Analysis of Customer Value and Value Proposition in Marketing Management

The report analyzes the customer value and value proposition in marketing management, focusing on the financial growth of organizations. It discusses the value provided by a local supermarket and provides recommendations for increasing revenue and customer value.

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

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Executive Summary
The report is based on the analysis of the customer value that is provided by organizations
and value propositions that have been formed as well. The importance of customer value and
value proposition for improving the financial growth of the organization has also been
analysed in the report. The value that is provided to an individual by a local supermarket is
discussed in detail. A particular segment of customers has also been analysed and discussed
in the report. The website of the organization has also been analysed in a critical manner. The
recommendations have been provided based on improvement of the levels of revenues of the
organization along with increasing the value provided to customers.

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Table of Contents
Introduction....................................................................................................................3
Customer value...............................................................................................................3
Value proposition...........................................................................................................4
Explanation of why the concepts are critical to a firm’s financial success....................5
Ways by which UK supermarkets deliver value............................................................6
Ways by which supermarket delivers value to me.........................................................7
One customer segment at my supermarket and the value it seeks.................................8
Ways by which value is communicated via my supermarket’s website........................9
Recommendations........................................................................................................10
References....................................................................................................................11

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Introduction
The report will be based on the analysis of value that is provided by different
organizations to the customers. The effect of proper customer value on the organizational
operations is an important part of the analysis that will be made in the report. The value
proposition that has been developed by the organization in order to attract the customers will
also be discussed in detail. A supermarket has been considered for the purpose of customer
value based analysis that will be made in the report. The organization that has been chosen
for analysis in this case is Tesco.
Tesco PLC that trades as Tesco is a multinational general merchandise and grocery
based retailer that has its operations in the United Kingdom. The services that are provided to
me by Tesco PLC will be an important part of the analysis. The value of these services will
also be analysed in detail based on the operations of Tesco PLC (Tesco.com., 2019).
The report will first provide the explanations based on customer value and value
proposition and their role in the financial success of the firm. The other part of the report will
be related to the value that is delivered by Tesco to me and the ways by which it aims at
providing the value. Recommendation will also be provided based on changes that can be
made in the value providing methods implemented by the organization (Cepeda-Carrion et
al., 2017).
Customer value
As discussed by Chandler and Lusch (2015), customer value can be defined as the
incremental benefits that are derived by the customers from the consumption of a product
after the payment has been made. Value mainly signifies different benefits that are gained by
the customers from the products. The difference that exists between the costs and benefits is
the value that is offered to the customers. The three major factors that have an impact on

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customer value include, service, price and quality. The three factors together are able to form
a “customer value triad” (Hassan, 2012).
As opined by Covin et al., (2015), the value based on a product can thereby increase
with the services and quality and the increase in levels of benefits that are provided as well.
The value of a product is decreased with the increase in prices of the products and the
increase in levels of costs as well (Eggert et al., 2018). The different parameters that are
considered to be an important part of value provided by the customers include, cost, service,
quality, marketing, past experience and social influence. Customer value can be determined
in two major ways that include, desired value and perceived value. Desired value is the value
that is received by the customer and perceived value is based on the costs that are required to
develop the services. The perceived value is considered to be a part of the tangible benefits
that are received by the consumers based on costs (Degbey, 2015).
Value proposition
According to Grönroos, C. (2017), value proposition mainly refers to value that the
company is able to promise to deliver to the consumers if they choose the products and
services offered by the particular organizations. The value proposition of an organization is
also considered to be the declaration based on the intent or the statement that is able to brand
of an organization to the consumers by providing them information based on the stand of the
company. The marketing or business based statement can be presented as the value
proposition of an organization that can be used in order to buy a particular product or service
(Hassan, 2012).
As discussed by Grover et al. (2018), the value proposition of an organization has the
ability to compel the customers to purchase the products that are offered to them. A company
thereby needs to develop the value proposition in an effective manner in order to maintain the

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operations of the company and to develop an image in the industry as well. The value that is
perceived and provided to the customers is also made clear with the help of proper value
proposition based system (Kim et al., 2015). The ways by which the products or services
offered by the organization are able to fulfil the needs and demands of the customers are also
communicated with the help of an effective value proposition statement. The statement is
used by the organization in order to target the customers who can the highest levels of
benefits from the products that are provided by them (Marbach, Lages & Nunan, 2016).
Explanation of why the concepts are critical to a firm’s financial success
As discussed by Payne, Frow and Eggert (2017), communication the value to
customers and proper establishment of the customer value is considered to be important for
the organizations in order to achieve the results that are related to the development of proper
levels value. The number of customers in the organization can be increased which further
leads to the increase in revenue levels. The perception of consumers is mainly based on the
ways by which the value provided by organizations is able to satisfy them. The perceptions of
customers are able to play a major role in the ways by which the organization is able to
operate and create effective value for the customers as well (Ramaswami & Arunachalam,
2016).
According to Ranjan and Read (2016), the levels of customer engagement are also
increased with the help of effective customer engagement based activities that are performed
by the organizations. Customer value is considered to be helpful for the development of
differentiation by an organization in the industry. The company will be able to maintain its
operations in the long term with the help of value that is provided to them. The needs and
demands of the consumers are effectively aligned with the value that is provided by the

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company (Rintamäki & Kirves, 2017). This is able to increase the revenue levels of the
organization and profitability in the industry as well.
The sales people need to develop the services in such a manner that can increase the
value of the customers. The value provided to customers will be able to affect the ways by
which organizations are able to maintain them in the customer base for a longer period of
time. The loyalty of customers is increased with the help of proper value that is provided to
them (Sheehan & Bruni-Bossio, 2015).
As discussed by Skålén et al. (2015), the growth of an organization is based on the
value proposition that has been developed based on different aspects of the business. Value
proposition has the power to grab the attention of customers and provide them with effective
benefits as well. The development of a proper value proposition is considered to be a major
task that is performed by the organizations. Value proposition is able to develop
differentiation between the particular organization and its competitors in the industry. The
company is able to gain a greater share in the market with the help of an effective value
proposition that is developed (Terho et al., 2015).
The enhancement of different types of tools will also be a major part of the
effectiveness of the business operations. The financial success of an organization can be
improved with the help of communication that is made with the help of proper value
proposition. The operational efficiency of an organization is increased with the support that is
provided by the value proposition and communication of different types of aspects as well.
The value proposition is able to provide a major explanation based on the ways by which the
organization is able to offer the required products and services to the customers (Töytäri &
Rajala, 2015).

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Ways by which UK supermarkets deliver value
The retail industry of the United Kingdom is based on the successful operations of
different large supermarkets or multinational organizations that include, Waitrose, Asda,
Sainsbury’s, Morrisons, Ocado and Tesco. The levels of competition in the industry are high
and the supermarkets aim at delivering high levels of value to the customers in order to
maintain the competitive advantage. The online shopping and home delivery based options
that are provided to the customers are important factors that add to the differentiation based
activities that are performed in the industry (Theguardian.com., 2019). The organizations
have aimed at implementing different types pf delivery based options on order to attract the
customers towards convenient methods of shopping. The levels of convenience that are
offered to the customers are considered to be important for the development of proper
advantage in the market. The “mySupermarket” named app that has been developed in the
industry provides opportunities to the organization based on the ways by which they are able
to take advantage of different offers that are provided to them (Theguardian.com., 2019). The
savings of customers can be increased with the help of services which are provided with the
help of its offers. The organizations have provided all offer “delivery passes” that are charged
between 60 Euros to 110 Euros on an annual basis. The annual charges will be able to
provide major opportunities to the customers in order to purchase the desired products in a
convenient manner (Theguardian.com., 2019).
Ways by which supermarket delivers value to me
As a customer of Coles the value that is offered to the customers is based on the
personalised services offered by the organization. The retail industry of the Australia is
highly competitive in nature and is able to provide opportunities to the customers based on
the ways by which different types of products can be purchased. The proper development and
effective maintenance of the long term based relationships that have been formed by the

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organization with the consumers are helpful in achieving customer value. The organizations
need to develop different types of strategies in order to address the issues and concerns of the
customers (Yang et al., 2017).
The development of customer value is considered to be highly important for an
organization like Coles. The formation of competitive advantage is considered to be highly
important for the organization. The excellent services that are offered by Coles are able to
satisfy the customers and also meet the strategic intentions of the company that have been set
at the start of its operations in the industry. The organization has always considered the
customers to be at the heart of the business operations (Töytäri & Rajala, 2015).
The value is provided to the customers with the help of proper reduction of manual
labour that is required for picking up the groceries. The customers are able to find the items
offered by Coles with the help of its e-commerce based services. The internet shopping
related activities that have been performed by the organization are important for the ways by
which Coles is able to create high levels of value for the customers (Hassan, 2012).
Coles has aimed at providing value to the customers by offering them with lower
prices in comparison to the other organizations like Woolworths. On the other hand, Tesco
differentiates itself in offering value with the help of experience that is provided to customers
in the stores (Töytäri & Rajala, 2015).
One customer segment at my supermarket and the value it seeks
The process of market segmentation is considered to be a major process that is
implemented in order to develop value for different segments of customers. The customers
who share similar types of needs are included in the similar groups. The feedback that is
gained by the organization from customers is also considered to be important for the ways by

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which different services can be developed. The major customer segment of Coles that can be
considered for providing effective value are the online shoppers (Töytäri & Rajala, 2015).
The rise of e-commerce is considered to be an important factor that is able to affect
the development of an effective customer base of the organization. The company has already
provided major levels of value to the online customers with the help of effective services and
products. Coles can however improve the levels of value that are offered to customers with
the help of its operations in the retail industry of the Australia (Hassan, 2012). The
differentiation of Coles from its major competitors is possible with the proper implementation
of different strategies that are implemented in the organization (Yang et al., 2017).
The accessibility levels of the services of Coles have been increased with the help of
proper segmentation of different customer groups in the industry. The customers in this case
seek high levels of value in the retail market in order to improve the products that are
developed. Coles has provided loyalty Card to the customers in order to provide them
exclusive discounts and offers. The loyalty Card program is considered to be an important
factor that has a major impact on the customer satisfaction levels of the organization
(Sheehan & Bruni-Bossio, 2015).
Ways by which value is communicated via my supermarket’s website
The website of Coles is highly interactive in nature and is able to communicate
effectively with the customers based on the services and products that are offered. The social
media based platforms are also considered to be an important part of the communication
process that has been formed by the organization. The different segments of customers are
provided with effective information based on the ways by which the performance levels can
be improved in the industry (Coles.com., 2019).

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The online customers of Coles are mainly a part of the young group of people who
prefer to shop from the internet based stores in a convenient manner in comparison to the
physical stores of the organization. The social media platforms that are a part of the website
are helpful in development of proper communication with the customers. The customers will
be able to communicate with the organization and provide their feedback effectively with the
help of the website of Coles. The database and information of the customers are also gained
by Coles with the help of its website (Sheehan & Bruni-Bossio, 2015). Coles PLC has been
successful in delivering the value to customers in an effective manner through its interactive
website that is able to showcase different products that can be provided to the customers
(Rintamäki & Kirves, 2017).
Recommendations
The major recommendations that can be provided to Tesco PLC in order to improve
the value that is provided to the customers are,
 The organization can provide training to the employees based on the
relationships that have been developed with the customers. Employees will be
able to contribute a lot in the services that are designed by the organization
and products that are a part of the portfolio as well.
 The store employees of Tesco will also be trained in order to improve the
experience that is offered by the organization to its customers.
 Tesco has already targeted the online customers with the help of its services.
On the other hand, the offline or store based customers can be targeted with
the help of implementation of automation in different organizational
operations. The automation based activities are able to play a major role in the
ways by which the store based customers can save time that is required for the

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completion of shopping. This will help the organization to target the offline
customers as well.

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References
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(2017). Critical processes of knowledge management: An approach toward the
creation of customer value. European Research on Management and Business
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Chandler, J. D., & Lusch, R. F. (2015). Service systems: a broadened framework and research
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Degbey, W. Y. (2015). Customer retention: A source of value for serial acquirers. Industrial
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Grover, V., Chiang, R. H., Liang, T. P., & Zhang, D. (2018). Creating strategic business
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Kim, J., Kim, K. H., Garrett, T. C., & Jung, H. (2015). The contributions of firm
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