Consumer originated value: A framework for performance analysis

Abstract

While the marketing concept provides the strategic motivation that continues to turn American business towards the marketplace, little attempt has been made to create a metric that is specifically intended to reflect the role and importance of the consumer on improved organizational performance, especially when evaluating intangibles as services and intellectual contribution. Traditionally, productivity measures have been used to evaluate performance improvement that are internally originated and not externally oriented, as suggested by the marketing concept. Therefore, productivity measurement generally fails to measure the customer/consumer originated value developed by service processes and does not account for performance improvement due to other highly intangible factors such as quality or difficult to quantify consumer benefits. Herein, customer/consumer originated value is explored as a basis for organization wide performance measurement that is synchronous with the market driven directive: customer focus. The authors present a theoretical framework that develops and supports the use of value based performance measures.