Marketing Reading

Sunil  Gupta

Other Teaching and Training Material | 2014

Marketing Reading: Creating Customer Value

Abstract

This Reading explores how firms can create value for their customers. The goal of any business is to delight customers by understanding its customers' needs and to provide products and services to meet those needs. As a result, it is critical to understand what customers value and how firms can offer products and services by creating different types of value for their customers. The purpose of this Reading is to help students understand customers' perspectives on what they value and why. The Reading describes four types of customer value—economic, functional, experiential/psychological, and social. A supplemental Reading looks at how to manage customer expectations.

Keywords: consumer behavior; Consumer marketing; customer experience; Network Effects; service profit chain; total customer value;

Language: English

Format: Print

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Citation:

Gupta, Sunil. "Marketing Reading: Creating Customer Value." Core Curriculum Readings Series. Boston: Harvard Business Publishing 8176, 2014.

Disruption and transformation get a lot of hype and for good reason. Digital technologies have disrupted entire industries and incumbents have often struggled in this new world. Typical approaches used by legacy players such as using technology to improve efficiency, encouraging business units to do digital experiments, or launching independent units to spur innovation have met with limited success. These players have to strengthen their core and build for the future at the same time. It is like changing the engine of a plane while it is flying. Based on almost ten years of research, this book provides a framework for companies to reimagine their business. Using rich case studies and rigorous research, it shows how the rules of business have changed and why it is no longer enough for firms to be better or cheaper to gain competitive advantage. These new rules make it essential for companies to reexamine four fundamental aspects of their business to thrive in the digital era—their strategy, value chain, customer engagement, and organization structure. Done right, digital technology can be a tremendous opportunity for established players as demonstrated by Best Buy, New York Times, Weather Company, and others.

Sachin Bansal and Binny Bansal, co-founders of India's largest e-commerce company, Flipkart, were reviewing the foregoing Facebook post, which had gone viral and received more than 20,000 likes. A third-party seller listed a pair of women's sandals on Flipkart's website at 799 Indian rupees (₹) and offered it on promotion at ₹399. However, upon close examination of the product's display photo, consumers noticed a ₹399 price tag printed on the strap. Consistent with stated goals of transparency and building trusted relationships with customers, the Bansals immediately drafted an apology and terminated the seller's agreement with Flipkart.

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Marketing Reading: Creating Customer Value

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