Unit 2 Deliver Customer Service in a Business Environment (GC01073)

Unit 2: Deliver Customer Service in a Business Environment

Task 1.1: Produce a report on explaining what ‘added value’ means in terms of customer service

Customer service plays a vitally important role in promoting one’s business to an international extent. For this, the marketer adopts various measures to attract and support customers. The marketer uses many techniques to satisfy the customers and offers them many discounts. Value-added to the products is a scientific way of supporting the customers.

The use of “added value” has been widely advocated as a strategy for achieving competitive advantage in an increasingly hostile commercial environment and advice has been provided on the organizational processes involved in creating customer value (e.g. Band, 1991; Gale, 1994; Naumann, 1995). Yet, little has been written about the meaning of added value, its roles, and sustainability. This may be because the literature on defining value is fragmented (Woodruff, 1997) and few distinguishing between “value” and “added value”.

Other definitions of value have a broader interpretation of sacrifice, in which non-monetary factors such as time and effort are included (e.g. Butz and Goodstein, 1996; Carothers and Adams, 1991; GroÈnroos, 1997; Kotler, 1996; Naumann, 1995; Treacy and Wiersema, 1995; Zeithaml, 1988). Sacrifice is again defined from the customer’s perspective, as emphasized by Doyle’s (1989, p. 78) definition of value as “not what the producer puts in, but what the consumer gets out”. Zeithaml (1988) noted four types of consumer definitions of value:

• low price (focus on sacrifice);
• whatever the consumer wanted in a product or service (focus on Benefits);
• the quality obtained for the price paid (trade-off between one sacrifice component and one benefit component); and
• total benefits obtained for total sacrifice incurred (all relevant components considered)

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Benefits of “added value”

Represent business brand: An important aspect of added value is the values that represent the brand essence. The team could benefit from re-visiting their brand plan to check the intended values of the brand. They should then consider how all the activities of their staff, and their intermediaries’ staff, contribute to these values and make changes where inappropriate behaviors suggest contrary values.

Attain price premium: From the perspective of the firm, and consistent with the points earlier in the interviews, only two mentioned the role of added value was to attain a price premium. One commented, “it makes something worth paying extra for” (market research consultant) and the other was that “it is the thing that helps you justify your price premium to consumers” (advertising consultant).

Task 1.2: Recognize the opportunities to add value to a customer interaction

There are many opportunities created by the implementation of “added value” in business. It ensures customer interaction in business. Value addition in products makes happy the customers by getting delicious and fresh products. Here there are some of the opportunities of adding value to the products or price for both the customer and the marketer:

Minimize Cost: Nevertheless, before producers examine value-added processing and marketing; cost minimization in production is achieved. Only low cost and efficient producers will be able to survive and compete in production agriculture. Adding value cannot take the place of reaching the efficiencies of production attainable through technology and economies of scale.

Solve local economic problems: Leaders in local communities also are looking for solutions to their local economic problems. If rural areas cannot find ways to attract or create jobs requiring the skills of highly educated people, they may lose the group most likely to be the catalyst for improving local conditions (Ghelfi). However, any gains by rural areas probably will have to come about through intense competition with older, more-established industries in many metropolitan areas (Brown and Petrulis).

Rates of return on equity: Value-adding determines the return on equity for production agriculture farms and food companies including processing, distribution, marketing, and retailing since 1980. The return on equity for the food companies has averaged almost 16 percent, but the farm return on equity has averaged about 0 percent since 1980. These factors are encouraging producers to become more interested in capturing some of the revenues, margins, and related profits that are available between the farm gate and consumers with value-added investments.

Total food expenditures: The percentage of disposable income that consumers in the US spend on food has decreased steadily. The amount spent by consumers decreased from 17.6 percent in 1959 to 10.7 percent in 1997.  The real dollars spent on food compared to the total disposable income. Food expenses in real dollars have remained relatively steady over the past 40 years. However, disposable income has increased by almost 300 percent over that period. This suggests that consumers may be less sensitive to the price of food than in the past and more willing to pay for high quality and high convenience.

World Trade Perspective: Trade agreements including the North American Free Trade Agreement and pacts among the World Trade Organization have facilitated greater and freer trade of agricultural commodities among its member countries. These changes in the international trading environment are greatly influencing agriculture production, processing, and marketing industries through increased imports and displacing or complementing domestic production……..

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