CONCEPTUAL FRAMEWORK
VALUE-ADDED.
It has been previously distinguished between goods and services, but at the end, every product has both tangible and intangible elements, with a set of added services built around the initial and core product needed by the customer. It can be analyzed through a molecular model (Shostack). For IKEA’s case, see chart 1.
Value-added services are to be studied as the services analysed in this paper are an add-in to the product marketing of the company; for this purpose, some articles and academic papers were chosen. For example, “A Value-Added mind-set can revamp your bottom line”. The article goes around the idea that firms must pull themselves from a state of comfort, competing on the basis of price and delivery, by differentiating
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These factors enhance the experience and perceptions of the product received by the customer, and, thereby, improve market performance of the aforementioned company in the market.
Last paper, “Marketplaces: a new e-business model. The case of the construction industry”, is more focused on online businesses as the services adding the value to firm’s original activity. From the results obtained in the study it is concluded that perceived quality is the main factor for achieving user’s loyalty in this channel of purchase, while of great importance are similarly to improve the corporate image of the online marketplace and the users perception of it providing them with additional value.
Customer loyalty is crucial to the long term survival of a business, particularly in the context of electronic commerce where it becomes essential from the point of view both economic and
Customer loyalty comes from the personal relationship that is developed between the customer and the business. One method used to understand the customer relationship is called customer relationship intensity and Life-cycle segmentation (UOP, 2007). This process includes classifying all the customer relationships into one of five groups.
1. Customer Perceived Value (CPV) is essentially a consumer's evaluation of total benefits less total costs of a product or service compared against a perceived alternative (Kotler & Keller, 2012). There are a few ways for a company to take to improve CPV on a specific product. First, it may focus on expanding total customer's benefit by improving its product’s image. It may also invest into functional characteristics of the product as well as provide a better and more personalized service. Second, a firm may choose to reduce the time, energy and psychological costs bared by the consumer. Arguably one of the best received approaches would be a monetary costs' reduction technique (lower prices).
IKEA is more than a furniture store they are a company driven by values (IKEA, 2014). The company seeks to make their consumers lives easier by providing them with modern, innovative, inexpensive products which they use to tackle daily home activities. IKEA Group has 298 stores in 26 different countries (IKEA, 2014). The company’s vision is “to create a better everyday life for the many people” (IKEA, 2014, para 1). Using innovative techniques for creating, producing, and marketing their products IKEA can provide consumers with durable products for reason...
“Service concept plays a key role in service design and development. It defines the how and what of service design and it helps mediate between customer needs and the organisation’s strategic intent.” (Goldstein, 2002) Hesket (1986) defines the service concept as the way the “organization’s would like to have its services perceived by its customers, employees, shareholders and lenders”. This means how the organisation wants itself and the goods and services that it sells to be seen by the people involved in the organisation.
A business uses its strengths to take advantage of the opportunities that arise. IKEA believes that environmentally focused business conduct will result in good returns even in a price sensitive market. Business potential for IKEA in providing solutions that enable customers to live a more sustainable life at home. IKEA also is developing effective solutions for customers in order to support them recycling or reusing the product. Some of the opportunities that IKEA takes advantage of through its sustainability agenda are growing demand for greener products, growing demand for low priced products which is trends in the future that financial climate may result in customers trading down from more expensive stores and the last one is demand for reduced water usage and lower carbon footprints.
In this case, IKEA was transformed from a small mail order company to a popular international furniture retailer. As the business achievements of IKEA have been increasing and well-developed, it adopted a particular strategy, which is “To offer a wide range of well designed, functional home furnishing products at cheap price”. For reaching the strategic requirement, IKEA improved its competitive capability and enhanced resources such as w...
Also the objection to meet high customer service has depleted a company’s capability to separate itself from its competitors. These factors help find new and different ways in creating a competitive advantage for a company.
Among every product selling in the market, products are divided into three levels. From the first level to the third level, they are “core customer value”, “actual product” and “augmented product”.
In this essay we will discuss the statement: “In a prosperous society, value is predominantly of an intangible nature”. Value is “the sum of the tangible and intangible benefits and costs to customers” (Kotler & Keller, 2012). The question is however if the tangible or intangible benefits and costs are influencing the value of a product the most. This essay will evince that value is mainly of tangible nature.
He listed these five factors as follows: “(1) informing, (2) influencing, (3) reminding and increasing salience, (4) adding value, and (5) assisting other company efforts.” (p.246). To clarify that, the first most important aspect is informing people, which means company needs to enhance the awareness of the consumer about their products by mentioning its advantages and features. Advertising also affects the products in two ways. Firstly, by basic demand, which builds consumer desires for old products of the company and secondly, refers to a new brand of the company.
Lovelock, C.H. Patterson, P.G. Wirtz, J. (2011). Developing service products: core and supplementary service elements. In: Burgess, P. Stanley, J Services Marketing. 5th ed. Frenches Forrest NSW: Pearson Education. 97 - 126. (Lovelock, Patterson, Wirtz. 2011)
Value is used in a central thought in economic theory (Haksever et al., 2004). The key for the value is an ‘exchange’ between two units such as “benefits and sacrifices” (Möller, 2006), “consumer surplus," value for money or optimize used value, but minimize exchange value (sacrifices in terms of price) (Bowman & Ambrosini, 2010). Normann & Ramirez (1993) use the terms co-produce to define the participation of customers in value co-creation that realized value is not created at supplier level, but between customer interactions. Several authors describe value in terms monetary business value whereas others include non-monetary benefits such as market competitiveness, competencies, and social rewards (Walter, Ritter, & Gemünden, 2001) or could be the combination of both business value. Haksever et al. (2004) describe tangible or intangible value may derive from business activities, policies, and regular action of the firm as the power of the product, service, or activity to fulfill a requirement or deliver a profit to a person or legal entity. Those values may positively influence the “quality of life, knowledge, prestige, safety, physical and financial security, as well as providing nutrition, shelter, transportation, income, etc.” (Haksever et al., 2004, pg. 292). These values are meant for stakeholders of the firms such as its customers, suppliers, owners and other firm’s alliances (Bowman & Ambrosini, 2010). Therefore, the role of firm and customers are different, it is a sequence of activities performed by the firm (Vargo et al., 2008).
...bination of product and service is active for a company’s success, because it effects how a customer sees the product. Operations managers must for that reason direct consideration to both the product and the services that go with the product. In the manufacture of tangible goods, such as cars, cleanser, or alcoholic drink, customer contact is limited to the retail end, after actual manufacturing has been completed. In the project planning and regulator of the associated manufacturing process, the first choice of consumers are important, but the customer’s actual attendance is not. The main difference between service and manufacturing systems is that services are intangible productions that are consumed in the process of their production. The knowledge and process for supplying the service can differ considerably from one industry in the service sector to another.
In general, a product is defined as a ‘thing produced by labor or effort’ or the ‘result of an act or a process’. In marketing, a product is anything that can be offered to a market that might satisfy a want or need. In retail, products are called merchandise. In manufacturing, products are purchased as raw material and sold as finished goods. In economics, product can be classified into goods and services. Goods are a physical product capable of being delivered to a purchaser and involve the transfer of ownership from seller to customer. Goods are items that are tangible, such as books, pens, hats, shoes etc. Services are activities provided by other people, such as doctors, lawn care workers, dentists, barbers, and waiters or online servers.
There are many description and theory of customer loyalty. We should research and compare which theory is suitable for our business.