Skip to main content

Customer value: The next source for competitive advantage

An Erratum to this article was published on 01 June 1997

Abstract

Driven by more demanding customers, global competition, and slow-growth economies and industries, many organizations search for new ways to achieve and retain a competitive advantage. Past attempts have largely looked internally within the organization for improvement, such as reflected by quality management, reengineering, downsizing, and restructuring. The next major source for competitive advantage likely will come from more outward orientation toward customers, as indicated by the many calls for organizations to compete on superior customer value delivery. Although the reasons for these calls are sound, what are the implications for managing organizations in the next decade and beyond? This article addresses this question. It presents frameworks for thinking about customer value, customer value learning, and the related skills that managers will need to create and implement superior customer value strategies.

This is a preview of subscription content, access via your institution.

We’re sorry, something doesn't seem to be working properly.

Please try refreshing the page. If that doesn't work, please contact support so we can address the problem.

References

  1. Anderson, James C., Dipak C. Jain, and Pradeep K. Chintagunta. 1993. “Customer Value Assessment in Business Markets: A State-of-Practice Study.”Journal of Business to Business Marketing 1 (1): 3–30.

    Article  Google Scholar 

  2. Band, William A. 1991.Creating Value for Customers. New York: John Wiley.

    Google Scholar 

  3. Birch, Eric N. 1990. “Focus on Value.” InCreating Customer Satisfaction. Research Report No. 944. New York: The Conference Board, 3–4.

    Google Scholar 

  4. Burns, Mary Jane. 1993.Value in Exchange: The Consumer Perspective. Knoxville: The University of Tennessee.

    Google Scholar 

  5. ————— and Robert B. Woodruff. 1992. “Delivering Value to Consumers: Implications for Strategy Development and Implementation.” InMarketing Theory and Applications. Eds. Chris T. Allen, Thomas J. Madden, Terence A. Shimp, Roy D. Howell, George M. Zinkhan, Deborah D. Heisley, Richard J. Semenik, Peter Dickson, Valarie Zeithaml, and Roger L. Jenk. Chicago: American Marketing Association, 209–216.

    Google Scholar 

  6. Butz, Howard E., Jr. and Leonard D. Goodstein. 1996. “Measuring Customer Value: Gaining the Strategic Advantage.”Organizational Dynamics 24 (Winter): 63–77.

    Article  Google Scholar 

  7. Carothers, Harlon G., Jr. and Mel Adams. 1991. “Competitive Advantage Through Customer Value: The Role of Value Based Strategies.” InCompeting Globally Through Customer Value. Eds. Michael J. Stahl and Gregory M. Bounds. New York: Quorum, 32–66.

    Google Scholar 

  8. Churchill, Gilbert A. and Carol Surprenant. 1982. “An Investigation Into the Determinants of Customer Satisfaction.”Journal of Marketing Research 19 (November): 491–504.

    Article  Google Scholar 

  9. Clemons, D. Scott and Robert B. Woodruff. 1992. “Broadening the View of Consumer (Dis)satisfaction: A Proposed Means-End Disconfirmation Model of CS/D.” InMarketing Theory and Applications. Eds. Chris T. Allen, Thomas J. Madden, Terence A. Shimp, Roy D. Howell, George M. Zinkhan, Deborah D. Heisley, Richard J. Semenik, Peter Dickson, Valarie Zeithaml, and Roger L. Jenk. Chicago: American Marketing Association, 209–216.

    Google Scholar 

  10. Dabholkar, Pratibha A., Wesley J. Johnson, and Amy S. Cathey. 1994. “The Dynamics of Long-Term Business-to-Business Exchange Relationships.”The Journal of the Academy of Marketing Science 22 (Spring): 130–145.

    Article  Google Scholar 

  11. Day, George S. 1990.Market Driven Strategy: Processes for Creating Value. New York: Free Press.

    Google Scholar 

  12. ————— 1994. “Capabilities of Market-Driven Organizations.”Journal of Marketing 58 (October): 37–52.

    Article  Google Scholar 

  13. ————— and Robin Wensley. 1988. “Assessing Advantage: A Framework for Diagnosing Competitive Superiority.”Journal of Marketing 52 (April): 1–20.

    Article  Google Scholar 

  14. Dutka, Alan. 1994.AMA Handbook for Customer Satisfaction. Lincolnwood, IL: NTC Business Books.

    Google Scholar 

  15. Dwyer, Robert F., Paul H. Schurr, and Sejo Oh. 1987. “Developing Buyer-Seller Relationships.”Journal of Marketing 51 (April): 11–27.

    Article  Google Scholar 

  16. Flint, Daniel J., Robert B. Woodruff, and Sarah Fisher Gardial. 1997. “Customer Value Change in Industrial Marketing Relationships: A Call for New Strategies and Research.”Industrial Marketing Management: forthcoming.

  17. Gale, Bradley T. 1994.Managing Customer Value. New York: Free Press.

    Google Scholar 

  18. Gardial, Sarah Fisher, D. Scott Clemons, Robert B. Woodruff, David W. Schumann, and Mary Jane Burns. 1994. “Comparing Consumers’ Recall of Prepurchase and Postpurchase Evaluation Experiences.”Journal of Consumer Research 20 (March): 548–560.

    Article  Google Scholar 

  19. Garver, Michael S. and Sarah Fisher Gardial. 1996. “The Role of the Salesperson in Delivering Customer Value: A Situational Analysis.” InExpanding Marketing Horizons Into the 21st Century. Ed. David L. Moore. Syracuse, NY: Association of Marketing Theory and Practice, 243–249.

    Google Scholar 

  20. Garvin, David A. 1983. “Quality on the Line.”Harvard Business Review 61 (September–October): 64–75.

    Google Scholar 

  21. Griffin, Abbie and John R. Hauser. 1993. “The Voice of the Customer.”Marketing Science 12 (Winter): 1–27.

    Article  Google Scholar 

  22. Gutman, Jonathan. 1982. “A Means-End Chain Model Based on Consumer Categorization Processes.”Journal of Marketing 46 (Spring): 60–72.

    Article  Google Scholar 

  23. Hall, Gene, Jim Rosenthal, and Judy Wade. 1993. “How to Make Reengineering Really Work.”Harvard Business Review 71 (November–December): 119–133.

    Google Scholar 

  24. Hamel, Gary and C. K. Prahalad. 1994.Competing for the Future. Boston: Harvard Business School Press.

    Google Scholar 

  25. Hauser, John R. and Don Clausing. 1988. “The House of Quality.”Harvard Business Review 3 (May–June): 63–73.

    Google Scholar 

  26. Hayes, Bob E. 1992.Measuring Customer Satisfaction. Milwaukee, WI: ASQC Quality Press.

    Google Scholar 

  27. Holbrook, Morris B. 1994. “The Nature of Customer Value: An Axiology of Services in the Consumption Experience.” InService Quality: New Directions in Theory and Practice. Eds. Roland Rust and Richard L. Oliver. Newbury Park, CA: Sage, 21–71.

    Google Scholar 

  28. Jaworski, Bernard and Ajay Kohli. 1993. “Market Orientation: Antecedents and Consequences.”Journal of Marketing 57 (July): 53–70.

    Article  Google Scholar 

  29. Jenkins, Mark. 1996. “Making Sense of Customers: An Evaluation of the Role of the Customer in the Subjective Strategies of Senior Managers.”Journal of Strategic Marketing 4 (June): 95–116.

    Article  Google Scholar 

  30. Jones, Thomas O. and W. Earl Sasser. 1995. “Why Satisfied Customers Defect.”Harvard Business Review 73 (November–December): 88–99.

    Google Scholar 

  31. Lai, Albert Wenben. 1995. “Consumer Values, Product Benefits and Customer Value: A Consumption Behavior Approach.” InAdvances in Consumer Research. Eds. Frank R. Kardes and Mita Sujan. Provo, UT: Association for Consumer Research, 381–388.

    Google Scholar 

  32. Leonard, Frank S. and W. Earl Sasser. 1982. “The Incline of Quality.”Harvard Business Review 61 (September–October): 163–171.

    Google Scholar 

  33. McLeod, Raymond, Jr. and John C. Rogers. 1985. “Marketing Information Systems: Their Current Status in Fortune 1000 Companies.”Journal of Management Information Systems 1 (Spring): 57–75.

    Google Scholar 

  34. Mentzer, John T., Carol C. Bienstock, and Kenneth B. Kahn. 1995. “Benchmarking Satisfaction.”Marketing Management 4 (Summer): 41–46.

    Google Scholar 

  35. Monroe, Kent B. 1990.Pricing: Making Profitable Decisions. New York: McGraw-Hill.

    Google Scholar 

  36. Narver, John C. and Stanley F. Slater. 1990. “The Effect of a Market Orientation on Business Profitability.”Journal of Marketing 54 (October): 20–35.

    Article  Google Scholar 

  37. Naumann, Earl. 1995.Creating Customer Value. Cincinnati, OH: Thompson Executive Press.

    Google Scholar 

  38. Oliver, Richard L. 1997.Satisfaction: A Behavioral Perspective on the Consumer. New York: McGraw-Hill.

    Google Scholar 

  39. Parasuraman, A., Leonard A. Berry, and Valarie Zeithaml. 1985. “A Conceptual Model of Service Quality and Its Implications for Future Research.”Journal of Marketing 49 (Fall): 41–50.

    Article  Google Scholar 

  40. Park, C. Whan, Bernard J. Jaworski, and Deborah J. MacInnis. 1986. “Strategic Brand Concept-Image Management.”Journal of Marketing 50 (October): 135–145.

    Article  Google Scholar 

  41. Porter, Michael E. 1980.Competitive Strategy. New York: Free Press.

    Google Scholar 

  42. Reynolds, Thomas J. and Jonathan Gutman. 1988. “Laddering Theory, Method, Analysis, and Interpretation.”Journal of Advertising Research (February/March): 11–31.

  43. Richins, Marsha L. 1994a. “Special Possessions and the Expression of Material Values.”Journal of Consumer Research 21 (December): 522–533.

    Article  Google Scholar 

  44. ————— 1994b. “Valuing Things: The Public and Private Meanings of Possessions.”Journal of Consumer Research 21 (December): 504–521.

    Article  Google Scholar 

  45. Schwartz, Barry. 1990. “The Creation and Destruction of Value.”American Psychologist 45 (1): 7–15.

    Article  Google Scholar 

  46. Senge, Peter M. 1990. “The Leader’s New Work: Building Learning Organizations.”Sloan Management Review 12 (Fall): 7–24.

    Google Scholar 

  47. Sharma, Arun and Douglas M. Lambert. 1994. “How Accurate Are Salespersons’ Perceptions of Their Customers?”Industrial Marketing Management 23: 357–365.

    Article  Google Scholar 

  48. Sheth, Jagdish N., Bruce I. Newman, and Barbara L. Gross. 1991.Consumption Values and Market Choices: Theory and Applications. Cincinnati, OH: Southwestern Publishing.

    Google Scholar 

  49. Slater, Stanley F. and John C. Narver. 1995. “Market Orientation and the Learning Organization.”Journal of Marketing 59 (July): 63–74.

    Article  Google Scholar 

  50. Slywotzky, Adrian J. 1996.Value Migration. Boston: Harvard Business School Press.

    Google Scholar 

  51. Spreng, Richard A., Scott B. MacKenzie, and Richard W. Olshavsky. 1996. “A Reexamination of the Determinants of Consumers’ Satisfaction.”Journal of Marketing 60 (July): 15–32.

    Article  Google Scholar 

  52. Taguchi, Genichi and Don Clausing. 1990. “Robust Quality.”Harvard Business Review 90 (January–February): 65–75.

    Google Scholar 

  53. Westbrook, Robert A. and Michael D. Reilly. 1983. “Value-Percept Disparity: An Alternative to the Disconfirmation of Expectations Theory of Consumer Satisfaction.” InAdvances in Consumer Research. Eds. Richard P. Bagozzi and Alice M. Tybout. Ann Arbor, MI: Association of Consumer Research, 256–261.

    Google Scholar 

  54. Woodruff, Robert B., D. Scott Clemons, David W. Schumann, Sarah F. Gardial, and Mary Jane Burns. 1991. “The Standards Issue in CS/D Research: A Historical Perspective.”Journal of Consumer Satisfaction, Dissatisfaction & Complaining Behavior 4: 103–109.

    Google Scholar 

  55. ————— and Sarah Fisher Gardial. 1996.Know Your Customer: New Approaches to Customer Value and Satisfaction. Cambridge, MA: Blackwell.

    Google Scholar 

  56. -----, David W. Schumann, D. Scott Clemons, Mary Jane Burns, and Sarah Fisher Gardial. 1990. “The Meaning of Satisfaction and Dissatisfaction: A Themes Analysis From the Consumer’s Perspective.” Working paper. The University of Tennessee.

  57. Wright, Linda Berns, David W. Schumann, J. Robert Graves, Sarah Fisher Gardial, and Robert B. Woodruff. 1994. “Extending the Role of Advertising to Post Purchase Activity: A Model for Going Beyond the Sale.” InMarketing Theory and Applications. Eds. C. Whan Park and Daniel C. Smith. Chicago: American Marketing Association, 30–35.

    Google Scholar 

  58. Zaltman, Gerald. 1996. “Metaphorically Speaking: New Technique Uses Multidisciplinary Ideas to Improve Qualitative Research.”Marketing Research 8 (Summer): 13–20.

    Google Scholar 

  59. Zeithaml, Valarie A. 1988. “Consumer Perceptions of Price, Quality, and Value: A Means-End Model and Synthesis of Evidence.”Journal of Marketing 52 (July): 2–22.

    Article  Google Scholar 

Download references

Author information

Affiliations

Authors

Corresponding author

Correspondence to Robert B. Woodruff.

Additional information

He has coauthored five books, the most recent one on customer value determination. He has published articles in theJournal of Marketing, Journal of Marketing Research, Journal of Consumer Research, andJournal of Consumer Satisfaction, Dissatisfaction and Complaining Behavior.

An erratum to this article is available at http://dx.doi.org/10.1177/0092070397253006.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Woodruff, R.B. Customer value: The next source for competitive advantage. J. of the Acad. Mark. Sci. 25, 139 (1997). https://doi.org/10.1007/BF02894350

Download citation

Keywords

  • Customer Satisfaction
  • Consumer Research
  • Quality Function Deploy
  • Delivery Strategy
  • Harvard Business Review