Creating Superior Value in the Eyes of the Customer: An Analysis of the Two Generic Value Drivers and Value Paths

Abstract

Despite the considerable body of work on customer value, the literature remains highly fragmented and thus surprisingly silent on two elementary questions: (1) whether a firm should focus more strongly on the product core (a product’s basic elements) or the product surrounding (a product’s additional elements) and (2) whether a firm should focus on the cognitive path (a product’s actual value) or the intuitive path (the signaling of efforts to create a product of high value). Given the large investments required for customer value creation and firms’ increased need for cost control, the answers to these questions are especially important, as they would help managers avoid misallocation of human and financial resources and would offer valuable insights into how communication and sales activities can best support a customer value strategy. On the basis of an integrative framework and a dyadic dataset, this paper finds that the answers to these questions depend significantly on the specific product context (the type of product, extent of product commoditization, and product involvement). For example, services firms may concentrate more strongly on the product core and should particularly focus on the intuitive path. By contrast, manufacturing firms should rely more heavily on the product surrounding and may focus almost equally on the cognitive path and the intuitive path.