Understanding Customer Value: Key to Business Success

1 Business and Management Name Institution Course Professor Date

2 Customer Value Discussion Customer value is how much a product or service is worth to a customer. Business uses the customer value concept to measure costs and benefits linked with offered products or services. Therefore, in the world of business and marketing, customer value is a fundamental concept that represents the perception of what offered product or service is worth to purchasers in comparison to thinkable alternatives, as clarified in Gautam Mahajan's (2020) study. Gautam Mahajan's (2020) research on the meaning of customer value and how it can be created offers a clear and concise explanation ( Mahajan, 2020, p. 119). The article encompasses whether customers feel they have received paybacks and services that exceed what they paid for , including non-price factors such as time, effort, energy, inconvenience, customization, and responsiveness. Customer value, in essence, can be expressed as the equation CV = BC, where CV represents customer value, B stands for benefits, and C is the cost. I am interested in this topic because of its significance and contribution to the modern business landscape. For any business to succeed, it should understand and deliver customer value to impact customer loyalty, market share, profitability, and satisfaction directly. The concept of customer value as modern businesses adapt to changing market dynamics and consumer preferences remains in the decision-making processes core. Comparison Comparing my research with what I have studied during the module readings, the concept of customer value aligns with marketing and customer-centricity principles discussed in the article. The module readings emphasized the importance of understanding the needs and

3 preferences of customers, delivering value, and creating satisfying customer experiences. Nevertheless, customer value goes beyond basic customer needs to include brand image, customer experience, and value factors, which have not received as much attention in the module reading. In addition, while the module introduces fundamental concepts of marketing and customer-centric strategies, customer value dives deeper into the various elements that influence a customer's perception of value ( Mahajan, 2020, p. 120). The module readings also touched upon the idea that customer satisfaction is an outcome of providing value, which can lead to customer loyalty. This aligns with the notion that creating customer value increases loyalty, market share, and price, as highlighted in the concept of customer value. Article Summary In summary, Gautam Mahajan's article explores the concept of customer value, emphasizing how it can be created in the business environment. The article defines customer value as the perceived worth of a product or service to a customer compared to alternatives. Gautam Mahajan's (2020) research article highlights that customer value is not solely based on the price but encompasses the benefits and services received for the cost incurred ( Mahajan, 2020, p. 120). Gautam Mahajan explores various ways to create customer value, such as offering a price that makes the customer feel they are getting more than they pay for, providing extra services or attention, ensuring convenience, and building trust and brand image. Biblical Integration Customer value can be integrated with biblical principles, especially honesty, integrity, and trust. In a Christian context, creating customer value should be aligned with values such as honesty and integrity in business practices. Numerous teachings In the Bible emphasize the importance of treating others as we would like to be treated. For example, Matthew 7:12 "So

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4 whatever you wish that men would do to you, do so to them." Providing true value to customers, being transparent in pricing, and delivering on promises all harmoniously with biblical teachings. Trust, an essential component of customer value, is highly regarded in Christianity. Building trust with customers is not only good business practice but also reflective of the biblical principle of treating others as you would like to be treated. Application The concept of customer value has substantial implications in today's business world. The customer value concept directly influences the success and sustainability of businesses. Application of customer value concepts in the real world is essential for business success. Therefore, businesses that understand the needs of their customer b uild customer loyalty ( Mahajan, 2020, p. 121). Businesses delivering value can build a loyal customer base that returns for repeat purchases. Secondly, it can gain a competitive advantage. Notably, understanding customer preferences and delivering tailored value can set a business apart from its competitors. Notably, understanding the dynamics of customer value is a vital skill for anyone pursuing a career in business or seeking to make ethical business decisions. For example, companies like Apple, through product innovation, quality, and seamless customer experience, have successfully created customer value where its customers perceive the value of Apple products as worth the premium price. Annotated Bibliography Mahajan, G. (2020). What is customer value, and how can you create it? Journal of Creating Value, 6(1), 119-121. The article written by Gautam Mahajan in 2020 provides an in-depth discussion of the customer value concept, emphasizing its complex nature. The author highlights that customer

5 value encompasses price and benefits, introduces a clear equation for customer value (CV = Benefits - Cost), and emphasizes the importance of understanding customer perceptions. From the conducted research, the article underscores that value evolves throughout the customer journey, influencing customer satisfaction, loyalty, and overall business success. The article offers practical insights into creating real customer value by addressing price, convenience, service quality, and other factors. The author’s end goal in the research illustrate how a business can create or destroy customer value. Writing the objective and end goal makes the article a valuable resource for understanding customer value and its practical implications. Pandey, S., & Kumar, D. (2021). From a literature review to a conceptual framework for customer-to-customer value co-creation. Contemporary Management Research, 17(3), 189-221. The Journal Article written by Pandey and Kumar in 2021 examines an extensive literature review on customer-to-customer interactions researchers highlighting its impact on service encounters. Delving deeply into relatively underexplored customer-to-customer interactions and value co-creation areas, the authors examined the development of a conceptual framework. Discussing the development of a conceptual framework, the authors intended to understand the process of co-creating customer-to-customer value in the business environment. The literature review in the research highlights the importance of having connections in services marketing and its implications for value creation and customer engagement. This source fits effectively in the research about aspects of customer value as it reveals the contribution of customer-to-customer interactions in conceptual framework development.

6 Yen, C. H., Teng, H. Y., & Tzeng, J. C. (2020). Innovativeness and customer value co-creation behaviors: Mediating role of customer engagement. International Journal of Hospitality Management, 88, 102514. Written by Yen and his colleagues in 2020, this journal focuses on the role of innovativeness in customer value co-creation and the mediating effect of customer engagement. The authors intended to investigate how customer engagement mediates the relationship between innovativeness and customer value co-creation behaviors in the study. The authors explored the relationship between innovativeness, customer engagement, and customer value co-creation behaviors. Utilizing research methodology, the author uncovered insights for businesses in the hospitality industry, shedding light on the appropriate way of implementing innovative practices that enhance, subsequently, co-creation of value and customer engagement. In customer value discussion, this source is pertinent as it reveals innovativeness and customer engagement contribution in creating customer value. Sánchez-Gutiérrez, J., Cabanelas, P., Lampón, J. F., & González-Alvarado, T. E. (2019). The Impact on The Competitiveness of Customer Value Creation Through Relationship Capabilities and Marketing Innovation. Journal of Business & Industrial Marketing, 34(3), 618-627. This paper, written by Sánchez-Gutiérrez and his colleagues in 2019, focuses on the impact of customer value creation through relationship capabilities and marketing innovation on a firm's competitiveness. It delves into how building and nurturing customer relationships and implementing marketing innovations can contribute to creating value and enhancing a company's competitive advantage. Evaluation: This source is relevant to discussions on how relationship capabilities and marketing innovations can drive customer value creation and, in turn, impact a

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7 company's competitiveness. In customer values research, this source is relevant as it explores the relationship between customer value creation, marketing innovation, relationship aptitudes, and business competitiveness. Suarniki, N. N., & Lukiyanto, K. (2020). The role of satisfaction as moderation to the effect of relational marketing and customer value on customer loyalty. International Journal of Innovation, Creativity and Change, 13(4), 108-122. This Journal Article, written by Suarniki and Lukiyanto (2020), investigates customer satisfaction roles as a moderator in the relational marketing, customer value, and customer loyalty relationship. The authors discussed how customer satisfaction can influence the impact of relational marketing and customer value on building customer loyalty. The journal reveals how customer satisfaction can impact relational marketing and customer value on customer loyalty. In researching aspects of customer value, this source is pertinent to discussions because the shared interplay between customer satisfaction, relational marketing, customer value, and customer loyalty reflects aspects of products and services that customers value.

8 References Mahajan, G. (2020). What is Customer Value, and How Can You Create It? Journal Of Creating Value , 6 (1), 119-121. Retrieved from: https://journals.sagepub.com/doi/pdf/10.1177/2394964320903557 Pandey, S., & Kumar, D. (2021). From a literature review to a conceptual framework for customer-to-customer value co-creation. Contemporary Management Research , 17 (3), 189-221. Retriived deom file:///C:/Users/dell/Downloads/yjyang,+CMR_17-3-2+ %2320663.pdf Sánchez-Gutiérrez, J., Cabanelas, P., Lampón, J. F., & González-Alvarado, T. E. (2019). The Impact on the Competitiveness of Customer Value Creation Through Relationship Capabilities And Marketing Innovation. Journal of Business & Industrial Marketing, 34(3), 618-627. Retrieved from: https://www.researchgate.net/publication/328106564_The_impact_on_competitiveness_ of_customer_value_creation_through_relationship_capabilities_and_marketing_innovat ion Suarniki, N. N., & Lukiyanto, K. (2020). The Role of Satisfaction as Moderation To The Effect Of Relational Marketing and Customer Value on Customer Loyalty. International Journal of Innovation, Creativity and Change, 13(4), 108-122. Retrieved from: https://www.researchgate.net/publication/342914950_The_Role_of_Satisfaction_as_Mo deration_to_the_Effect_of_Relational_Marketing_and_Customer_Value_on_Customer_ Loyalty

9 Yen, C. H., Teng, H. Y., & Tzeng, J. C. (2020). Innovativeness and Customer Value Co-Creation Behaviors: Mediating Role of Customer Engagement. International Journal of Hospitality Management, 88, 102514. Retrieved from: https://www.researchgate.net/publication/340255541_Innovativeness_and_customer_va lue_co-creation_behaviors_Mediating_role_of_customer_engagement

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