Maximizing Customer Value Through Knowledge Innovation

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Maximizing Customer Value Through Knowledge
Innovation

• Dr. Bob Wu
• Bowling Green State University
• June 30, 2005

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Conceptual Framework

• Total delivered value (total values, total
  cost)
• Value (benefits, sacrifices)
• Laddering Perspective attributes ? consequences
  (benefits) ? values

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Conceptual Framework

• Satisfaction (delivered values, expectation)
• Loyalty (satisfaction)

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Types

• Values
• Functional (problem solving, quality,
  reliability)
• Experiential (novelty, sensation, variety)
• Symbolic (social image)
• Costs
• Monetary
• Time
• Physical effort (energy)
• Psychic

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Types Issues

• Search, experience, credential goods
• Before or after purchase/consumption
• Relative weights
• Functional form
• Pennies-a-day effect
• Webers law (?I / I ) K

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Types Issues

• Prospect Theory
• Loss avoidance
• Diminishing returns
• Reference dependent
• Price sensitivity
• Substitute effect
• Third party effect
• Income effect
• Opportunity cost

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Types Issues

• Experts versus novices
• Surrogate measures
• More is better
• Peripheral cues
• Authority
• Value judgment
• Recency effect
• Large number effect

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Types Issues

• Evaluation depends on needs
• Hunger ? everything taste good
• Full ? not worth it
• High context versus low context
• High price ? main item versus low price ? main
  item

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Sources

• Product/service versus experience
• Role buyer payer user
• Need recognition ? information search ?
  evaluation of alternatives ? purchase ?
  consumption
• Issues multiplicative versus additive
• level of involvement
• attraction effect
• 4 Ps people, process, physical evidence

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Knowledge

• Sources of competitive advantage
• Data versus information versus knowledge
• Types of knowledge
• Codified (explicit) versus non-codified
• What, why, who, how
• Model 1 (traditional academic disciplines)
• Model 2 (interdisciplinary, transdisciplinary)

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Knowledge

• Stages of focus
• Efficiency of production and delivery of existing
  services
• Quality of the service
• Applications of new technology

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Knowledge Innovation Versus Customer Values
Examples

• Need recognition
• Data mining
• Inventory monitoring system
• Electronic data exchange
• Service reminder
• Behavioral tracking system

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Knowledge Innovation Versus Customer Values
Examples

• Information Search
• Buying criteria
• Google
• Cell phone
• Vendor information
• Performance ratings
• Database management

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Knowledge Innovation Versus Customer Values
Examples

• Evaluation of alternatives
• User feedback (epinions.com, Consumer Reports,
  Amazon.com ratings)
• Mass customization
• Purchase
• Auction (eBay, priceline.com)
• Consumption
• Diagnostic
• Usage instruction