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Unit 2: Customer Value

Notes
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Caselet A Consumer Insight Success: Nigerian TV

igerian TV was developed by LG Electronics Africa Logistic FZE (LGEAF) to
support the On-screen Display (OSD) of the country’s three major languages
N(Ibo, Yoruba, and Hausa). Released in May 2008, Nigerian TV sparked an explosive
response from local consumers by improving on previous TVs, which until then had only
supported English text. Other features, such as the CRT TV rotating stand (especially
useful for larger families) and higher volume range for loud surroundings, were also
included to reflect the unique conditions of the local environment based on newly identified
consumer in-sights. LG Electronics has positioned itself as the runaway market leader in
Nigeria—over 50% of market share in big ticket items such as air conditioners, refrigerators,
and TVs—thanks to active such as air conditioners, refrigerators, and TVs—than marketing
efforts that truly reflect consumer insights.

Self Assessment

Fill in the blanks:
6. Product quality, service quality, price, and image shape a customer’s perception of
…………………….
7. The growth matrix of the customer value includes …………………… combinations.
8. The first combination of customer value growth matrix is …………………….

9. The last combination of customer value growth matrix is …………………….
10. We define …………………… as the perceived worth in monetary units of the set of
economic, technical, service and social benefits received by a customer firm in exchange
for the price paid for a product offering.

2.3 Value Creation

Value creation is performing activities that increase the value of goods or services to consumers.
Spend enough time in the business world and you will hear the words “value added” or “value
creation” thrown around. Everyone tells you they can “add value” or that they want to “create
value.” But what is value? How is value created?
For a high growth company, profits are traded off for growth and market share. But this trade off
still occurs with an eye towards the future when at some point value creation will kick in. As
Mark Suster says, “This is the trade-off between profits & growth. You can drive profits up by not
investing today’s dollars in tomorrow’s growth.”
And why then are there companies that get acquired for their teams or their technology or other
“strategic” purposes and not for their profits? In these cases, the acquiring company expects to
acquire resources which will add value to their own organization (some companies are better
than others at acquiring other companies.)
Real value creation is not easy. The world is overall fairly efficient at pricing goods and services.
Competition in most places/industries is high. In the end, you must take input resources (i.e.
labour, capital, goods, and services) and produce an output with a total cost that is lower than the

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