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David Walters: Head of Department of Business, Macquarie University, Sydney, Australia
Geoff Lancaster: Chairman of Durham Associates Group Limited, Castle Eden, Co. Durham, UK and Lincoln School of Management and Macquarie University, Sydney, Australia
Introduction
This paper is a logical follow-on to the one that introduced the subject in terms of concepts and issues for management (Walters and Lancaster, 1999).
Davidow and Malone (1992) have commented on changes in the marketplace and the challenges facing corporate marketing whereby customers will need to be convinced about corporate and product credibility. This shift is what they suggest is a move towards value marketing; a process that begins by guaranteeing customer satisfaction, and by continuous monitoring, ensures value is delivered. They define value-based marketing as:"To exceed customer expectations one must not only design appealing and useful products ... and deliver them in a timely fashion, but maintain a more than satisfactory level of service for that product through its life cycle and that of its descendants."
This suggests long-term relationships, where customers are all-important and these include an exchange of confidential strategic plans and sometimes investment in customer companies. Value-based marketing concerns value delivery continuity and this, in turn, requires on-going monitoring of relevant target marketing, positioning and customer satisfaction delivery.
Value criteria and value drivers
A clarification is necessary between value criteria and value drivers.
Value criteria
During any purchase situation, certain aspects or attributes of a product or service will represent value to the purchaser. It is likely that a combination of attributes will represent value to the customer. A customer value criterion may be defined as:"An attribute (or characteristic) of a product or service considered by a purchaser to be a primary reason for selecting a specific product (or service) because it enhances the value of the purchaser's output (business to business customers) or improves their life style (consumer customers)."
Customer value criteria represent extensions of basic economic utility characteristics of form, ownership, time, space, convenience and information. Such characteristics may be expressed as generic customer value criteria:
- security;
- convenience;
- performance;
- economy;
- aesthetics; and
- reliability.
These may be expanded to identify specific value criteria that are important to specific individuals or customer groups. This is proposed in Figure 1...