Posted in Marketing and Strategy Terms, Total Reads: 4459
Definition: Customer Value
The term value signifies the benefits that a customer gets from a product. It is the difference between the benefits (sum of tangible and intangible benefits) and the cost. Value is dependent on the three factors – Quality, Service and Price. Hence, these three together form the ‘Customer Value Triad’. The value of a product increases with its quality and service, as the benefits increase. On the other hand, the value decreases with increase in price because of the increase in costs increase in this case.
The concept of value is vital for any marketer as any product or service can be sold only if the customer is getting some value out of it. Hence, marketing itself is defined as, the creation, communication and delivery of Value.
As shown in the picture a marketer needs to see if the product is delivering value to different target customers.