Supplementary Learning Module for Senior High School Learners

Learning Competency
 explain the value of customers
ABM_PM11-Icd-6

Begin!

Customer now have an overwhelming abundance of choice. They are used to

competition in the market because of the choices it provides. Customers have high
expectations in a certain product and services and spare a little loyalty if
expectations are not met. Today, it is a buyer’s market. This means that companies
must try even harder to establish value in every products and services they offer.
In this lesson, you will learn the meaning of customer value and discover how
consumers use this to make buying decisions. You will also learn why companies
must establish and maintain a high customer values for their products and services.
Your target!
This will be your guide in your journey in this module.
At the end of this module, you should be able to:
 define customer value and its components
Try this!
Direction: Read and analyze each statement and identify what is asked or
described in each item. Encircle the letter of the correct answer.

1. Customer value is ______________.

A. a marketing term which explains how customers weigh benefits against
costs when making buying decisions
B. something that should be considered when making all marketing decisions
C. measured differently by individual consumers when making buying
decisions
D. All of the above
2. Which statement is FALSE regarding customer value?
A. The product or service with highest quality will always have the highest
customer value.
B. Customer value can be increased by lowering the cost of a product or
service.
C. Customer value can be increased by increasing the quality of a product or
service.
D. Customer value is equal to the perceived benefits minus the perceived
costs in the mind of a customer.
3. What does a toothbrush manufacturer can do to increase the customer value
of their toothbrushes?
A. Reduce the price.
B. Add features that will provide benefits to their customers and keep the
price the same.
 C. Improve their customer service until it is the best in the industry.
D. All answers are correct.
4. What is customer value analysis?
A. A research method used to analyze customer purchases
B. An analysis method used to determine how much money a customer will
spend
C. A research method designed to assign value to purchases
D. A research method that is used to identify how an organization is
perceived by consumers of an organization and their competitors
5. The task of any business is to deliver ________ at a profit.
A. customer needs
B. customer value
C. products and services
D. improved quality
6. Customer’s evaluation of the difference between all the benefits and all the
costs of a marketing offer relative to those of competing offers refers to which
of the following options?
A. Customer perceived value
B. Marketing myopia
C. Customer relationship management
D. Customer satisfaction
7. The following statements are the different ways to deliver customer value
except one:
A. Provide the consumer with the best cost
B. Provide the consumer with the best product.
C. Provide the consumer with the best service.
D. Provide the consumer with the best worth.
8. The following statements is true about the steps in creating more costumer
value except one:
A. Create a win-win price.
B. Focus investments on the most valuable customers.
C. Understand value proposition.
D. Reduce benefits then add cost.
9. It is the intangible value offered to customers.
A. Image
B. Service
C. Quality
D. Price
10. Which of these refer to the customers’ perception of how well a company’s
product and services meet expectations?
A. Image
B. Price
C. Quality
D. Service
Do this!

Activity 1.
Directions: Fill in the boxes with your ideas about the word “value”.

VALUE

Explore!
Analyze the conservation and answer the questions below.

Lem: “I drive a BMW. Why? Because I always want the best, that’s important
to me. I usually buy high quality products.”
Jay: “I also drive a BMW, but I don’t really care about the car- I just want to
show my family, friends and neighbors how well I’m doing in life.”
Lorna: Since both of you have a car, let’s have our lunch to Inay Helen’s
Eatery.
Kim: I don’t want to. I like going to McDonald’s. The food isn’t that great, but
you get a lot for your money.”
Lorna: But there’s no free soup there. And yet the food they offer is
inexpensive but delicious and nutritious.
Kim: Fine. Let’s go to Inay Helen’s Eatery. After our lunch, let’s go to the
Ukay-Ukay store. I will buy clothes for my OOTD.
Lem: “I won’t shop at that store. It is much cluttered and too busy. I prefer to
shop at specialist clothing stores. They are quieter, much nicer to be in, and
you can take your time comfortably trying on the clothes.
Jay: Alright! Let’s go. I’m hungry.

1. What does each person consider to be valued?

Lem:
______________________________________________________________
______________________________________________________________
__________
Jay:
______________________________________________________________
 ______________________________________________________________
__________
Lorna:
______________________________________________________________
______________________________________________________________
__________
Kim:
______________________________________________________________
______________________________________________________________
__________
2. Given these range of views of what value is, what are some of the
implications for marketers?
______________________________________________________________
______________________________________________________________
______________________________________________________________
______

Keep this in mind

People make buying decisions every day. In every buying decision, a

consumer asks about the worth they will get and give up in order to get a certain
product or service. The benefits which the consumer will gain is weighed against the
cost of the product the consumer must pay to acquire the benefit.
Customer value is the relationship between the benefits and the costs
including money, stress, and time to sacrifice that is necessary to get those benefits.
It is simply stated in mathematical equation: Benefit – Cost = Customer Value. It is
not simply about high quality. It isn’t about the pricing alone. Consumer value
products and services that are of quality they expect and that are sold at prices they
are able and willing to pay.
Consumers will typically purchase the item with the highest customer value
among all offerings in the market place. When you are deciding where to go for
lunch, for example, do you consider Jollibee to have a higher customer value than
McDonalds? Every consumer has a unique set of needs and resources, so no two
consumers will place the same customer value on the same product or service. The
highest quality product or service does not always provide the highest customer
value, since the benefit of each item is measured against the cost. Some consumers
are willing to pay a high price for a quality product or a high level of service, but
others will make the decision that the same benefits are not worth the price.

Four Components of Customer Value

1. Service
It is the intangible value offered to customers.
2. Quality
 It is the customers’ perception of how well a company’s products and
services meet expectations.
3. Image
Customers’ perception of how well a company or business they interact
with
4. Price
The price a company can command for its products and services and
that its customers are able and willing to pay.
These four components contribute to customers’ perception of what value
really is. It affects their level of dissatisfaction or satisfaction with a product and
services. It must be treated with equal attention and importance in order to establish
and deliver customer value in terms of conferred benefits and customers’ needs,
wants and expectations. Companies should provide the consumer with the best cost,
best product, and best service.
Giving such importance of customer value in marketing, ways on how to
improve it should be taken into consideration by the different companies to grow their
businesses. Here are some:
a. Understand what drives value for customers – In order to capture data
from the customers’ action and to know what the company’s opportunities
should undertake, they must talk and survey to their beloved customers.
b. Understand value proposition – To understand value proposition, a
company must understand first what value their product or service creates for
them and what does it cost them.
c. Identify the customers and segments where the company can create
more value relative to competitors – Different customers have varying
perceptions of value relative to competitors like for example a product
attribute one segment that they may find attractive than the other company
similar product.
d. Create a win – win price – A company should set a price that customers are
receiving value without sacrificing the cost of the product and maximizing the
take of the company. Always remember that a satisfied customer that
perceives a lot of value usually pays more and unsatisfied one leave even at
the lowest cost.
e. Focus investment on the most valuable customer – Allocate investment
where a company can best serve and will provide great value in return.
Investing in a new product will also be a great help to attract more customers.

Apply what you have learned!

Activity 1
Directions: In this activity, identify how each of the following consumers perceives
value.
(For example, value = low price)
 1. “I’m happy to pay $300 for a pair of shoes – because they last for years. I
really can’t understand people who buy a $50 pair of shoes every six months.”
______________________________________________________________
______________________________________________________________
__________
2. “I still shop at the local butchers, rather than going to the big supermarkets.
Sure, it’s a bit more expensive, but the butchers are always friendly, you can
have a laugh, and they even tell you how to cook the meat if you’re not sure
about it.”
______________________________________________________________
______________________________________________________________
__________
3. “I switched my loan from one of the big banks to a credit union. It’s going to
cost me a little bit more, but I know that I can trust them, I’m not sure about
the banks anymore.”
______________________________________________________________
______________________________________________________________
__________
4. “I always bought my family’s clothes from Ukay - Ukay. Why pay more than
that you have to!”
______________________________________________________________
______________________________________________________________
__________
Activity 2
Instructions: Make an acrostic poem to explain value of the customer.
C
U
S
T
O
M
E
R
V
A
L
U
E
Reflect!
Direction: Complete the statement.
After taking this lesson, I have learned
that_________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
__________________As consumer I
will___________________________________________________________
___________________________________________________________________
___________________________________________________________________
____________
Learn more!
Direction: Read the article below and answer the following questions.

Nordstrom Customer Service Tales not Just Legend

By Christian Conte
Nordstrom Inc.’s Customer service is considered legendary, and there are
plenty of tales to back up that up.
During my research of the company I heard a story about a member of the
housekeeping staff at a store in Connecticut who discovered a customer’s bags,
along with her receipt and a flight itinerary, in the parking lot.
Noticing that the customer had likely left directly from the store to catch her
flight at John F. Kennedy International Airport in New York, he looked up her phone
number in the company’s system and tried to call her several times as he drove to
the airport with her bags.
When she didn’t answer her phone after he got to the airport, the employee
had the airport page her to let her know he had her bags. Erik Nordstrom, a
president of stores at Nordstrom, recounted that the tale during the company’s most
recent annual meeting in July.
One of the most well - known Nordstrom customer service stories, however, is
about a man who went into the Nordstrom in Anchorage, Alaska, to return a set of
tires. Nordstrom, an upscale retailer that sells mostly apparel, shoes and
accessories, does not sell tires. The customer bought the tires at the store that
occupied the same space prior to Nordstrom moving in. Still, after some discussion,
the Nordstrom store manager decided to allow the customer to return the tires there.
One of the people who told me the tires story said he really wasn’t sure it was
true, but thought it illustrates the great lengths that Nordstrom employees are willing
to go keep existing customers happy and forge relationships with new customer.
 Nordstrom spokesman Colin Johnson said both stories are true, and are
examples of how the company gives employees the autonomy to make their own
decisions instead of having to send questions up the ubiquitous corporate flagpole.
Forester Research Inc. Principal Analyst Kate Leggett said the company’s
legendary customer service efforts are much more than tales – they really boil down
to a great business strategy.
“They really treat it as a way to influence the top line, “Leggett said of the
company. “It helps with the repurchase rates and recommendations.”
Questions:
1. In these stories about Nordstrom Inc., what could be the benefits for the
company that the staff have in mind? Discuss.
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
_________________________
2. How will you relate customer value out of these stories mentioned? Explained.
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
____________________
3. If you are the staff who returned the baggage to the customer in the airport or
the store manager who allows a customer to return the tire that is not even
sold in the store, will you apply the same principle of customer value? Why?
Why not? Defend your answer.
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
____________________
Assess what you have learned!
Directions: Identify what is asked or described in each item. Encircle the letter of the
correct answer.

1. How do you simplify customer value in mathematical equation?

A. Cost – Benefits = Customer Value
B. Cost + Benefits = Customer Value
C. Benefits – Cost = Customer Value
D. Benefits + Cost = Customer Value
2. Which statement is TRUE about customer value?
 A. The product or service with highest quality will always have the highest
customer value.
B. Customer value can be increased by making the cost of a product or service
higher.
C. Customer value can be increased by increasing the quality of a product or
service while sacrificing the production cost.
D. Customer value is equal to the perceived benefits minus the perceived costs
in the mind of a customer.
3. Which of the following term refers to customer’s perception of how well a
company’s products and services meet expectations.
A. Image
B. Price
C. Quality
D. Service
4. Customer value leads to customer’s ________________.
A. Competition
B. Convenience
C. Desire
D. Satisfaction
5. What do you called to the perception of what a product or service is worth to a
customer versus the possible alternatives?
A. Customers’ worth
B. Customers’ satisfaction
C. Consumer dissatisfaction
D. Customer value

Glossary
The following terms used in this module are defined as follows:
Consumer – other term for customer who purchases good and services for personal
use
Customer satisfaction – a measure of how well consumer expectations from a
purchased product or service have been met
Investment – allocating resources usually money to generate income
Price – amount given to a certain product or service which is to be paid
Product – anything that is manufactured for sale and offered for consumer use
Quality – degree of excellence or the standard characteristics of something
measured against the other similar product
Service – the intangible value offered to consumer which can satisfy their needs and
wants
Value – means the worth, importance and usefulness of something.

Answer Key
Try this!
 1. D
2. A
3. D
4. D
5. B
6. D
7. D
8. D
9. B
10. C
Asses what you have learned!
1. C
2. D
3. C
4. D
5. D

References
https://customerthink.com/what-is-customer-value-and-how-can-you-create
it/#:~:text=Customer%20Value%20is%20the%20perception,Cost%20(CV%3DB
%2DC).
http://www.greatideasforteachingmarketing.com/what -is-customer-value/
https://www.greatideasforteachingmarketing.com/understanding-customer-
satisfaction/
Camilar-Serrano, Angelita Ong, Principles of Marketing, Unlimited Books Library
Services & Publishing, Inc., 2016