Academic journal article Global Journal of Business Research

Customer Net Value: A Service Gap Perspective from Saudi Arabia

Academic journal article Global Journal of Business Research

Customer Net Value: A Service Gap Perspective from Saudi Arabia

Article excerpt

ABSTRACT

The identification and creation of customer value is regarded as an essential prerequisite for the success, long-term survival and competitive advantage of firms. However, the current customer value construct is too narrow and simplistic. The advice provided to companies also rest on little scientific understanding of what and how customers' derived their desired value as the current customer value construct adopts a received value conceptualization. Therefore, the main aim of this article is to discuss, operationalized and proposed the measurement for a comprehensive customer value construct comprising of customer desired value, received value and customer net value. In the process of validating the measurements, 800 questionnaires were distributed to grocery shoppers in different shopping outlets in Saudi Arabia of which 407 questionnaires were completed. The findings indicated that the proposed constructs were valid and have practical and theoretical significance especially in the customer satisfaction management.

JEL: M31 Marketing

KEYWORDS: Customer Net Value, Perceived Value, Desired Value, Service Quality Gap

(ProQuest: ... denotes formulae omitted.)

INTRODUCTION

Value has always been 'the fundamental basis for all marketing activity' (Holbrook, 1994). Indeed creating superior customer value is a necessary condition for company securing a niche in a competitive environment, not to mention a leadership position in the market (Day, 1 990). Sinha and DeSarbo (1998) for instance argued that value was labelled as "the new marketing mania and the way to sell in the 1990s" and value has proven to "be of continuing importance into the twenty-first century" (Sweeney and Soutar, 2001). Meanwhile, the notion of "value creation" reflects upon the increased recognition of value as one of the most important measures in gaining a competitive edge (Parasuraman, 1997) and a key factor in strategic management (LeBlanc and Nguyen, 2001). Consequently, there has been a growing interest in the value construct among both marketing researchers and practitioners (Eggert and Ulaga, 2002). The growing importance of the value construct is evident with the inclusion of 'customer value' in the definition of 'Marketing' that has been modified by the American Marketing Association (2006). The identification and creation of customer value is regarded as an essential prerequisite for the success, long-term survival and competitive advantage of firms. Hence, it is the intention of this paper to discuss the development, operationalization and measurement of customer value.

The importance of understanding customer value is underscored in numerous journal articles, conference presentations, books, and discussions in the business press on the topic. Nevertheless, despite the many articles and the centrality of the value concept in marketing, there is still relatively little knowledge about what value is, what its characteristics are, or how consumers determine it (Huber, and Herrmann, 2000). Though the interest in customer value has been substantial in the last couple of decades (DeSarbo, et al., 2001), authors indicate that research in this area is still in its early stages (Flint, et al., 2002; Jensen, 2001; Parasuraman and Grewal, 2000). With respect to the current literature, despite numerous studies were done concerning the meaning of customer value (e.g., Zeithaml, 1988), how customers perceive value (Gardial, demons, Woodruff, Schumann and Burns, 1994), and ways to uncover what customers currently value (e.g., Woodruff, and Gardial, 1996), we could not find any research that examined how or what customers 'value' from their business providers (Flint, and Woodruff, 2001). The advice provided to businesses to date rests on little scientific understanding of what and how customers' derived their desired value (Woodruff, 1997).

In addition, most discussions of customer value research tend to adopt a received value conceptualization (Flint, and Woodruff, 2001). …

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