Chapter Four The Customer Experience and Value Creation

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-2 The Customer Experience and Value Creation The total customer experience Mass collaboration Life-cycle cost and customer value Price performance, perceived benefits, emotional benefits, transactional costs and value creation Identifying value drivers

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-3 The Total Customer Experience Purchase Experiences Information Gathering Prioritizing Needs Understanding Alternatives Order Placement and Payment Usage Experiences Delivery & Installation Product Usage Product Maintenance Product Repair Replacement Experiences Product Upgrades Returns and Warranty Product Replacement Product Disposal

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-4 Leveraging Lead User Experiences Lead Users New Benefits Customer Experience Product Development

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-5 Reverse Innovation Figure 4-7 Reverse Innovation – Invent to Order

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-6 Mass Collaboration and Value Creation Figure 4-9 Mass Collaboration and Value Creation

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-7 Defining Life-Cycle Cost Life-Cycle Cost = Price + Acquiring + Ownership + Disposal Paid Cost Cost Cost Economic Value = Competing Product’s – Our Product’s Life-Cycle Cost Life-Cycle Cost

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-8 Life-Cycle Cost and Economic Value Figure 4-10 Life-Cycle Cost and Economic Value

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-9 Sources of Economic Benefit and Value Creation Figure 4-11 Sources of Economic Benefit and Value Creation

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-10 Customer Value and Relative Performance Customer Value = Relative Performance – Relative Price Figure 4-17 Price-Performance Value Map

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-11 Perceived Benefits and Value Creation Types of Perceived Benefits –Product Benefits –Service Benefits –Brand/Company Benefits

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-12 Value Of Perceived Benefits Figure 4-23 Customer Value and Value Map

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-13 Transaction Costs and Value Creation What are channel intermediaries? How do they create value? –Use of space –Inventory turnover –M&s expenses Quantifying space value and transaction value Manufacturer Products Services Intermediary Manufacturer Benefits Costs

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-14 Conjoint Analysis and Value Drivers Figure 4-28 Alternative Flooring Systems

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-15 Conjoint Analysis and Value Drivers Figure 4-29 Preference Curves for Flooring System Attributes

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-16 Value Drivers and Positioning Figure 4-30 Customer Preferences and Customer Value

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-17 Review The total customer experience Mass collaboration Life-cycle cost and customer value Price performance, perceived benefits, emotional benefits, transactional costs, and value creation Identifying value drivers

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-18 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2009 Pearson Education, Inc. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall