Exploring Customer Value and Value Proposition in Marketing Management

This report discusses the concepts of customer value and value proposition in marketing management. It explains the meaning of customer value and value proposition and evaluates their importance in the financial success of a company. The report also explores how UK supermarkets and Coles deliver value to customers. Recommendations are provided to Coles to increase competition and grow in the retail industry.

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Marketing Management BUMKT 5920
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Executive Summary
The objective of the paper is to explain the meaning of customer value and value proposition.
Customer value refers to the value that the organization provides to the customer while value
proposition refers to the things that an organization provide to the customers in order to
increase their purchase behaviour. The report evaluates the importance of these two concepts
in the financial success of a company along with the explanation of the ways in which Coles
provide value to the customers in the market. Lastly, recommendations are provided to the
company to increase competition and grow in the retail industry.

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Contents
Introduction................................................................................................................................2
Customer Value..........................................................................................................................2
Value Proposition.......................................................................................................................3
Critical concepts of Company’s Financial Success...................................................................4
Ways in which UK supermarket deliver value..........................................................................5
Ways in which Coles Supermarket deliver value......................................................................5
Customer Segmentation.............................................................................................................6
Communication of Value through Website................................................................................7
Recommendation........................................................................................................................8
Conclusion..................................................................................................................................8
References..................................................................................................................................9

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Introduction
The purpose of this report is to enlighten the reader about concepts of customer value and
value proposition in the environment. The report guidelines the reader about the concepts of
customer value and value proposition in an organization along with the difference in both the
concepts. The report talks about the importance of both the concepts in defining the financial
success of the company along with evaluation of UK supermarket to deliver value to the
customers in the market. Value proposition of Coles supermarket has been analysed with the
identification of customer segment of the company as well. Company website has been
identified for the communication of customer value in the environment. The fact should be
noted that value proposition and customer value are two most important aspects that a
business should consider in the external environment (Teece, 2018). More details about the
paper are discussed below:
Customer Value
Customer value refers to the value that an organization provides to customers in an external
environment. Customer value refers to the perception of the products and services that are
value to customers versus other possible alternatives (Kleinaltenkamp, 2015). Value has
many different meanings in the environment; to some customers value refers to the price
whereas to other people value might be seen as the benefit that they receive from the product.
However, the fact should be noted that based on different perception of the products in the
minds of customers, the company provide value accordingly. Customer value refers to the
satisfaction that the customer experiences by taking given product or service in the
environment (Eggert, Ulaga, Frow, & Payne, 2018). Customer value is the value that the
organization provides to its customers in response to their level of importance to them. Based
on the level of importance, the value of the customers also increases. Customer value
includes the fact that the company perceive them as important aspect for their growth and
recognition in the market. Customer value can recognized as the difference between what a
customer gets from the product and what they have to give in order to get it. It is the concept
that explains that the company provides efficient products and services to the customer to
order to attain their level of satisfaction in the market. Customer value can also be calculated

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using the perceived benefit up on cost invested in the business (Hall, & Roelich, 2016).
Higher cost invested by the customers in the business would show higher customer value as
well. The companies present in the environment reciprocate the customer value on the basis
of the cost that they invest in the environment. So, it should be noted that customer value is
different from value proposition because it is not a marketing concept that only evaluates the
product or service delivery but it also explains value of customer to the organization
(Chandler, & Lusch, 2015).
Value Proposition
Value proposition refers to the things that an organization provides to its customers in order
make them loyal and encourage them to buy more products of the company. It refers to the
set of benefits that a product promises to deliver to the customers. Value proposition of
different companies differ on the basis of the expectation of customers segment in the market.
A value proposition of the company promises to deliver, communicate and acknowledge the
value to the customers in the environment. Creating value proposition is a business strategy
of the company that initiates them to increase the customer value in the environment. The
value proposition strategy of the business adequately delivers the benefits to the customers so
as to increase their level of satisfaction in the market (Payne, Frow, & Eggert, 2017). The
strategy of value proposition applied to the whole organization and aims to change the
functioning of the business in such a way that the company attains the desired profitability in
the market. Developing the value proposition for the business is based on the analysis of
benefits, costs and value that the business can deliver to the customers. This concept can also
be elaborated as the process of positioning the value of the company. Value proposition
framework works on different parameters to provide benefit to the company. The main aim of
value proposition framework is to increase the satisfaction level of the customer so as to
increase profitability of the organization (Ehret, & Wirtz, 2017). Value proposition refers to
the promise that the business makes with the employees of the company in order to provide
best possible value from their products in the market. The value proposition framework aims
to develop the unique selling proposition for the company by developing efficient customer
value for them. Value proposition helps the organization to convince the customers that they
are getting optimum benefits in the environment (Lacoste, 2016).

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Critical concepts of Company’s Financial Success
Customer value and value proposition are the two most important concepts that are required
in initiating financial success of the company. Customer value helps the organization to
analyse the needs and importance of customers of the company. While value proposition
helps the organization to find out the particular customer segment and then provide them
products and services accordingly. It is very important for every business to effectively
induce the customer’s requirement in their product and channelize the same to as to attain
their interest in the target market. An organization in the external environment grows when
they are adequately satisfying the needs to customers (Skålén, Gummerus, von Koskull, &
Magnusson, 2015). For growing the business initially require to understand the value of
customers for the business and which people are important for them and who are not.
Analysing the customer value will subsequently help the management to propose adequate
value to them in the market. Thus, it can be said that customer value initially helps the
business in analysing the importance of the customers and what services can reciprocate the
money invested by them. While value proposition helps the company to position the products
and services of the business in the right direction (Patala, et. al., 2016). By positioning the
activities of the company in front of right customers, the company gets to enjoy financial
benefits in the environment. Thus, it should be noted that these two aspects are important for
the business they help in understanding the requirement of the customer segment and
providing them products and services accordingly. An organization can financially grow by
attracting the right type of customers in the market and delivering them services accordingly.
So, it should be noted that these two elements are important for the financial success of the
company because they identify the people whom the business should target and provide them
adequate services as well (Weinstein, 2016). These two activities together work to create
unique selling proposition for the company which further helps them to attain competitive
advantage in the target market. Thus, it should be noted that a business cannot run without
understanding the value of customers and providing them products and services accordingly.
These two aspects work hand in hand to help the business identify prospective customer and
treat them accordingly. Financial success of a firm comes with the customers are satisfied and
they believe that the company is providing them products and services in respect to the
money invested (Worm, Bharadwaj, Ulaga, & Reinartz, 2017). Thus, these frameworks help
in identifying the value of the customers and delivering them services accordingly.

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Ways in which UK supermarket deliver value
The fact is known to all that the UK supermarket is highly efficient and competitive as there
is presence of various large scale organization in this industry that are fighting to attain
competitive advantage in the target market. Companies like Tesco, Lidl, Aldi and Morrisons
etc. are present in the industry to gain the maximum share of the UK supermarket industry.
High degree of competition in the UK market is promoting the growth of industry and supply
of efficient services in the environment. The customers on the other hand are attaining benefit
of this cut throat competition in the environment (Ellickson, 2016). The nature of customers
has become flexible as they have lost loyalty for each and every supermarket company
present in the UK industry. The customers present in this industry majorly focuses on the
pricing of the products in the market, companies with low prices gains advantage other
companies in the market. Companies like Aldi and Lidl have gained advantage over
organizations because of presence of discounted stores in the UK market. The online market
of this industry is also growing with a great pace. Ocado is the biggest online supermarket
store that has targeted most of the customers of UK supermarket industry (Sales, Guarino,
Guizzardi, & Mylopoulos, 2017).
Ways in which Coles Supermarket deliver value
Coles is supermarket chain that is headquartered in Australian in the year 1914. The company
has more than 100000 employees and together with Woolworths, the company accounts to 80
per cent of the total Australian supermarket industry. The company has recently started
operating its business functions in the online market as well. In UK, Coles has joined hands
with Ocado giant UK online retailer to supply its products in UK market as well. The
company has total 807 stores present in the Australian location. Further, it should be noted
that the management of Coles successfully understand the importance of customer value due
to which they successfully satisfy them in the target market (Coles, 2019). The company has
loyal customers present with them who initiates repeated sales in the target market. Further, it
should be noted that Coles appropriately provides value to the customers in the market. The
company has its stores present at various locations that increase the feasibility of products of
the company. Further, it also has efficiently trained human resource who constant try to
provide maximum level of satisfaction to the visitors. Introduction of online platform of

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Coles has supported the value proposition of the company (Mortimer, 2017). Looking at the
market capitalized by the company, it can be easily understood that the company is
successfully providing benefits to the customers due to which they are coming back to Coles
only. This company efficiently understands the industry requirement to grow in accordance to
which they form strategies accordingly and create value proposition for the business.
Customer trust acts as the biggest advantage for the company in the target market (Sutton-
Brady, Kamvounias, & Taylor, 2015).
Customer Segmentation
The customer segment chosen for this analysis are the people who belong to age group 35-45
and most invest their time in working. These are the people who have a record of going to
supermarket store once in every week to purchase the supplies. Further, it should also be
noted that this customer segment is not easily distracted by the fancy perks of the competitors
because they are independent and have a routine of going the same place and buying things
and they have become used to it.
The fact should be noted that this segment seeks various differential values from the company
and expect them to do the same. Initially, the customer segment expects the business not to
change their business functions with a maximum extent that it affects their interest in the
Demographic:
 Lives in Australia
 Belongs to middle
income segment.
 Person belonging to
age group 35-45 years
 Self-Dependent
employed person
Behaviour:
 Go to supermarket
once in every week
 Like going to Coles
due to brand
consciousness
Need/ Goals: The need of the customer is to attain products
and services according to the income invested by them to
purchase it.
Name: An independent
middle age with middle
income level person.

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market. This segment believes that the management of the company should display the
products in the same way at the store so that they do not face difficulty in finding the product.
Secondly, the customer segment also expects the company to train their employees so that
they can help them in shopping. Adequate quality of the product is a value that people
belonging to all age group expect from the company. Further, it should be noted that the
company successfully delivers adequate value to this customer segment in the market. As
Coles know that this is the segment that has major share in the overall customer segment of
the company resulting to which they understand that it is important for them to fulfil their
needs otherwise they will lose them. Coles organize innovative business functions and
introduce them in the business slowly by educating the employees. So, in this way the
customers do not get affected by the changes happening in the company. Also, Coles aim to
ensure that the customers are getting quality products at optimum prices in the market.
Introduction of online platform of Coles has given an advanced edge to the functions of
company that has increased customers satisfaction subsequently.
Communication of Value through Website
The website of Coles includes diversified features that help the customers to gain information
about the history of the company and at the same time purchase products online. The
company clearly understands that it is their responsibility to treat customers properly and
provide them satisfaction through products and services as well. The website of the business
provides customer value in the environment by successfully detailing about the functions of
the company and enlightening the customers with the details of sales and delivery of the
product (Coles, 2019). Further, value proposition is received to the customers by shopping
through online platform of the company. The company follows a pathway through which
purchases are made by the customers which is then directed to the company and company
and message is generated regarding the confirmation and payment of the product. The
company has induced all the features in the website that effectively provide all the
information to the customers regarding its products and the company. This feature helps them
to communicate with the company in a better way (Ranjan, & Read, 2016).

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Recommendation
In consideration to the above aspects, it is recommended to the company that they should
further aim to increase the value proposition of their product by providing them to customers
at lower rates. With the emergence of high degree of competition in the supermarket industry
customers have started going to the companies that provide the same products at low rates. So
the company should aim to reduce the prices of their product. Along with this, they should
also focus in opening outlets in the UK region so as to deliver higher degree of satisfaction to
the customers from the environment. Opening more physical stores at local regions will
provide opportunity to the customers to locate the stores and purchase product from them.
This aspect will increase the sales of the company in the environment. As discussed above
that customer value and value proposition are two most important aspects that help the
company to deliver satisfaction to the customers in the market and subsequently increase
financial profitability of the business. So, the management of Coles should focus on investing
in the research and development segment so as to ensure the current market trends and
introduce them in the business as well. The company should seek feedbacks from the
customers on every purchase so as to know the areas where they are lacking behind and the
areas where the company is excelling in the market. Thus, these activities will further help
the company Coles to grow in future and deliver value to the customers as well.
Conclusion
Thus, in the limelight of above mentioned event, the fact should be noted that the paper
evaluated information about customer value and value recognition for a company in
supermarket industry. Customer value and value recognition are two most important factors
that ignite the financial success of the company in the target market. Coles Inc. is an
organization represented in the paper that explains the ways in which the company provided
value proposition to the customers to one particular customer segment of the company. The
paper evaluated the company understand the needs and value of customers in response to
which they provide adequate services to them efficiently. Coles has also started its online
platform to increase the value proposition. Thus, recommendations are provided to the
company to increase the satisfaction of customers by enhancing their products and services.

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