CUSTOMER

VALUE
DIMENSIONS
MEASURES
Prepared by:
Baviskar Aman Vilas (14MF03)
Matts Aby Jo (14MF34)
M.E. Industrial Engineering

Introduction
The way of measure of product and service
Internal quality assurance external customer satisfaction
customer value

SCM is naturally an important component in fulfilling

customer needs and providing value.
SCM can also impact the important customer value of
price by significantly reducing costs.
Customer value drives changes and improvements in the
supply chain.
Customer value is also important for determining the type
of supply chain.

Customer Value
Customer value is a perceived preference for evaluation
of product attributes, attribute performance, and
consequences arising from use that facilitate (or block)
achieving the customers goals and purposes in use
situations.
Customer value the way the customer perceives the
entire companys offerings (products, services)
The strategy of Customer Value Management offers an
opportunity to understand the relationship between
customer satisfaction and key processes and to track
improvement in business results or competitive
positioning over time

Organisation transformational
model

Dimensions of Customer Value

Customer perception can be broken into several
dimensions:
Conformance to requirements
Product selection
Price and brand
Value-added services
Relationships and experiences

Conformance to Requirements
The ability to offer what the customer wants and
needs is a basic requirement to which SCM
contributes by creating availability and selection
market mediation function
the differences between supply and demand will lead to the
costs associated with the market mediation
Supply > demand inventory cost
Demand > supply lost sales and possibly market share

Customer access
the ability to easily find and purchase a product

In all, the company provides

Products, services for customers
The way for customers to know its products, services

Product Selection
The contribution of product proliferation (rapid reproduction/increase in
no) to customer value is difficult to analyze and understand.
The proliferation of products and difficulty in predicting demand for a specific
model force retailers and distributors to hold large inventories.
Sometimes there is no need to provide too many selections for one item

Three successful business trends

Specializing in offering one type of product : Starbucks, Subway
Megastores that allow one-stop shopping for a large variety of products :Wal-Mart
Megastores that specialize in one product area : Home Depot, Office Max,
Sportmart

Several ways to control the inventory problem of a large variety of

configuration or products
Build-to-order model : Dell
Larger inventories at major distribution centers: vehicles
A fixed set of options that cover most customer requirements

Price and brand

Price of products and the level of service are essential
parts of customer value
The price may not be the only factor a customer considers,
there may be a narrow price range that is acceptable for
certain products.

Brand an important factor affecting the price

The internet and its impact on consumer behavior have
increased the importance of brand names, because a brand
name is guarantee of quality in the buyers mind.
Mecedez cars, Apple iPhones, Rolex watches, Coach purses

Value-added services
Value-added offering can differentiate some companies
from their competitors and provide them with more
profitable pricing structures
Especially technical products : after sales services

Other reasons why many companies are adding more

services around their products:
The commoditization of products
The need to get closer to the customer
The increase in information technology capabilities

Value-added services
Support, maintenance
Information access

Relationships and experiences

An increased connection between the firm and its
customers makes it more difficult for customers to switch to
another provider
The learning relationship
Companies build specific user profiles and utilize this information to
enhance sales as well as retain customers

Beyond relationship, some companies are also designing,

promoting, and selling unique experiences to their
customers.
An experience occurs when a company intentionally uses services
as the stage, and goods as props, to engage individual customers
in a way that creates memorable events
Disneys theme parks, Airlines frequent flier program

Customer Value Measures

Various measures of customer value are:
Service level
Service level is the typical measure used to quantify a
companys market conformance.
Service level is usually related to the ability to satisfy a
customers delivery date.
There is a direct relationship between the ability to achieve a
certain level of service and supply chain cost and
performance.

Customer satisfaction

Service level
Service level is the typical measure used to
quantify a companys market conformance.
Service level is usually related to the ability to
satisfy a customers delivery date.
There is a direct relationship between the ability
to achieve a certain level of service and supply
chain cost and performance.

Customer satisfaction
Customer satisfaction surveys used to measure sales
department and personnel performance
Also provides feedback for necessary improvements in products
and services.
However, reliance on customer satisfaction surveys can often be
misleading
Measure customer loyalty
Easier to measure than customer satisfaction.
Analyze customer repurchase patterns based on internal databases.

Customer Defections
Identifying such customers not an easy task
Dissatisfied customers seldom cancel an account completely
Gradually shift their spending, making a partial defection.

THANK YOU