fundamental value equation

Examples of fundamental value equation in the following topics:

• Measuring Vendor Performance

  • Performing a value analysis (an evaluation of each component of a potential purchase).
  • Supply managers evaluate suppliers utilizing the tools of value assessment and the fundamental value equation.
  • In this way, supply managers can better focus or redirect the efforts of the entire supply network toward the delivery of superior value to end-users.

• Defining the Vision

  • An organizational vision should be made up of two fundamental components: a core ideology and an envisioned future.
  • It is simple and idealistic, appealing to core values.
  • These can be personal core values or a company's core values.
  • The core ideology is made up of core values and a core purpose.
  • These are the guiding principles and tenets of the organization and its most fundamental reason for being.

• B2B vs. Consumer Marketing: Similarities and Differences

  • Marketing to a business and marketing to an individual are similar in terms of the fundamental principles of marketing.
  • Both B2C and B2B marketing objectives reflect the fundamental principles of the marketing mix, and in both situations, the marketer must always:
  • Communicate and sell products or services so that they effectively demonstrate value to the target market

• Measuring the Market

  • Customer value models are tools used primarily in B2B markets where the choice of a given product, service, or offering is based primarily upon the amount of customer value created.
  • Customer value is defined by the following formula; Value = Benefits - Price.
  • B2B organizations also use another measuring model, called a customer lifetime value model, that seeks to quantify the value of a customer to its suppliers.
  • The real value this type of results measurement is in tying the marketing campaign into the business results.
  • Define the "customer value model" and its role in measuring market demand

• Business Analysis

  • Sales volumes must also be estimated based on the size of the market (using, for instance, the Fourt-Woodlock equation).
  • Customers base buying decisions on a personal value equation where the value is calculated by weighing the cost versus the benefits.

• Quality

  • Consumers place a value on quality; therefore high quality products may be able to win share and/or command a price premium.
  • Managing quality is fundamental to any activity, particularly in the design and manufacturing of consumer and industrial goods.

• Creating a Marketing Mix

  • Value is created by increasing benefits to the customers.
  • For this reason, "benefits" is specified in the numerator of this equation (the higher the benefits, the higher the perceived value by the customer).
  • On the other hand, "price" is placed in the denominator since the higher the price the lower the perceived value.
  • Now you must understand how value is created for your customers.
  • So now you know how value is created for your customer.

• Services as Solutions

  • While "what's the value proposition?
  • " is an over-used term, below is a more specific definition of value, particularly as it applies to application software (in contrast with infrastructure software).
  • This only happens if the software and the services provide real value to an organization.
  • The fundamental principle here is value.
  • No customer will renew a subscription service or buy more consulting services if they don't see genuine value in these services as it relates to fulfilling their business objectives, whether that be better customer service, better IT responsiveness, or better IT management.

• Social Responsibility and Welfare of Customers

  • Critics argue that corporate social responsibility (CSR) distracts from the fundamental economic role of businesses.
  • Marketing organizations communicate these values by developing campaigns and programs designed to influence behavior that improves both the consumer's personal welfare and that of society.

• Shopping Products

  • These products are usually of low unit value, are highly standardized, and are frequently nationally advertised.
  • Shoppers are willing to go to some lengths to compare quality by setting an criteria to judge the product's specifications, usage, price, and value.
  • The differentiation could be equated with a strong brand name, such as Sears Roebuck or Marshall Field, effective merchandising, aggressive personal selling, or the availability of credit.
  • Discounting, or promotional price-cutting, is a characteristic of many shopping goods because of retailers' desire to provide attractive shopping values.