Delivering Customer Value

Introduction

Each business organization operates in its unique environment. In today's competitive business environment each company has its own distinct pricing strategy which makes them different from the other companies. Companies should focus on raising the level of consumer interests and to meet their needs. Some consumers may choose lower priced products even if they are not of any need to them. But for most consumers price is not the only factor they consider while making a purchase. They compare the entire <a class="inlineAdmedialink" href="#">marketing</a> offering of the product and does not make the purchase decision based on the product's price. Product value refers to the perception of benefits received for what someone most give up. In better words, a customer's perceived value of a product will be affected by a marketer's pricing decision. It can be better illustrated using a formula

Value = perceived benefits received

perceived price paid

For the buyer value of a product will change as perceived price paid and/or perceived benefits received change. But the price paid in a transaction is not only financial it can also involve also time or convenience costs. Value can also be created by lowering these costs.

Steve Chandler in his book "9 lies that are holding your business back", says that the business people who strongly believe that the low price can boost their business or probably help them remain in it, are feeling "the biggest fear" which is actually fear of failure. Unfortunately, business people think that their most important aim is to provide what customers can afford, but not what customers want.( (Steve Chandler, 2008)

Strategic focus of selling at a low price has many disadvantages as follows –

It may mislead costumers to have a negative impression, as they may have a feeling that the products/services are of inferior quality.

Nowadays customers are educated and know that price is not what matters and what matters is the quality. They need better value for their money.

It cut shorts the profit margin of the company. If a company goes on reducing the price they will ultimately end up in loss.

Let us take the example of a leading <a class="inlineAdmedialink" href="#">computer</a> manufacturing company, DELL.

Dell advertisements have appeared in several types of media including television, the Internet, magazines, catalogs and newspapers. Some of Dell's marketing strategies

include lowering