Article Analysis Essay on Customer Value Propositions in Business Markets

Introduction

The article, Customer Value Propositions in Business Markets by Anderson et al. offers a clear exposition of the significance of differentiating one's company offering with the competition, while at the same time focusing on the benefits that are important or appropriate to specific customers. Broadly, the authors proceed to provide a discussion of various kinds of value propositions that have been implemented and put in practice and suggest mechanisms of developing an appropriate value proposition. In the article, the authors recognize that fact that the value proposition has become an increasingly and widely utilized term in the business markets. Anderson et al. recognises that a customer value proposition requires a a clear vision for change and consistent communication. A strong performance resulting from proper management practice is crucial. Having a well-structured customer value proposition provides a business with an excellent moment of truth.

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Problem Definition

Regarding defining the problem, Anderson et al. mention that customer are increasingly under pressure to lower the cost and do not own the luxury of necessarily having to believe the assertions of the suppliers. In this case, the sales forces need to create a justifier regarding the needs of the customers. In this way, they should strive towards helping the customers develop a better understanding and make them believe in the customer value propositions. Anderson et al. recognize that the suppliers that are not able to provide this in most cases revert to the price concessions. These are usually expensive, and may not beneficial to the suppliers. To have a better understanding of the elements that constitute a customer value proposition, as well as what makes it convincing to the customer. As a result, the article describes a systematic method for the development of the value propositions that are critical to the target customers and focus on the efforts of the suppliers in establishing the superior value. As such, the authors identify three kinds of value propositions. These include that are focused on benefiting all people and players within the market, those that demonstrate favorable points of difference, and those that resonate the focus.

Substantiating Customer Value Propositions

In the article, the authors mention that substantiating the customer value propositions is a critical process and step that market players need to embrace. Ideally, many suppliers provide astounding value propositions but are unable to obtain the appropriate people, processes, tools, and the experiences that are needed to support their claims. In this way, the majority of the customers have been cautious and have gone ahead to dismiss the value propositions as marketing trickery. It is essential for the suppliers to demonstrate and document the customer value propositions to convince the customers. In the view of Anderson et al. this can be achieved through different mechanisms. For example, using the value word equation in words and mathematical operators to examine the variation in the performance between an offering and the next best alternative. Fundamentally, the information required for the customer's business operations through coordination and unity collaboration between the customer managers and the suppliers or from the external sources.

As part of achieving the required customer propositions in the business markets, business people must be able to demonstrate customer value in advance. Notably, the prospective customers must be able to observe the cost savings or the added value they can expect from choosing a supplier's offering over the available options or alternatives. To effectively demonstrate this, the best value suppliers often utilize value case histories or calculators. Ideally, the value case history documents show the cost savings or the additional value that the reference customers gained from the offering of their suppliers. On the other hand, the value calculator implies to the customer value assessments tools utilized by the salespeople with to offer a demonstration of the value that potential customers could receive as a result of using the supplier's offering.

A close look at Anderson's article would reveal that the author suggests that documentation of the customer's value is critical. This broadly does not only involves demonstrating value to potential customers but also document the cost savings as well as the incremental profits within the organizations or firms that have bought such provisions. According to Anderson, the utilization of value documenters enhances the refining of the customer models and establishes value case histories. It further promotes the credibility on the part of the suppliers and gives the customer managers the opportunity of being able to receive credits. The documentation of the value provided to customers enables the suppliers to gain the knowledge, experience, and confidence about how their offering deliver superior value to customers.

The discussion about the establishment of the superior business performance forms an integral component of the article. According to the authors, a properly established and delivered customer value propositions can significantly contribute to an improved business strategy and performance. It is important to note that there exist several businesses with already established value propositions, and which form fundamental parts of their organizational strategies. As a matter of example, the authors provide an example of Sonoco, a global packaging supplier whose value proposition is tremendously distinct, sustainable, and measurable. As a result of this implementation, the company was able to track the relationship that exists between business unit value and the performance of a business unit.

Personal View

In my view, the customer value proposition can constitute an essential cornerstone for high and robust business performance. It is emphatically the function as well as the responsibility of the marketing teams as well as the senior management. For an excellent value proposition, it is essential for the suppliers to realize that the establishment of a value proposition in addition to substantiating it is never a single process but a continuous one. They are obliged to ensure that their people have an understanding of the propositions that follow. Performing a research on the customer value is crucial because it helps to provide tremendous but straightforward insights regarding the customer propositions that can be implemented by the organizations to communicate the superior value they have to the markets and segments that are targeted.

Additionally, I believe that how the businesses articulate their profit value constitute indicators of business growth. Notably, it influences the success within a rapidly changing market. Despite its importance, the majority of the business leaders and their teams have not been able to contextualize the customer value. This is based on the fact that a majority of them find a challenge when it comes to developing a proper customer value proposition example. Many companies across in the U.S and across the world have been, however, able to achieve the customer value propositions. One of these company is Walmart. To accomplish its value proposition, Walmart excels in its values through the creation of efficient supply chain management and product movement from its suppliers to the buyers in a tremendously timely manner. This move guarantees various benefits such as low prices and ultimate consumer satisfaction. The company's competitive prices and product range has enhanced the achievement of a tremendous value proposition.

With the company offerings its products at reduced prices, often giving discounts and deals to its clients, the customers have been able to develop loyalty and satisfaction. Other strategies that have been used by the company include the multi-channel sales network, the enhancement of the accessibility and flexibility in terms of distribution and supplies, and the domestic and internal reach. This implies that operations of a variety of sales channels that include the flagship Walmart stores as well as Sam's club network, the company has been able to develop a compelling value proposition, due to distinct purchasing options.

A customer value proposition needs a clear vision for change and consistent communication. A strong performance resulting from proper management practice is crucial. Having a well-structured customer value proposition provides a business with an excellent moment of truth. This is a time when customers can develop a significant satisfaction and loyalty to the offerings of the suppliers and business due to an already established understanding of the offerings. Companies must, therefore, strive towards saving on the cost to increase the efficiency through the implementation of the employee achievement programs as well as upgrading the break rooms to motivate all employees to help customers and stock shelves faster during the work process.