Create Value for Customers

Abstract:  Determining the marketing strategy is crucial in the process of running a company. The concept of customer value has become increasingly used in marketing strategy and literature in recent years. Understanding customer needs and wants is very important in designing an effective market strategy. Strategists must consider the complexity of factors when evaluating and selecting marketing strategies. The result of this article is that one of the indicators of customer profitability is customer lifetime value (CLV), which is a discount on net income that is obtained as long as consumers subscribe. The more loyal the customer, the longer the subscription period (customer lifetime), the more likely they are to upgrade buying and cross-buying, and the more they accept price increases so as to provide greater profits for the company. Consumer equity (customer equity) total CLV of all customers owned by the company.

Keywords: Marketing, Marketing Channels, Customer Value

INTRODUCTION

Value is a very popular concept in various fields of science. In the field of economics, value is known as utility.

namely the use of the product for consumers. In marketing the concept of value is also used and even considered as the reason consumers buy products (reasons to buy).

Attention to value has recently increased in marketing. Value is considered to be the main source of competitive advantage today, even being the key to a company's success in surviving in the long term (Khalifa, 2004; Kotler and Keller, 2012). Today's global companies, which are tens to hundreds of years old, such as Nestle, Unilever, Coca Cola, Toyota and others, can become big and survive for such a long time, is because they provide value to their customers. Conversely, brands that previously triumphed and then disappeared from circulation, it is certain that these brands do not provide the right value. Or, even if it provides value, but that value is less than the value provided by competitors.

Companies that are not based on marketing are increasingly realizing that the key to their success is providing value for customers. For example, the reason Microsoft (a software manufacturing company) makes for buying its product is customer value (Figure 1.1).

The market is not a vacuum. Apart from our company, value is also provided by other companies (Seggie, Cagusvil and Phelan, 2007). Often the competition between companies is very high, as described in hypercompetition (D'Aveni, 1997).

Basically competition is a race for consumer choice. because consumer choice is based on value (Kotler and Keller, 2012), competition can also be interpreted as a race to provide value. Therefore, value is the key to successful marketing and strategic marketing must be based on value.

 

DEFINITION OF CUSTOMER VALUE