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A dual perspective of value in a bundle of product and service

Safarpour N., Sillanpää I.

Management and Production Engineering Review

2017

Vol. 8, No. 4

27--41

Focusing on value creation in marketing has always been the key to success for companies. As a result, the definition, analysis and communication of value has gained importance. Companies are making an attempt to make a value proposition that is not only lucrative for the customer, but also has great returns for the company itself. Although this might sound simple on paper, since it is the basis for business logic, it is much more complicated in real life situations. With the service elements in the offering and the emergence of technologies such as smart and connected phenomenon, the business models become more innovative and more complexity is added to the analysis of value. The objective of this paper is to introduce a method for the dual perspective of value in a bundle of product and service in a smart and connected context. This method draws from the customer value and customer lifetime value concepts to offer an all-inclusive study on value. This assists companies in crafting an appealing value proposition in a cost-saving offering for a client that offers value to the company over its lifetime. This study specifically deals with the state of the arts smart and connected phenomenon and provides a view on how value works in that context. The framework created through this study serves to help the company choose a client that is of most value to the firm over the time of their cooperation. It then leads the company towards a better fabrication of the offering that is not only an attractive proposition to the client but also for the company. It gives a close insight onto where the benefit comes from and how a smart and connected bundle of products, services and relationships must be put together for maximum results in the modern age.