Prevailing business practice and philosophy of value creation and value delivery have evolved significantly over the last seven decades. Post the Second World War, the focus of businesses was product centric. This was because the war shrank the manufacturing capacity for consumer goods worldwide either through destruction or shift of capacity to wartime production. Thus, demand exceeded supply, and the managerial focus was on manufacturing, supply chain and outsourcing. This imbalance gradually improved as manufacturing capacity was rebuilt and businesses proliferated.
Producers recognized that they had to adapt to the changing landscape and become more competition centric. Starting with consumer durables such as automobiles and appliances, the marketing emphasis shifted towards segmenting the market and promotion of value to inform the consumers why the offering is their best choice.
Today, despite a pandemic, supply far exceeds demand for most categories, especially in emerging markets. Competition is intense, and businesses cannot afford to be not customer centric (Sheth, Sisodia et al., 2000). Some firms even focus on segments of one, offering customization for each consumer.
While significant progress has been made to accurately value customers, it is worthwhile to remember that value creation is a special case of value co-creation where one party is dominant. In practice, the vast majority of all value is co-created, yet measuring co-created value presents even more significant challenges. Unlocking total value creation requires resolving the tensions within the organization of different functions such as R&D and finance and aligning objectives. For example, awareness, affordability and accessibility are commonly attributed to the marketing function; acceptability, education, activation to the sales function; and reinforcement, retention, and responsiveness to the customer support organization.
In this article, we define and discuss value, the roles of the customer and their varying interests in different types of value and 10 processes through which businesses create value. We conclude with pertinent research questions to advance theory and practice for creating enduring customer value.