Gaining competitive advantage through customer value oriented managementAnexecutivesummaryformanagersGainingcompetitiveadvantageandexecutivereaderscanbefoundatthethroughcustomervalueorientedendofthisarticlemanagementFrankHuberAssistantProfessorofMarketing,DepartmentofMarketing,UniversityofMainz,Mainz,GermanyAndreasHerrmannProfessorofMarketing,DepartmentofMarketing,UniversityofMainz,Mainz,GermanyRobertE.MorganChairandProfessorofMarketingandStrategicManagement,SchoolofManagementandBusiness,UniversityofWales,Aberystwyth,Wales,UKKeywordsConsumerbehaviour,Perception,Productattributes,Value,CompetitiveadvantageAbstractWithinthecustomervalueliteraturethereisalacunaoftheoreticalframeworksandmodelsthatunderlieconsumers'overallproductvaluation.Thispaperaddressesthislimitationandpresentsamodelintegratingconsumervalues,productbenefits,andvariouscostsofconsumption.Intheproposedmodel,benefitsandcostsaredefinedintermsofconsumers'perceptionsintheactivitiesofacquisition,consumption,andmaintenance,aswellasconsumers'expectationofvaluesatisfactionbeforebuying.IntroductionEffectivestrategyDevelopinganeffectivestrategyrequiresthatexecutivesandcorporateleadershavethestrategicinsightandcomprehensiveunderstandingoftheproduct-marketdomain(s)theyoperatewithin.Thisunderstandingmustbesourcednottothefirm'sown(internallyderived)perspectivebutratherfromthatofitscustomers.Recall,forexample,thatXeroxviewsitselfasadocumentprocessing''company,whereasSchlumbergerprovidesinformation''tothepetroleumindustry.Strategicdecisionsarealsomadeastothefuturedirectionofthecompanyandthemeansofincreasingthelevelofcustomerorientationexhibited.Moststrategistsagreethatcreatingcustomervalueisfundamentaltoincreasedcustomerorientation(SlaterandNarver,1998).Indeed,creatingsuperiorcustomervalueisanecessarypreconditionforsecuringanicheinacompetitiveenvironment,nottomentionaleadershippositioninthemarket(Day,1990).AccordingtoPorter(1980),acompanycanfollowtwogenericroutestocompeteinamarket:differentiationorlow-cost.Day(1990,p.163)arguesthatbothapproachesmaintainthesameobjective,tocreatesuperiorcustomervalue,because:Regardlessofwhichoftheseroutesisemphasized,theeffortwillfailunlesssignificantcustomervalueiscreated.Day(1990,p.1492)proposesthattheconceptofcustomervaluecanbeexpressedintheformofanequation:theperceivedcustomervalue''representsinthisequationthedifferencebetweencustomer'sperceivedbenefits''andcustomer'sperceivedcosts''.AlthoughDay's(1990)interpretationofcustomervalueisintuitivelysound,somedetailsregardingTheresearchregisterforthisjournalisavailableat/.mcbup4/research_registersThecurrentissueandfulltextarchiveofthisjournalisavailableat/.emerald-library/ftJOURNALOFCONSUMERMARKETING,VOL.18NO.12001,pp.41-53,#MCBUNIVERSITYPRESS,0736-376141consumersremainunclear.Forexample,theprocessbywhichconsumersperceiveproductbenefitsisnebulous:Day(1990)particularlyaddressesproductvaluationbyindustrialconsumersindetail,butthisisonlyinprincipleapartofamuchmorecomplexprocessofproductvaluationbyconsumers.However,atheoreticalframework,whichunderliestheconsumers'overallproductvaluation,isabsentfromtheliterature.Suchaframeworkshouldaddresstheissuesofhowconsumersperceivethebenefitsandcostsofproducts(evaluationprocess),aswellaswhatpossiblebenefitsandcostsconsumersmayperceivefromproductsinthemarket(valuedrivers).Thecurrentpaperattemptstoreconcilethesegaps.Followingpresentationoftheprocessofproductvaluationforconsumers,thepapercontinueswithacomprehensivemodelofcustomervaluemanagementfortheconsumermarketintegratingconsumervalues,productbenefits,andvariouscostsofconsumption.Intheproposedmodelbenefitsandcostsaredefinedintermsofconsumers'perceptionsintheactivitiesofacquisition,consumption(orusing),andmaintenance,aswellasconsumers'expectationofpersonalvaluessatisfactionbeforebuying.Furthermorethiscontributionhelpsmanagersofferingatoolboxtobringthemodelintouse''.Finally,theimplicationsofconsumptionbehavioranalysisforademandorientedcustomervaluemanagementarediscussed.AmodelofcustomervalueforconsumermarketsDescribingcustomervaluefromanormativeperspectiveValue''Theconceptofvalue''hasbeenappliedtomanysettingsinthemanagement,strategy,finance,informationsystems,andmarketingliteratures(WikstromandNormann,1994).Althoughrepletewithincontemporaryresearchandpracticeinthesedisciplines,thevalueconceptismultifacetedandcomplicatedbynumerousinterpretations,biases,andemphases.Forinstance,thederivationsofvariousvaluedimensionshavebeenevidentfromthepointofviewofstrategicvalue''(Katz,1993),value''asequaltorevenueminuspurchases(Strassmann,1990),theeconomiccontributionthatvalue''makestoprofitmaximization(BankerandKauffman,1991),value''asmanifestincontinuousqualityimprovementinitiatives(RichardsonandGartner,1999),intrinsicvalue''createdthroughscientificapproachestoorganization(Meredithetal.,1994)a