Aalto University School of Business

23C570 Business-to-Business Marketing

Reflection Paper I: Customer value, Pricing
Jonas Mikael Krieger - 412876

25.10.2013

Customer Value Propositions and Pricing

Customer value represents a business customers overall assessment of the utility of a
relationship with a supplier. Price is one of the costs that buyers face when considering the
value of competing offers. Customer value is the value that the customer gets. Due to risks
of under- and overestimation, especially buyers need to assess the value offered to them.
The article by Anderson, Narus and v. Rossum (2006) deals with exactly this value. What I
found most interesting, is the fact that the article states that value proposition is only an
advertising trick. Furthermore, there are three different kinds of value propositions.
According to the article, suppliers use the term value proposition in the following types: all
benefits, favorable points of difference, and resonating focus.
Often managers tend to think that listing all the benefits their offering provides is the best
way of having an effective value proposition. However, the risk of claiming benefits that
actually are not real should still be considered.
Another argumentation is based on recognizing that the customer has an alternative, i.e.
why should the customer prefer your offer.
What was really clearly pointed out in the article, was the resonating focus: Managers
have levels of responsibility and time pressure, and thus making offerings superior
matters most.
Despite the study conducted, what I was missing a bit was an even clearer structure
especially with regard to the assumptions and their derivations.
According to Lancioni, pricing is often overlooked in companies from the industry sector,
because accurate information is missing. As far as I am concerned, strategic planning is
not only important in means of eliminating too quickly made decisions, but also because of
developing a pricing plan is crucial for marketing planning in general. A good pricing plan
should include the right pricing mindset.
As losing customers is very costly for companies, managing customer relationships
(product-driven or customer-driven) is of crucial importance.

Aalto University School of Business

23C570 Business-to-Business Marketing
Reflection Paper I: Customer value, Pricing
Jonas Mikael Krieger - 412876

25.10.2013

Taking everything into consideration, elaborating a value proposition involves prior

understanding of customers (their needs and problems) that is gathered through
improvement and maintenance of the relationship between them.
Training programs for managers are helpful since they should be able to identify notable
projects and guarantee cost savings to customers. Customer value is a multifaceted thing
and understanding the resonating dimensions of value proposition enhances success.

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Anderson et al. (2006), Customer value propositions in business markets, Harvard
Business Review, (March), 90-99
Lancioni (2005), A strategic approach to industrial product pricing: The pricing plan,
Industrial Marketing Management, 34, 177183