Customer Value and Value Proposition

This paper analyzes and understands the concepts of customer value and value propositions offered by Woolworths limited to its respective customers. It explores the customer segment and value required. The paper also provides recommendations for providing the best customer services to offer more value to the customers.

Running Head: BUMKT5902
Customer Value and Value
proposition
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Marketing Management
Executive Summary
Offering values to the consumers with the help of greater quality of products and services helps
in facilitating the overall growth of the organization throughout the concerned market segments.
The primary motive of the paper is to analyze and understand the concepts of customer value and
value propositions offered by Woolworths limited to its respective customers. The firm is
engaged in delivering the best value to the customers enhancing their product quality and by
offering wide range of products as per the needs of the customers. The paper presents the
analysis of customer value by identifying one segment of the customer at Woolworth
supermarket. Moreover, the paper also provides the desired way through which the value is
communicated to its customers. There are few of the crucial recommendations that will help in
providing the best customer services in order to offer more value to the customers as it helps in
providing the desired promotion in the growth of the organization throughout UK market
segments.

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Marketing Management
Table of Contents
Introduction......................................................................................................................................3
Discussion of Customer value.........................................................................................................3
Discussion of the Value proposition................................................................................................3
Explanation of why concepts are critical to marketing success......................................................4
UK supermarket value delivered.....................................................................................................4
Woolworth's supermarket value delivered to customers.................................................................5
Woolworth's supermarket customer segment and value required...................................................5
Website analysis of Woolworth’s supermarket...............................................................................6
Recommendations............................................................................................................................6
References........................................................................................................................................8
Appendices....................................................................................................................................10

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Introduction
The background of the report signifies that customer value refers to the assessment of negative as
well as positive consequences of the use of services or products. The paper will helps in
evaluating concepts related to customer value. Value propositions differ across several market
segments and reflect the understanding of the value of a firm to gain consumers as well as to give
high competition to the competitors.
The purpose of the report is to evaluate the concepts of customer value as well as the value
proposition by obtaining several definitions. It will also explain the importance of both the
concepts to the financial success of the firm. Few recommendations will be provided to the
supermarkets for enhancing customer value which would create customer loyalty as well as
brand loyalty.
The format of the report includes the customer value, value propositions, the concepts are critical
to the financial success of the company, customer value delivered by supermarkets of UK,
customer value provided by Australian supermarket, Woolworth deliver value to its customers,
market segment of the Woolworth, communication of the value through the websites of the
supermarket and recommendations along with appendices.
Discussion of Customer value
Consumer value can be defined as the benefit which would be obtained by the customers after
consuming a goods or service (Payne, Frow & Eggert, 2017).
Another definition of the consumer value is that it refers to the satisfaction that the customers
experience when they consume a given service after being paid for that.
The customer value can also be defined as the difference between the product that the customer
gets and the costs that the consumer has to pay in return (Tantalo & Priem, 2016).
Yes, there are variations in the definition of customer value. The definition of customer value is
provided in various ways by using several terms. The value that a consumer place for the
offering of product or service is known as the customer value. The value of the customers relies
on three aspects such as price, quality, and service. The creation of customer value helps in
enhancing the satisfaction of the customers as well as their experiences (Alves, Fernandes &
Raposo, 2016). Customer value can be created by focusing on the target customers, needs and
problems, a unique offering of the product or service. Woolworth deliver value to its customers
by providing superior quality products.
Discussion of the Value proposition
The value proposition can be defined as the promise made by the organization to the consumers
that the company will deliver a value developing benefits.
It can also be referred to the written statement that helps in focusing all the market activities of
the company for developing differences in the decision-making process of the consumers.
Another definition of a value proposition is that it refers to the entire set of experiences which
contains the value for money brought down by the company to its customers.

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There is no one accepted definition of the concept ‘value proposition’. The definitions are
varying among different perspectives. A value proposition is necessary for the organizations to
improve the effectiveness of the process of a product for retaining customers as well as enhance
the share of the market. It is a significant part of the strategy of the business. The value
proposition of Woolworth is “Always at Woolworths.” It means a promise to be delivered by the
organizations to its customers. The main purpose of the value proposition is to an emphasis on
the individual value of the customer. The major reason for using value proposition is that it
connects with the issues of prices and it means different to different customers (Schwepker Jr &
Ingram, 2016).
Explanation of why concepts are critical to marketing success
The idea of a value proposition is critical to the financial success of the firm because it is an
essential strategy for creating marketing communications so that the firm would capture the
attention of the customers (Sheehan & Bruni-Bossio, 2015). A value proposition mainly refers to
the positioning statement of the company that explains the benefits of the product offered by the
firm. It is vital for maximizing the benefits that the customers value most. By creating a value
proposition, the company could earn competitive advantages and customer loyalty towards the
brand. It is critical for the success of the business as it provides critical benefits to the users and
detailed information about the offering of the products. The value proposition helps in driving
sales for the company which would increase revenue and also develops the customer base. It
helps in perceiving greater value to the company. It also provides the best possible deals to the
customers of the company which leads to the success of the business.
The concept of customer value is critical to the success of the firm because it helps in gaining
profitable as well as strong relationships with the customers. The customers are the base for the
success of every business (So, King, Sparks & Wang, 2016). The customer value is crucial for
the marketing strategy of the company which would ensure satisfaction of the customers and
thus, increases in profit. It would fulfill the requirements and wants of the customers who help
the company in retaining its customers. It is also essential for building an excellent reputation for
the company in the market so that more customers will be attracted and buy the product which
helps in increasing the success of the firm financially (Zhang, Guo, Hu & Liu, 2017). If the
company provides value to its customers, then it would earn a huge profit and promote its
business for attracting new customers.
UK supermarket value delivered
The supermarkets of UK seeks value to deliver to the end customers so that they build value for
retaining the existing consumers as well as to attract the new customers (Lauritsen & Perks,
2015). Following are the supermarkets of the UK that deliver value to the end customers:
Asda – It is a supermarket company that ranks second in the UK for its sales. The value
proposition is made by the company in the form of a written statement. The statement is made to
deliver the promise to its consumers. The value proposition of the company is “saving your
money every day.” It also provides low price products to its customers. The primary perspective
of the company is to deliver the products at the lowest prices to its UK customers which would
offer a competitive advantage to the firm (Sullivan & Gouldson, 2016).
Tesco – The company ranks third in the world and top retailing companies in the UK. The
Company provides value to its customers by organizing a campaign or through a scheme

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(Schmutz, Kneafsey, Kay, Doernberg & Zasada, 2018). It offers a loyalty card to its customers
so that the customers get the insights of the supermarket. Tesco provides vouchers or designs to
the customers so that the customers would purchase the product that the company prefers to buy.
It provides a value proposition statement that is “every little help” which shows the way of
providing value to its customers. Several activities are introduced by the company for creating
loyalty to the customers.
Sainsbury – The value proposition statement of the company is ‘our value makes us different.’ It
consists of five factors that are significant for delivering value to its customers. The factors are
the best record for health and food, respect for the environment, sourcing with integrity, making
the firm a good place for working and makes an optimistic difference to the community (Hassan,
2012). These factors include all such staffs who are responsible for delivering value to the end
customers. The company aims to provide fresh, safe, tasty and healthy food with superior quality
to the customers at a fair price.
Waitrose – It is one of the most recognized supermarket company in the UK. It delivers value to
its end customers by focusing on several factors. It offers fresh as well as quality food to its
customers. It creates value to its partners instead of creating value to shareholders. It claims that
it would sell “honestly priced quality food” even if the prices are higher than the other
supermarket company (Yrjölä, Saarijärvi & Nummela, 2018).
Woolworth's supermarket value delivered to customers
Woolworths Supermarket has implemented a strategy to gain the trust of its huge customer base.
It aims to improve all aspects of their shopping behavior and maximize its share of food spend
through lower prices. The firm is engaged in maintaining the superior quality of products, and it
has gathered a large consumer base by working as per their satisfaction level of the consumers. It
is well-known for providing better customer service by offering more appealing range, superior
freshness and better convenience to its consumers (Guy, Brown & Banks, 2018). The food
strategy implemented by Woolworths is based on three key principles are as follows:
 Efficiency: Generating consumer value by executing Lean Retail model and organizing for
success
 Growth: Creativity to meet the need of the customers
 Offer: Enhancing the significant offer to make sure that consumers give value to Woolworths
The company has also adopted a new value and pricing strategy to contain Aldi's impact on sales
and neutralize Coles. It also helps in measuring the targeted consumers, better ranging and lower
pricing of products offered to its customers (Beckett & Chapman, 2018). Woolworths also makes
efficient use of improved and loyalty system that improves Own Brands. Woolworths generates
better priced, and higher quality Own Brands to eliminate range gaps where there does not exist
any branded alternative. The organization has designed refurbishments for local customers
especially in the areas where they see huge potential for consumer growth (Azeem, Baker,
Villano, Mounter & Griffith, 2018). This particular strategy also includes rebalancing capital
expenses among existing stores and new stores to provide convenience to its customers.
Therefore, Woolworths is highly committed to selling its products to its customers at low prices
to enhance customer experience.

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Woolworth's supermarket customer segment and value required
Segmentation is based on dividing the market into various parts related to different that consist
of demographical features such as product characteristics and economic features among others.
Each segment of Woolworths consists of customers with the same quantum of services or
products along with the same pattern of consumption of the product. The multiple segments of
Woolworths based on demographical features of customers consist of the average level of the
consumers, gender and age (Bailey, 2016). For the company, gender plays a vital role in the
development and commencement of a huge number of retailing services and goods. Woolworths
focuses on the fact that each product is designed to fulfill the needs of a specific gender. For
example, the homecare and clothing products are manufactured differently based on the
preference of the customers belonging to different genders.
Segregation of retailing products related to different levels of age group is determined to be a
vital policy for the company to mitigate inventory obsolescence or overstocking. Woolworths
provides large sets of infant food products to the children with the age group below 5. It also
designs products for customers under the age group of 6-17 and also satisfies the requirement of
the customers above 55 years (Woolworths Supermarkets - Woolworths Group. 2019). Moreover,
it has been observed that the segmentation based on the income level of the consumers has
helped Woolworths to create a set of different initiatives. Such creation leads to findings of
products from the manufacturers or producers. This states the fact that the buying power of the
customers helps in maximizing the growth of a particular product (Skålén, Gummerus, von
Koskull & Magnusson, 2015). Therefore, it helps Woolworths to measure the demand for a
product based on a particular product line that helps in evaluating the actual level of income of
the customers. Thus, it has been observed that Woolworths Supermarket seeks value by
maintaining its market share and targeting customers based on their demographical features.
Website analysis of Woolworth’s supermarket
The website of Woolworths Supermarket is created to focus upon providing better customer
service or value, product innovation and data utilization. With the help of Woolworth’s website,
the company transforms its business to customer-centric and support to neutralize its rivals. The
websites state that the company works hard to improve its product line to meet the demands of
the customers better. It helps customers to gain information about the lean model adopted by
Woolworths to improve customer value and service. As a result, the website helps in better
communicating with the customers regarding the products and services offered by Woolworths
(Merrilees, 2016). The strategy is designed and implemented to measure the performance of the
employees present in the existing as well as new stores. According to the website to increase
customer service level the company has brought an additional 58,000 working hours in-store.
With the help of the website, Woolworths informs its customers about their investments in the
digital world by launching a new online shop. The website also helps in gaining information
about their social media strategy. Woolworth’s website is colorful and bright that provides a
huge amount of information to help customers feel more comfortable while shopping online
(Bogomolova, Loch, Lockshin & Buckley, 2018). Moreover, it can be seen that the engagement
of Woolworths with its customer base is highly incredible where the websites are liked and
shared by several customers.

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Recommendations
To provide appropriate value to the customers, it is highly recommended that Woolworths must
shape and define the tactical and strategic methods in various aspects. These components should
be placed in marketing based on customer feedback. The products of Woolworths must be
advertised, promoted and communicated appropriately to all the consumers to help them to know
the exact value of the products. It is also recommended to effectively adopt customer value
delivery strategy based on the learning process of customer value. The company must make
efficient use of customer value determination framework to gain relevant information regarding
customer value. This process begins with the value of the target customers that includes
identifying and analyzing products or services and collecting data about the consumers. The
organization must give priority to its customers that will result in greater innovation, more
compelling offers and lower prices.
It is essential for Woolworths to implement a decisive communicate strategy that will value the
products and services of its huge customer base. For the company, innovation must be a constant
process that provides new opportunities to create new products as per the demand of the
customers. Woolworths must create a new distribution channel that will focus upon the private
labeling of the products to increase sales revenue. Innovation and creativity can be done by
creating new strategic opportunities like, repositioning product and business development and
expanding the current market. The organization must acquire the feedback of the customers
based on the experience of using the product that may reflect the buying behavior of the
customers. To reach a wide group of customers while making sales promotion, Woolworths must
focus upon maintaining a strong relationship with customers and enhance regular advertising of
products.

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References
Alves, H., Fernandes, C., & Raposo, M. (2016). Value co-creation: Concept and contexts of
application and study. Journal of Business Research, 69(5), 1626-1633.
Azeem, M. M., Baker, D., Villano, R. A., Mounter, S., & Griffith, G. (2018). Food shoppers’
share of wallet: A small city case in a changing competitive environment. Journal of
Retailing and Consumer Services, 43, 119-130.
Bailey, M. (2016). Marketing to the Big Middle: establishing Australian discount department
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Woolworths
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Appendices
Figure: Woolworths Supermarket
(Source: Nilssen, Bick & Abratt, 2019)
Figure: Customer value preposition of Woolworths Supermarket
(Source: Kasai & Chauke, 2017)