Understanding Value in Business Markets.

By: Sushant Ahuja

190103155
IMT Ghaziabad

Value in business markets is stated as , in monetary terms of the technical,

economic, service, and social benefits a customer or a company receives in
exchange for the price it pays for a market offering/product or services.
We should regard value in business markets as a construct, similar to market
share. Because it is a construct, in practice, we can only estimate value, just as
we can only estimate market share.
Customers—especially those whose costs are driven by what they purchase—
increasingly look to purchasing as a way to increase profits and therefore pressure
suppliers to reduce prices. For a customer to buy a product, he or she needs to
perceive only that the value exceeds the price, but not necessarily by how much.
This lack of understanding requires business market managers to further
develop the ability to be customer- or market-oriented in business markets.
Most business market managers now understand that their firms need to
translate features to benefits for their present and prospective customers.These
managers need to go beyond this and further elaborate the benefits to the
customer in his own setting
Since many customers, understand their own requirements but do not necessarily
know what fulfilling those requirements is worth to them. To suppliers, this lack
of understanding is an opportunity to demonstrate persuasively the value of what
they provide and to help customers make smarter purchasing decisions.
Customer Value Proposition

Suppliers use value proposition into three types:

1)All Benefits – enlisting all the benefits ,they believe might deliver to the target
consumers.
2)Favourable Points of Difference – It emphasises the points of difference of an
offering that provide greater value to the target customer, it can often lead to
pitfall of value presumption

3)Resonance Focus – In this proposition, Suppliers can provide such a customer

value proposition by making their offerings superior on the few elements that
matter most to target customers, demonstrating and documenting the value of
this superior performance, and communicating it in a way that conveys a
sophisticated understanding of the customer’s business priorities.

Sustaining Customer Relationships. 

At the core of all successful working relationships are two essential

characteristics: trust and commitment. To demonstrate their trustworthiness and
commitment to customers, progressive suppliers periodically provide evidence to
customers of their accomplishments. 

Value-assessing Methods
We first discuss a number of methods that firms in business markets have used to
assess value. We then present customer value management, which is a
comprehensive, practical approach for demonstrating and documenting the value
of present and prospective market offerings in business markets

Customer value management is a progressive, practical approach that, in its

essence, has two basic goals:

• Deliver superior value to targeted market segments and customer firms.

• Get an equitable return on the value delivered.

Gaining knowledge of how well the supplier firm has met its customers’
requirements and preferences is a crucial facet of market sensing. Gaining
customer feedback tells the firm how well it has fulfilled its promises to customers
and provides the supplier with a chance to remedy problems and retain a
customer.
Two measure undertaken for the purpose are:
1)customer satisfaction measurement.
2)customer value analysis.
Lastly consideration of the customer feedback measure – Net Promoter Score
which pose as an ultimate question for the promoters.