TAILIEUCHUNG - Business Marketing: Understand What Customers Value

HOW DO YOU DEFINE VALUE? CAN YOU MEASURE IT? What are your products and services actually worth to customers? Remarkably few suppliers in business markets are able to answer those questions. And yet the abihty to pinpoint the value of a product or service for one's customer has never been more important. | IDEAS AT WORK Gauging-and communicating -what your products and services are worth to customers has never been more important. Everything is worth what its purchaser will pay for it. Publilius Syrus first century . Business Marketing Understand What Customers Value by Janies C. Anderson and Janies A. Narus HOW DO YOU DEFINE VALUE CAN YOU MEASURE IT What are your products and services actually worth to customers Remarkably few suppliers in business markets are able to answer those questions. And yet the ability to pinpoint the value of a product or service for one s customer has never been more important. Customers-especially those whose costs are driven by what they purchase-increasingly look to purchasing as a way to increase profits and therefore pressure suppliers to reduce prices. To persuade customers to focus on total costs rather than simply on acquisition price a supplier must have an accurate understanding of what its customers value and would value. Put yourself for a moment in the role of a commercial grower. Two suppliers are trying to sell you mulch film thin plastic sheets that are placed on the ground to hold in moisture prevent weed growth and allow melons and vegetables to be planted closer together. The first supplier comes to you with this proposition Trust us-our mulch film will lower your costs. We ll provide superior value for your money. The second supplier says We can lower the cost of your mulch film by per acre and offers to show you exactly how. Which proposition would you find more convincing James C. Anderson is the William L. Ford Distinguished Professor of Marketing and Wholesale Distribution and a professor of behavioral science in management at Northwestern University s . Kellogg Graduate School of Management in Evanston Illinois. He is also the AT T ISBM Research Fellow at the Institute for the Study of Business Markets located at Pennsylvania State University. James A. Narus is an associate professor of management at .

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