Analysis of Customer Value and Value Proposition in Modern Organizations: A Case Study of Asda

This report analyzes the concepts of customer value and value proposition in modern organizations, focusing on Asda. It discusses the importance of these concepts, how Asda provides value to customers, and recommendations for improvement.

Running head: MARKETING MANAGEMENT
MARKETING MANAGEMENT
Name of the Student
Name of the University
Author Note

1MARKETING MANAGEMENT
Executive Summary
The report is based on the analysis of customer value and value proposition related concepts
with respect to the modern organizations. The importance of these concepts for the modern
organizations has been analysed in the report in detail. The organization that has been taken
into consideration for this analysis is Asda. The ways by which Asda aims at providing value
to the customers has been discussed in the report. The use of the website of Asda in providing
effective customer value is also a major part of the repot. Recommendations are provided
based on the ways by which Asda can improve its operations and levels of value that are
provided to the customers as well.

2MARKETING MANAGEMENT
Table of Contents
Introduction....................................................................................................................3
Customer value...............................................................................................................3
Value proposition...........................................................................................................5
Description of why the concepts are critical to a firm’s financial success....................5
Ways by which UK supermarkets deliver value............................................................7
Ways by which supermarket delivers value to me.........................................................8
One customer segment at my supermarket and the value it seeks...............................10
Ways by which value is communicated via my supermarket’s website......................11
Recommendations........................................................................................................11
References....................................................................................................................13

3MARKETING MANAGEMENT
Introduction
The analysis that will be made in the report will be based on relationships that have
been developed by different organizations with the customers. Proper development of value
that can be provided to the customers is a major part of the analysis that is to be made in the
report. Value proposition and its importance to the organization will be analysed in the report
based on the impact that it has on the customers. The company or supermarket that has been
selected for the analysis related to customer value and value proposition is Asda (Agrawal,
Kaushik & Rahman, 2015).
Asda is a British supermarket that is headquartered in Leeds, West Yorkshire. The
organization was established in the year 1949 with the merger of the supermarkets that were
owned by two families. The organization expanded its operations in the southern part of
England in the 1970s and 1980s (Asda.com. 2019). Asda had acquired Allied Carpets and
Gateway Supermarkets during this time period on order to improve its supermarket based
operations in the United Kingdom. Asda has gained the position of the second biggest
supermarket based chain in the world between the years 2003 and 2014 (Asda.com. 2019).
The structure of the report will be developed based on the explanations that are
provided related to value proposition and customer value and the role that is played by these
factors in the financial success of different organizations. The value that is provided by Asda
to a particular customer will also be a major part of the analysis that is to be made in the
report. The recommendation will be provided related to changes which will be made in value
offering methods that are applied by an organization (Anker et al., 2015).
Customer value
As discussed by Andreassen et al. (2018), the incremental and effective benefits that
can be derived by consumers of a particular organization with the proper consumption of

4MARKETING MANAGEMENT
products can be defined as value. The benefits that have been gained by customers are
considered to be important part of the customer value. Value or benefits are generally
provided by the organization after the payment for particular products and services have been
made. The benefits that are provided to the customers are quite different from the costs of
various products. Three significant factors are able to affect the customer value in
organizations mainly include, price, service and quality (Arslanagic-Kalajdzic & Zabkar,
2015). These factors are able to develop a “customer value triad”.
As discussed by Bowen and Chen McCain (2015), the quality of services is able to
improve the value which are offered to the consumers by different modern organizations. The
service quality of an organization is able to increase or decrease the value that is provided to
the customers. The cost of production of services and products that are offered by the
organization are affected by various organizational parameters that include, social influence,
service, cost, marketing, quality, past experiences. The desired value of the customers is also
considered to be important for the services that are offered to them (Brozovic, Nordin &
Kindström, 2016).
According to Carvalho and Jonker (2015), perceived value on the other hand is based
on the tangible benefits which are received by consumers with respect to the costs. Value is
mainly created by the focus that organizations have on the systems and processes along with
the culture and mind-set of the individuals. The long term success of an organization is
dependent on the culture that has been developed. The proper understanding of customer
value is considered to be important for the organizations in order to maintain their profitable
operations (Chou, Chen & Conley, 2015). The concept based on customer value is considered
to be important for the ways by which the organizations are able to retain a loyal customer
base. The companies will also be able to earn a greater share in the market with the
development of proper value that is provided to customers (FitzPatrick et al., 2015).

5MARKETING MANAGEMENT
Value proposition
According to France, Merrilees and Miller (2015), the value proposition that is
developed by an organization is mainly related to the promise that they make to deliver to
customers if they are willing to purchase their products. The company also aims at providing
effective information related to the position that has been developed in the industry. The
business or marketing related statement of the organization can thereby be presented with
respect to the particular service or product (Grace & Lo Iacono, 2015). The brand value of the
organization is also increased in the minds of consumers with the help of the value
proposition based statement that is formed. The organizations are able to compel and
persuade the customers to purchase the products that they offer with the help of an effective
value proposition (Heinonen & Strandvik, 2015).
As discussed by Homburg, Jozić and Kuehnl (2017), the image of the brand is also
easily developed by the organization by the effective formation of a value proposition based
statement. The perceived value needs to be considered by customers in order to develop the
operations of the organization in the industry. The information related to product portfolio of
the organizations are communicated to customers with the help of effective value proposition
statements (Macdonald, Kleinaltenkamp & Wilson, 2016). The demands and needs of
consumers can thereby be fulfilled with the proper support that is provided by an effective
value proposition based statement. Value proposition can be used effectively in order to
provide information based on benefits that are offered by the products and the ways by which
their needs can be fulfilled as well (Makkonen & Olkkonen, 2017).
Description of why the concepts are critical to a firm’s financial success
As discussed by Martelo-Landroguez and Cepeda-Carrión (2016), the communication
process that is developed by an organization has an impact on the value that it provides to

6MARKETING MANAGEMENT
customers. The development of customer value is considered to be highly important for the
ways by which organizations are able to achieve the goals and objectives that have been set
on a long term and short term basis (McColl-Kennedy et al., 2015). Organizations can further
increase the customer base with the help of proper levels of value that are provided to them.
The proper operations of the organizations are considered to be an important factor that is
affected by the valuable customers. The customer perceptions have an impact on the ways by
which organizations are able to develop a unique position in the industry (Nenonen &
Storbacka, 2016).
According to Pfisterer and Roth (2015), customer engagement levels are increased by
development of the customer engagement activities and ensuring that they are satisfied by the
services and products. The value offered to customers is highly important for proper
formation of effective differentiation in comparison to the other organizations that have their
operations in the industry. The organization can maintain the operations on a long term basis
by the levels of value that are provided to them. The demands and needs that have been
developed by the customers are aligned in an efficient manner (Sajtos, Kreis & Brodie,
2015). Revenues of the organization can be increased effectively with the help of highly
engaged customers. Sales persons who are appointed by the organizations have the ability to
increase levels of value that are provided to the customers. The organizations can thereby
maintain the customer base for long periods of time with the help of effective value offered to
them (Yu & Sangiorgi, 2018).
As discussed by Zhang et al. (2015), value proposition of an organization is an
important part of the growth that is gained in the industry. The attention of the customers can
be gained and effective levels of benefits ca be provided to them. The proper formation of
value proposition is considered to be highly significant for the performance that is depicted in
different industries. Differentiation can be formed by the organizations in the industry with

7MARKETING MANAGEMENT
the value proposition based statement (Sajtos, Kreis & Brodie, 2015). The share of an
organization can be increased in the market by development of a proper value proposition in
their respective industries. The share that is gained by the organization is considered to be an
important factor that leads to the formation of value proposition (Pfisterer & Roth, 2015).
As discussed by Martelo-Landroguez and Cepeda-Carrión (2016), the communication
process that has been formed in an organization is able to affect the various types of tools that
are used for increasing the levels of effectiveness of the business operations. The success that
is gained by the modern organizations is based on the revenues and profitability that have
been developed. Financial success levels of organizations are considered to be highly
important for the ways by which they are able to maintain the operations and provide value to
the customers as well (Macdonald, Kleinaltenkamp & Wilson, 2016). Operational efficiency
levels are also considered to be highly important for development of an effective position of
the organization. Value proposition and customer value are able to play the most significant
role in improving the levels of operational efficiency in the industry. The services and
products that are being offered by the organizations have an impact on the proper formation
of value proposition based statements (Arslanagic-Kalajdzic & Zabkar, 2015).
Ways by which UK supermarkets deliver value
As discussed by Homburg, Jozić and Kuehnl (2017), the UK retail industry is highly
competitive and successful in nature and the operations of different organizations in the
industry are mainly related to the value proposition based statements that have been formed.
The different organizations that are considered to be most important parts of the competitive
retail industry of the country mainly include, Asda, Waitrose, Morrisons, Sainsbury’s, Tesco
and Ocado. The competition levels in UK retail industry are high and different supermarkets

8MARKETING MANAGEMENT
have aimed to deliver the highest value to customers for the purpose of developing the
competitive advantage (Brozovic, Nordin & Kindström, 2016).
As discussed by Homburg, Jozić and Kuehnl (2017), the convenience levels of
customers can be increased effectively with the help of home delivery and online shopping
based facilities that are provided to them. The development of differentiation is considered to
be highly important for the ways by which sustainable operations of the organizations can be
maintained for a longer period of time (Martelo-Landroguez & Cepeda-Carrión, 2016). The
types of delivery based options that are offered to the customers are considered to be
important for formation of an effective position in the supermarket industry. An app named
“mySupermarket” had been developed in the UK in order to provide opportunities to
different organizations in order to attract the customers (Macdonald, Kleinaltenkamp &
Wilson, 2016).
According to France, Merrilees and Miller (2015), the levels of savings of the
customers are considered to be important for the ways by which the supermarkets in the UK
are able to operate. The customers in UK supermarket industry have also been provided with
the “delivery passes” which are charged between the amounts of 60 Euros to around 110
Euros on a yearly basis. The customers are able to purchase different products that they desire
with the help the pass that is provided to them by various organizations (Homburg, Jozić &
Kuehnl, 2017).
Ways by which supermarket delivers value to me
As a customer of the Australian supermarket Woolworths, the value that is offered by
the organization plays an important role in the development of a loyal customer base.
According to France, Merrilees and Miller (2015), the customers in the Australia supermarket
industry are provided with major levels of value with the help of different products and

9MARKETING MANAGEMENT
services that are a part of the portfolio. The development of long term relationships is
considered to be important for the organizations in order to provide effective levels of value
to the customers. The organizations have to maintain the long term relationships in order to
increase the share that has been gained in the market. The companies have to form various
strategies for addressing the concerns and issues of the consumers. Retail industry of the
Australia consists of organizations that aim at providing effective value to the consumers and
developing a competitive advantage as well (Arslanagic-Kalajdzic & Zabkar, 2015).
As discussed by Bowen and Chen McCain (2015), Woolworths has provided major
importance to the value that can be provided to the customers and the ways by which
competitive advantage can be formed. The proper development of competitive advantage is
thereby considered to be effective for the ways by which Woolworths can satisfy the
customers. The services that are offered by Woolworths to the customers are based on the
ways by which the company is able to fulfil the strategic intentions and can achieve the goals
and objectives. The customers have been considered to be the heart of the operations of
Woolworths in the retail industry of the Australia (Sajtos, Kreis & Brodie, 2015).
As discussed by Martelo-Landroguez and Cepeda-Carrión (2016), the data of
customers has been used by Woolworths in order to improve the journey of customers in an
effective manner. The loyalty card based programme has however not been used by
Woolworths in order to manage the data of customers in an effective manner. The data team
of Woolworths is mainly based on the insight, customer experience and CRM. The attitude of
the retailers towards the data of customers that has been gained is considered to be an
important factor that is related to the value that can be provided to them (Sajtos, Kreis &
Brodie, 2015).

10MARKETING MANAGEMENT
As discussed by Zhang et al. (2015), the demands and needs of the customers can be
analysed in an effective manner with the help of data that is gained with respect to their
purchases. Data is taken seriously by the customers and changes in the organization can also
be driven effectively by the improvement of customer experience in an effective manner. The
proper improvement of customer experience is based on the ways by which the organization
is able to maintain the data based on purchases that have been made by the customers on a
daily basis (Arslanagic-Kalajdzic & Zabkar, 2015). The organizational processes can also be
optimised in an effective manner with the help of changes that have taken place and proper
development of the new services and products. The number of transactions that are made by
the organization are also recorded effectively with the help of data management based
systems that are developed by Woolworths. The pricing model that has been formed by
Woolworths is innovative and is able to create value that is offered to the customers (Sajtos,
Kreis & Brodie, 2015).
According to Pfisterer and Roth (2015), Woolworths has also focussed on improving
the levels of trust that customers have on the brand. The increase of trust levels also leads to
the positive growth of sales in the industry. The organization has been able to gain its
position as the third cheapest supermarket in the Australia retail industry. However, major
levels of attention need to be provided to the ways by which trust of the customers can be
increased as well. Woolworths has recently started taking steps based on the ways by which
the organization can provide higher value to the customers with the help of their trust on the
brand.
One customer segment at my supermarket and the value it seeks
As discussed by Homburg, Jozić and Kuehnl (2017), the online customer segment of
Woolworths is able to provide the levels of revenues that are gained by the organization on a

11MARKETING MANAGEMENT
yearly basis. More than 90% of the business operations that are performed by Woolworths
are mainly based on the store based customers. However, the company needs to maintain
balance in the services that are offered to different types of customers in order to address the
shifts that have taken place in the market. The growth in market shifts have an impact on the
ways by which different organizations in the industry develop their services (Homburg, Jozić
& Kuehnl, 2017).
Woolworths has been quite successful in its operations in the retail industry of the
Australia. However, major levels of improvements are required in the value that the
organization aims at providing to the online customers as well. The improvement of business
operations of the organization is considered to be an important factor that has an impact on
the ways by which it is able to improve the share that is gained in the market (Brozovic,
Nordin & Kindström, 2016). The online customers need to be provided with effective
discounts and offers in order to retain them for a longer period of time. On other hand, the
data of online customers can also be used by the organization in order to develop the products
and services based on their personal needs and choices (Pfisterer & Roth, 2015).
Ways by which value is communicated via my supermarket’s website
The website of Woolworths is highly interactive in nature and is able to provide major
offers and discounts to the customers. The communication is developed with the customers
with the help of proper links that have been formed based on the social media websites. The
social media communications are able to play a key role in the ways by which different
customers can be understood by the organization (Woolworths.com. 2019). The value
proposition of Woolworths is also communicated to the customers with the proper usage of
the website. The customers can also search for the stores of Woolworths with the help of its
website and the information that is provided as well. Different initiatives that have been

12MARKETING MANAGEMENT
implemented by Woolworths in the retail industry are communicated to the customers
through the website (Macdonald, Kleinaltenkamp & Wilson, 2016).
Recommendations
The major recommendations that can be provided to Asda in order to maintain its
operations in the retail industry are as follows,
Improving the levels of value that are offered to the online customers.
Development of proper communication based process with the help of the
interactive website of the organization.
Offering different types of loyalty based programmes to the customers in order
to retain them for a longer period of time.

13MARKETING MANAGEMENT
References
Agrawal, A. K., Kaushik, A. K., & Rahman, Z. (2015). Co-creation of social value through
integration of stakeholders. Procedia-Social and Behavioral Sciences, 189, 442-448.
Andreassen, T. W., Lervik-Olsen, L., Snyder, H., Van Riel, A. C., Sweeney, J. C., & Van
Vaerenbergh, Y. (2018). Business model innovation and value-creation: the triadic
way. Journal of Service Management, 29(5), 883-906.
Anker, T. B., Sparks, L., Moutinho, L., & Grönroos, C. (2015). Consumer dominant value
creation: A theoretical response to the recent call for a consumer dominant logic for
marketing. European Journal of Marketing, 49(3/4), 532-560.
Arslanagic-Kalajdzic, M., & Zabkar, V. (2015). The external effect of marketing
accountability in business relationships: Exploring the role of customer perceived
value. Industrial marketing management, 46, 83-97.
Asda.com. (2019). Asda.com - Online Food Shopping, George, & more. Retrieved from
https://www.asda.com/
Bowen, J. T., & Chen McCain, S. L. (2015). Transitioning loyalty programs: A commentary
on “the relationship between customer loyalty and customer
satisfaction”. International Journal of Contemporary Hospitality Management, 27(3),
415-430.
Brozovic, D., Nordin, F., & Kindström, D. (2016). Service flexibility: conceptualizing value
creation in service. Journal of Service Theory and Practice, 26(6), 868-888.

14MARKETING MANAGEMENT
Carvalho, J., & Jonker, J. (2015). Creating a Balanced Value Proposition–Exploring the
Advanced Business Creation Model. The journal of applied management and
entrepreneurship, 20, 49-64.
Chou, C. J., Chen, C. W., & Conley, C. (2015). Creating sustainable value through service
offerings. Research-Technology Management, 58(2), 48-55.
FitzPatrick, M., Varey, R. J., Grönroos, C., & Davey, J. (2015). Relationality in the service
logic of value creation. Journal of Services Marketing, 29(6/7), 463-471.
France, C., Merrilees, B., & Miller, D. (2015). Customer brand co-creation: a conceptual
model. Marketing Intelligence & Planning, 33(6), 848-864.
Grace, D., & Lo Iacono, J. (2015). Value creation: an internal customers’
perspective. Journal of Services Marketing, 29(6/7), 560-570.
Heinonen, K., & Strandvik, T. (2015). Customer-dominant logic: foundations and
implications. Journal of Services Marketing, 29(6/7), 472-484.
Homburg, C., Jozić, D., & Kuehnl, C. (2017). Customer experience management: toward
implementing an evolving marketing concept. Journal of the Academy of Marketing
Science, 45(3), 377-401.
Macdonald, E. K., Kleinaltenkamp, M., & Wilson, H. N. (2016). How business customers
judge solutions: Solution quality and value in use. Journal of Marketing, 80(3), 96-
120.
Makkonen, H., & Olkkonen, R. (2017). Interactive value formation in interorganizational
relationships: Dynamic interchange between value co-creation, no-creation, and co-
destruction. Marketing Theory, 17(4), 517-535.

15MARKETING MANAGEMENT
Martelo-Landroguez, S., & Cepeda-Carrión, G. (2016). How knowledge management
processes can create and capture value for firms?. Knowledge Management Research
& Practice, 14(4), 423-433.
McColl-Kennedy, J. R., Gustafsson, A., Jaakkola, E., Klaus, P., Radnor, Z. J., Perks, H., &
Friman, M. (2015). Fresh perspectives on customer experience. Journal of Services
Marketing, 29(6/7), 430-435.
Nenonen, S., & Storbacka, K. (2016). Driving shareholder value with customer asset
management: Moving beyond customer lifetime value. Industrial Marketing
Management, 52, 140-150.
Pfisterer, L., & Roth, S. (2015). Customer usage processes: A conceptualization and
differentiation. Marketing Theory, 15(3), 401-422.
Sajtos, L., Kreis, H., & Brodie, R. (2015). Image, brand relationships and customer value:
Exploring the moderating role of advertising spending-and labour-intensity in
customer loyalty. Journal of Service Theory and Practice, 25(1), 51-74.
Yu, E., & Sangiorgi, D. (2018). Service design as an approach to implement the value
cocreation perspective in new service development. Journal of Service
Research, 21(1), 40-58.
Zhang, J., Jiang, Y., Shabbir, R., & Du, M. (2015). Building industrial brand equity by
leveraging firm capabilities and co-creating value with customers. Industrial
Marketing Management, 51, 47-58.
Zhang, T., Lu, C., Torres, E., & Chen, P. J. (2018). Engaging customers in value co-creation
or co-destruction online. Journal of Services Marketing, 32(1), 57-69.

16MARKETING MANAGEMENT