1. Value merchants
Chapter 2 - points of discussion
Inspired by Value Merchants by
J. C. Anderson, N. Kumar, J. A. Narus
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Andreas Brinck

2. What is value in business
markets?
Adjusted Total
Satisfaction
mkt.perceived savings of
received
customer
quality
None
Benefits
of the
Maximum
relative to
price
price
above?
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Andreas Brinck

3. The common denominator?
“Value in business markets is the
worth in monetary terms of the
technical, economic, service, and
social benefits a customer firm
receives in exchange for the price
it pays for a market offering.”
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Andreas Brinck

4. It follows:
Benefits and price share an absolute relationship.
Benefits and price share an absolute relationship.
Benefits and price share an absolute relationship.
Benefits and price share an absolute relationship.
Benefits and price share an absolute relationship.
Benefits and price share an absolute relationship.
Benefits and price share an absolute relationship.
Benefits and price share an absolute relationship.
Valuef – Pricef (duh!)
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Andreas Brinck

5. But, there is always an
alternative…
We get:
(Valuef – Pricef) > (Valuea – Pricea)
The Fundamental Value Equation
TAKE AWAY:
Customer value is a comparative concept. It compares our offer
with what the customer considers the next-best choice to our
product. Therefore, this concept is loaded with variation (unless
we communicate otherwise).
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Andreas Brinck

6. Something about value
• Value varies
TAKE AWAY: Do not strive to calculate value to the
10th decimal place.
• It’s an individual point of view among customers
TAKE AWAY: Know your customers and educate
them to form a common understanding
• Customer vs. supplier assessment of product
TAKE AWAY: Take the customer’s perspective
• Value can change over time
TAKE AWAY: Be aware of these hidden
strength/weaknesses of your product
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Andreas Brinck

7. The story about the elements
Every offer in the market can be seen as
a grouping of value elements:
Points of parity Points of difference Points of contention
Py Di Cn
1 2 3
Our elements perform just like the Our elements are superior to the Elements whose value is seen
next-best alternative’s elements next-best alternatives or vice-versa differently by customer and supplier
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Andreas Brinck

8. TAKE AWAY:
• To categorize elements, a detailed
understanding of the customers’
perception of value is required
• The most effective proposal is the
focused one (two decisive elements of
difference
• Contain point of parity
• If necessary cede to a competitor’s value
element that customers value the least
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Andreas Brinck

9. Questions? Answers? Suggestions? mail@andreasbrinck.de
THANK YOU!
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Andreas Brinck