Question

1. What is customer value? Explain in detail how it relates to customer satisfaction.

2. Select a product and describe how that product provides value to the customer.

Answer 1

1. Customer value explains what benefits the customers are expecting from buying a product or a service against the cost of that purchase. Every customer has a customer value and this determines how a product is performing in the market. The product quality, service quality, and price play an important role in determining the customer value. So if the customer value is good then the customer satisfaction will also increase. There is a positive correlation between the customer value and the customer satisfaction. The product quality is measured from the perspective of a customer because he is the end user and his feedback will matter a lot. So the company needs to give importance to the product quality. The service provided to the customer after the purchase also matters a lot. The customer would expect a good support when he faces some problem with the product. This will show how much the company carer for its customers. The cost of the product will differentiate the company from its competitors in the market. It can provide a competitive advantage if a good pricing strategy is followed. The pricing should be in the favor of the customers and it should be affordable to them. So the customer value is directly related to the customer satisfaction.

2. Let us take the example of the product Xiaomi smartphone. The smartphones from this brand are a huge success in the market. This is because the product adds a lot of value to the customers. The company is providing a quality product at an affordable price. The smartphone has all the features that a customer can expect and it is available at a price lower than the market standards. So the customers are very happy with the value this product is adding to them.