, Page 13 7.

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