Application of Woodruff Customer Perceived Value model on Apple Brand

Woodruff (1997) defines customer value as how customer prefers and evaluates the characteristics, attribute performances and consequences that arises from consumption providing for the achievement of a customer's goals or objectives regarding that particular situation of consumption. Woodruff relates the concept of desired customer value is conceived as a component of the whole value system of the customer. It focuses on the conceptual value dimensions, or outcome, obtained from specific performance attribute as explained by (Woodruff, 1997).

Woodruff model is based on the means-end theory and related that customers desired value is different from the received value. According to Woodruff (1997) the consumer perceive value after using the commodity. His model incorporates two dimensions known as desired value and received value. Descending the hierarchy that illustrates desired value, the apple user will initiate from desire to achieve his/her objective, for which the customer will reflect upon the consequence that may attribute to the goals. An apple user would enumerate certain objectives or goals involving the product usage and applicability  that will lead up to build his experience.  The consequence will take the user further to select product attributes that may include features and functions and attributes' performances. While ascending the hierarchy suggests the apple user will choose these two factors before buying. The outcome will be the sought-after consequence which will lead to the desired objective retrieved by apple user from value in experience.

On other side in Woodruff model comes the received value from the product and involves three stages as well forming a hierarchy as depicted in the picture above. The three stages are interconnected but cannot be achieved simultaneously. This deduction bring us to three levels of satisfaction, that results respectively from product attribute, performance consequence and customer's goals. Therefore we can say that Apple user can benefit from one after another form product attributes of IPhone and can attain its goals and experience satisfaction by meeting up the consequences.

Furthermore, the User can evaluate the value from deducting perceived benefits of the Iphone from its perceived cost. Which can vary from individual user to user. Perceived benefits may include convenience, quality and prestige/status. This will only be attained once a user experience it referred to as Value in experience that include all the four steps on customer value experiencing. While a user would also bear a perceived cost that includes money, time, search cost and mental fatigue in attaining of the phone. Thus customer perceived value would be attained by dividing the perceived benefits from perceived scarified/cost. Hence this way value can be determined by the users that will enable to evaluate against other competing products. Whereas, managers can benefit from it by analysing and getting insight to consumer thinking process and formulating strategies accordingly.

Keywords: Customer Perceived Value, Woodruff Model, Apple, Consumer Value 

Factors determining Comparative Advantage for a country

A country can attain comparative advantage in producing goods and services that enables them to export that commodity to other countries. Litertaure on international trade and policy frameworks many reasons that allow countries to trade and export goods. Most of them can be classified into (1) Technological superiority, (2) Resource endowments, (3) Demand patterns, and (4) Commercial policies by Sanides (2009).

1. Technological Superiority

Technological superiority has formed the bases to economics two prime theories. First is that of Adam Smith’s theory of absolute advantage and other that of comparative advantage by David’s Ricardo (1817). These both theories formulate their grounds on the concept of country having technological superiority over other while producing a certain commodity. The concept of absolute advantage refers to the country’s ability to produce a commodity either with a higher productivity or at a lower cost per unit production than other country by Economist (2009). But country’s absolute advantage in producing a commodity does not necessarily means to bring mutual benefit to trade. For example: a country can have absolute disadvantage in all goods and services it produces compared to another country yet it can draw advantage by means of international trade. This tends to happen because of comparative advantage in producing a certain good comparing to other countries.

2. Resource Endowments

According to Seyoum (2007) countries who don’t pose technological superiority might experience abundance availability of resources than other countries giving them comparative advantage. This happens as resource availability allows them produce commodities in bulk and lower per unit cost than competing countries. Differences in relative factor endowments also lead to a country comparative advantage illustrates Rieti (2012). As promulgated by Heckscher and Ohlin country should specialize to produce commodity for which the resources are abundantly available in the country this will lead to comparative advantage by Subasat & Turan (2003).

3. Human skills:

Among various factors of production human skills (mental and physical) both act as an important resource for a country. Chor (2010) describes countries that have relative abundant human skills tend to have comparative advantage in producing commodities that extensively requires human skills. For example: Products that may require special skills in terms of engineering, programmers, web designer and many other highly skilled labor jobs would require certain skill set of employees. Since country with abundance of these type of skilled labor would reap comparative advantage than ones who does not.

4. Economies of Scale:

The term economies of scale refer to a company or country producing certain commodity in bulk quantities that allows them to reduce per unit cost of that product described by Palley (2008). Whereas government can also intervene to help lower the production cost by means of external economies by introducing certain industry policies that provides good infrastructure and well trained employees to the sector. This may boost or create a comparative advantage for the industry experiencing such economies of scale by Sanides (2010).

5. Technological Gap (Benefits of an Early Start) and Product Cycle:

Developed economies benefit from their developed industrial infrastructure as they tend to gain early start up advantage in producing most of products that brings them comparative advantage by International trade centre (2011). This gives them chance to cater to large local and international markets and milk the high margins at start until times with low factor cost countries enter the market domain for those products as explained by Vernon’s (1966).

6. Demand Patterns: Demand Considerations

Size of the domestic market and demand patterns have clear implications on developing equilibrium terms of trade and gains from it. Moreover, it also helps bring economies of scale and product cycle hypothesis.  According to Costinot (2009) relates that demand in local market steps as a milestone leading its success in international markets. As per Alessandrini et al (2007) concept producers develop new products to satisfy the home market needs initially. This gives them valuable experience and ensures to improve on their processes making product much efficiently and effectively bringing the cost effectiveness and comparative advantage respectively. Chang (2009) postulates exporting the product to countries with similar tastes/demand patterns. The theory, coupled with market imperfections and product differentiation can explain a large portion of intra-industry trade among the industrialized nations.

Keywords: Comparative Advantage, Framework for Comparative Advantage, 

Measuring Revealed Comparative Advantage by Balassa Index

Balance et al (1987) coined a basic theoretical framework that enabled us to determine relationship between conjectural notions of comparative advantage in relation to measuring comparative advantage practically.  

                                                    EC à CA à TPC à RCA

The above equation determines that economic conditions varying across countries are main drivers for international pattern of comparative advantage. The under lining factors of these patterns consist of production and consumption variables in international trade. The relationship between first three factors Economic conditions, comparative advantage and trade production and consumption factor are core to determine motives behind international trade theories. This refers to understand economic factors that thrives comparative advantage and promote trade and evaluate the effect of trade on economy by Balance et al (1987). 

Balassa Index:

In trade theory, the phenomenon of comparative advantage highly depends on the pre trade commodities‟ relative prices, but it cannot be observed in real world. Researchers or the economists may have access to future trade or the existing trade data. Thus to provide solution for calculating comparative advantage for any country or a commodity Bela Balassa (1965) proposed the concept termed as Balassa Index that calculated comparative advantage by means of differences in relative factor endowments.

The index computed by Bela Balassa worked on basis for revealing comparative advantage to the country’s most efficient, less efficient and least efficient sectors. Thus in broader concept it allows to explore competency of strong sectors of economy. To derive the comparative advantage from Balassa index post trade data is used. Hence, revealed comparative advantage is calculated by attaining the relative value of a commodity in country’s total export value divided by commodity relative value in world’s total export by Bela Balassa (1977).

Since Balassa index does not possess cardinal or ordinal property it has been discussed highly in literature because of its magnitude. Hence, it is considered as valuable tool in measuring advantage of an economy in a particular product deriving from post trade data. According to Michael Porter (2002) in some cases Balassa Index above 1 or in others Index exceeding 2 highlights country’s strong sectors.

Balassa Index is calculated according to the formula;

BRCAij = (Eij / Ej) / (Ei / E)

Where

BRCAij = Balassa Revealed Comparative Advantage index for commodity i of

Country j

Eij = Country j exports of commodity i

Ej = Country j total exports

Ei = commodity i total world exports

E = total world exports.

The equation above describes market share of country ‟j‟ in export of commodity ‟i‟ and compares its market share in the world export market. If the calculated value of BRCAij is greater than unity it means country ‟j‟ has comparative advantage in export of commodity ‟i‟. If BRCAij is less than 1, it indicates that country ‟j‟ has comparative disadvantage in export of commodity ‟i‟. Finally, if BRCAij is equal to 1, it means country ‟j‟ has neutral comparative advantage in commodity ‟i‟. 


Keywords: Comparative Advantage, Revealed Comaprative Advantage, Balassa Index

Comparative Advantage Theory

David Ricardo (1817) in his concept for comparative advantage theory tried to outlay the flaws of absolute advantage model and fulfill the gaps with his concept of comparative advantage theory. In his theory he discussed about countries producing commodities that they attain comparative advantage in relative to other countries. Ricardo theory is based upon opportunity cost rather than financial cost. He further stressed on comparative advantage being the way forward for a country to gain efficient goods production.

In real terms when countries specialize with concept to comparative advantage it helps increase the overall global production and leads to raise global living standards. David Ricardo critically appraised Adam Smith theory illustrating that countries should focus on producing commodities that they are better at comparing to other world countries. He was also against trade barriers and tariffs that restrict free trade in the world. He focused on advantages of comparative advantage and emphasized it to be the way forward for achieving efficient worldwide production.

Ricardo’s comparative advantage theory interprets the advantage between two countries trading wine and clothes. England and Portugal in this example, he explained that England required 100 men to produce cloth and 120 men for wine production. So, it would be in the favor of England to import wine and export cloth whereas, Portugal might utilize 80 men for wine and 90 for cloth production. Ricardo further explained that it is beneficial for Portugal to export wine in exchange for cloth with England Ricardo.

The comparative advantage as a concept in economics is among few of the rational ones. In his articles he discuss the parameters of the comparative advantage theory and identify the key point that country even with no absolute advantage in any particular sector can specialize in industry with it is least bad at it and use that commodity for trade gaining advantage.

Keywords: Comparative Advantage Theory, David Ricardo, Adam Smith

Significance of Corporate Social Responsibility

There has been growing importance of Corporate Social Responsibility (CSR) phenomenon in the contemporary business and community across the world. It has been becoming a matter of great significance for business firms to rely on CSR initiatives to secure increasing support from community groups and stakeholders community leading to their business growth and success. International businesses have shown great enthusiasm towards a robust CSR performance in host and developing countries so to clinch stronger local and global community support for their business affairs. 

Under CSR initiatives, business firms come up with effective targets and performance in serving their clientele, shareholders, employees, suppliers, community groups and environment. They evolve socially responsible and environmentally sustainable strategies to conduct their business affairs and proactively engage into community-based partnerships to ensure socio-economic growth and development of general public.   They also engage into business relations with those parties who hold impressive CSR credentials. Their CSR-based mind-set and behaviors significantly help them to meet their financial targets with lowest possible operational costs and stronger community supports. 

There has been growing trend among businesses to publish CSR reports worldwide reflecting their dedication to social good and environmental concern alongside meeting financial targets. There has been growing understanding and scrutiny by society groups over the CSR initiatives and performance of business firms in seeking public welfare. Consequently, business firms have shown more willingness and compliance to integrate greater societal and environmental facets in their CSR exposures. They have adopted international standards to give a fair and true account of their CSR targets and achievements. They largely count on community’s feedback and expectations to evolve their CSR strategies. They provide full account of their financial and societal operations for the appraisal of their performance in utilizing community financial and human resources in seeking general public welfare. They provide regular CSR reports and exposures developed under globally recognized criteria for public information and accountability. Strategic Corporate Philanthropy can be attained by meeting the marketing and other corporate objectives of businesses by investing in CSR activities. They do so by voluntarily allocating resources to social services and charitable cause as a discretionary responsibility. 

Keywords: Corporate Social Responsibility, CSR, Corporate Philanthropy

Employee Empowerment for Customer Oriented Culture

Employee empowerment helps delegate employees with decision making power in their respective domains. The halo effect concepts relates it to errand the responsibility of employee from that of management. However, the philosophy of the strategy is to instil leadership skill at every level of management with indistinguishable vision. The purpose of this standpoint is to enable a team culture in the organization to boost productivity by assigning responsibility.

Employee empowerment is believed to augment the morale of work force which has mark influence on productivity. It can result in multi dynamic performance and coordination. Yet, scholars have demonstrated various concerns over the strategy that articulates the possible aftermaths of the implication. Consequently, it can be concluded that employee empowerment and organizational outcomes have direct relationship that can be measured in terms of employee productivity, customer satisfaction and ultimately the success of organization.

However, the necessary components of such a culture should be amalgamated in a manner that should boost the self esteem of employee with the ethnicity of shared learning. Management attitude needs to be appropriate to submerge its reflection down the line to enhance efficacy. Hence, its important to undertand that the process of cultivating employee empowered culture in an organization is a gradual and time taking process. A patience focused approach can bring in necessary changes in the environment to nurture employee commitment and ownership.

A positive image of total customer experience is necessary for the development and maintenance of healthy customer relationship management, which cannot be accomplished until the introduction of the chain of necessary element in the organization. Therefore, it can be declared that the introduction of customer oriented culture in the organization requires the stimulation of a compact process comprised of training for leadership, communication and coordination across the board along with behavioral changes of management with improved recognition, delegation and team building. On the other hand, evident is the fact that an imbalance of behavioral modifications in organization culture or individual learning may lead to massive aftermaths.

Investigations of reputed scholars have proved the subsistence link betweem healthy employee engagement w customer satisfaction with the support of authentic analysis. Researchers have developed and explained the most convincing affect and impact theory on the same grounds. The same can be studied from the flow of after effects of motivation towards customer satisfaction until remarkable financial performance of an organization, which can be well understood.

Keywords: Employee Empowerment, Customer Oriented Culture

Significance of Consumer Behavior in Contemporary Era Marketing

Marketing in contemporary era has assumed status of integral part of businesses provided the ever increasing competitiveness is the global industrial scenario. It is agreed that along with having so much importance in the modern era, marketing has also been subjected to various concerns that make this field one of the most toiling and taxing domains both in academia and corporate world. What makes the discipline rigorous is the product of modern consumer behavior spanning across the globe.   state that by definition, the consumer behavior is: The study of individuals, groups, or organizations and the processes they use to select, secure, and dispose of products, services, experiences, or ideas to satisfy needs; and the impacts that these processes have on the consumer and society.

Researchers are of view that consumer behavior has been a fully-fledged discipline that counts in considerable support from the other disciplines such as psychology,  sociology , social anthropology , marketing  and  economics. In order to understand the dynamics of buying behavior, marketers act as useful interface between the organization and consumers. Hence therefore consumer behavior is taken in perspective with multiple factors that are related to demographics and psychographics of consumer base. 

Consumer behavior works for the benefit of both organization and customers since both the parties end up with their motivations tapped and aspirations fulfilled. It is evident that marketers struggle day in and day out to make a match between what consumers think of their wants and needs and what organizations are capable of putting on offer for them. This match determines the fate of a company’s repute and tells the successful brands apart from others. We can describe consumer behavior as; It attempts to understand the decision-making processes of buyers, both individually and in groups. It studies characteristics of individual consumers such as demographics and behavioral variables in an attempt to understand people's wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general. Significance of the study for consumer behavior can be explained with the fact that presently marketers see three pronged advantage as the study of consumer behavior reveals the attitudes of consumers in capacities of user, payer and buyer. All the capacities have different connotations over the buying decisions. 

Consumer behavior is an esoteric area in the light of this fact that researchers have come up with multiple fields within the traditional marketing such as Customer Relationship Management and others. The focus of emerging fields is to make the most of understanding of consumer behavior studies and to obtain exactitude in the findings. At present tumultuous patterns of the markets require the companies to keep a sharp eye on consumer retention, customization of offerings and one-to-one marketing. 

Keywords: Consumer Behavior, Customer Relationship Management, Consumer Decision Making.

Advertising: Exploring Consumer Emotions

Advertising in itself carries huge implications of creativity and evolution. Being a crucial part of wholesome IMCs (Integrated Marketing Communications), advertising enjoys crucial position within the domain of marketing. It has always been a non-personal paid pattern of ideas and propositions that back up and support the concepts of products and services offered by organizations. The information and promotional gimmicks are communicated to the targeted audience through certain extent of use of visual, verbal, and textual media. There is always an identified sponsor behind the making of advertising messages and the use of emotions come into play in accordance with the end results in perspective. 

On the part of emotional response is that the advertising’s real essence is of creating and understanding the target audience. This understanding is intended to create positive vibes for consideration of the product and service in view. As it has been established through researches and expert observations, the marketing theory has always been mostly influenced by consumers’ attitude-towards-the-advert. The attitude towards the ads helps shapes up the perception of those customers for consumption of particular item thus it is surely linked to the attitude towards ad that how buyers figure out the whole product or service. As we can illustrate that consumer buying behavior is based on the concept and idea that he/she simply decided to purchase a product or service at the spot. The major aim of advertising is to create positive attitude towards the ad and the brand until consumer purchases that product and through this positive attitude create emotional response in the mind of consumer That is why basic aim of advertising to encourage people to buy things and creates awareness.

Traditional attitude theory describes that consumer behavior is recognized for its future implications as soon as the customers choose the brand to pick it up from the shelf against financial transaction. It is usually believed that consumers buy the brands that they like and the other arguments also abound that consumers might be someone else for the product or service being purchased. For the second part, the consumers might be buying the products or services for those who prefer the particular brand so in this case the emotional connection cannot be ascertained. Further the attitude per se can be regarded as a behavioral proposition based on acquisition from the outer world so there also is somewhat strong indication towards the authenticity of affective behavioral response in consumer behavior literature. The behaviors of consumers are acquired from the environ as they all interact with different advertising messages and also with different influential circles thus ending up with considerable magnitude of external influences. 

According to Schiffman (2001), the emotional response is pivotal for producing certain kind of behavior in the target customers and following are few factors that work in this regard:

• Pleasure: the state in which person feel good, happy, or joyful in a particular situation. 

• Arousal: the state of feeling that is varying from person to person in different situations i.e. feeling of excitement, active, bored, or sleepy. 

• Dominance: this defines individual feelings, which are in control of or free to act in a particular situation. 

Consumers can be subjected to the advertising messages on daily basis so much so that there are certain ads that attract or start attracting the consumers’ attention and resultantly become preferable ads to watch. This in turn leads to the selection of those brands when consumers go shopping. The theoretical implications of marketing suggest that consumer really go to buy the brands that they prefer to watch ads of and this is something that deeply connects with the provisions of ‘actual buying behavior’ as it is mooted in formal marketing literature from around the world.

In addition the individual customers buy on the basis of impulse and they are usually influenced by the emotional make up as normal human beings have always been. There can be several attributes that can be enumerated to relate to the brand exclusively but the importance of visual and emotional appeal of ads cannot be disregarded in comparison. While advertisements’ appeal is more cogent for the audience that is subjected to the advertising messages most of the times through different media. There are several brand associations that the marketers try to come up with and the value of brand recall increases with the passage of time provided the consumers evolve positive feelings regarding the advertising messages that they frequently see on different media they consume. Emotional advertising is considered an effective tools, since consumer ultimately gives emotional response to product. Normally, a positive relationship between visual, verbal and text intensity of media and emotional response has been found.

Keywords: Advertising , Emotions, Marketing Communication , Integerated Marketing Communication, Traditional Attitude Theory

Marketing Communication Shaping Consumer Behavior

Marketing communications have always been important in survival and growth of the business. The role of marketing communications in shaping and influencing the consumer behavior has been prominent for ages now. The importance of shaping consumer behavior among marketing communications has assumed much significance than ever before provided the mayhem in the markets. As marketplace has saturated with multiple brands in same categories of products and services compete and spoilt consumers for choices. Marketers have always been burdened with taxing jobs of researching markets and consumer behavior and tailor marketing communications plans and programs accordingly.

Moreover, the role of marketing communications has become more robust in the wake of advent of internet and social media communications. The  multitude sources of information available to consumers has actually made the turf of marketing communications more demanding and detail oriented. The level of volatility in consumer behavior has gone from bad to worse as and this is the reason the marketing communications have gained the status of most instrumental business area in the corporate scenario. The new era of information influx requires the marketing communications anew and therefore the concepts of consumer generated marketing and customer centered brand managements are rearing heads to rule to roost. Elaborating the evolution of novel approaches in marketing communications for the consumers of late. It can be discussed that there is a kind of "always on" communication system shaping up between the most outspoken and committed of the tech-minded users. It is in connection with understanding of consumer behavior that the marketers get engaged in several activities pertaining to honing and strengthening communications of marketing. 

Marketing communications merit certain level of data researched regarding the present consumer behaviors and attitudes. It is of view that IMCs (Integrated Marketing Communications) in present corporate world take in consideration a great deal of data to segment and target markets suitable for the proposition in view and the positioning is carried out in accordance with such categorization of the markets.  Reaching consumers at all those moments when their decisions are most affected and influenced.  This pattern of exercising influences evident by an example of consumer electronics companies that ensure not only that customers see their televisions in stores but also that those televisions display vivid high-definition pictures. It’s why Amazon.com, a decade ago, began offering targeted product recommendations to consumers already logged in and ready to buy. And it explains P&G’s decision, long ago, to produce radio and then TV programs to reach the audiences most likely to buy its products—hence, the term - soap opera. It has been a common perception that pervades within the marketers from across the globe and that is: Seek the moments and touch points that bring consumers closest to the marketing communications or advertisements to exercise maximum influence on consumers’ thought processes.  

Marketing professional have worked on few of the ground breaking models that are likely to be applied to consumer decision making processes in relation to the marketing communications and the touch points. Among various models of consumer decision making process, one is based on a metaphor – funnel. The premise of this school of thought is that consumers actually make their journey from various alternatives to few and then to the selected one while deciding upon the items for purchase. It states that most of the times the consumers start thinking of alternatives that they want to buy first and then go through a mental process of omission of alternative until they reach most likely few. This is the touch point among many others that the marketers try to tap with marketing communications as consumers are to be directed at this juncture of selecting alternatives. Branding, comes to fore while the consumers are going through the funneling process in their minds casting away certain brands and considering the remaining few. But it is of concerns that the funnel concept has now taken jolts for its inadequateness as market is more proliferated than ever with most competitive offerings. The influx of information has made the matters more troubled for marketers to concentrate their efforts before well informed customers. 

Shaping up the consumer behavior requires great deal of effort from the marketers’ end as the approach has not been linear anymore. The decision making process carried out by the mental faculties of consumers is far complex than previously considered decision making patterns. Therefore it can be illustrated that marketing communications take in consideration the consumer behavioral patterns and consumer decision journey is indeed the most mooted and discussed area in marketing literature. The situation gets even complicated for marketers to align and meet changing market needs.

Keywords: Marketing, Marketing Communication, Consumer behavior, Metaphor – funnel, Integrated Marketing Communication