Customer Perceived Value

Role of Customer Perceived Value in generating a business towards success



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Role of Customer Perceived Value in generating a business towards success

Introduction

In this study it has been discussed about the concept of customer perceived value. Customer's loyalty provides an organization a consistency in terms of revenue. This study evaluates the role of a consumer's perceived value in building customer's loyalty and by that making a business successful. If a customer does not perceive superior value it means he is not satisfied with the product and service offered by the company. And therefore he will switch to other company offering the same product to satisfy his needs. Depending on the industry, a successful strategy to build customer's brand loyalty leads to customer retention which leads to increase firm's profitability. Two main factors which a firm needs to keep in their mind to increase their sales and gain competitive advantage are Price and Quality.

Companies take significant amount of time to research the market to understand the needs and demands of customer. The main objective of a firm is to create a balance proposition among products attributes to its price. Perceived value comes from intersection of what your customer wants from you and what they actually get from you versus what your competitor is offering. For every mistake even if it's a minor one, the value defined by your customers will decrease. Because the value that you provide to your customer is always compared by your customers. Hence, the firms will slowly starts to lose their ability to maintain customer's loyalty.

Discussion

It is the believe of every organization that perceived value is the major factor in building customer loyalty and long term management processes (Spiteri & Dion, 2004, pp. 675-87). According to (Wang et al., 2004, pp.169-82) Creating customer value is now essential in building competitive advantage and it is one of the reasons for the organization's success. It means that value creation develops the sense of association in the minds on customers that they are getting quality products which is fulfilling all their needs and demands and thus providing them value. It is also observed that profitability of an organization and loyalty of customers are interlinked with the value which 1is created for the customers (Khalifa, 2004, pp. 645-66). In a market that is consumer oriented, building customer loyalty and making a customer committed to your products regarded as one of the most important goal (Reichheld & Schefter, 2000, pp. 675-87).

It has been proved by many researchers that customers become loyal if they are delighted from the value and quality of your products. Some scholars have also argued on the fact that there are other variables such as switching cost which can influence significantly and can create customer satisfaction and perceived value (Eggert & Ulaga, 2002, pp.107 - 118). Marketing exists because there are unfulfilled needs and desires of customers (Kotler, 2005). Therefore, the main objective of marketing is to provide value to the customers in ...