Customer Orientation
Activity-based management hat the objective of increasing customer value by managing activities. Customer value is a key focus because a firm can establish a competitive advantage by creating better customer value for the same or lower cost than that of its competitors or creating equivalent value for a lower cost than that of its competitors.
Customer value is the difference between what a customer receives (customer realization)
and what the customer gives up (customer sacrifice). What is received is called the total product The total product is the complete range of tangible and intangible benefits that a customer receives from a purchased product. Thus, customer realization includes basic and special product features, service, quality, instructions for use, reputation, brand name, and any other factors deemed important by customer. Customer sacrifice includes the cost of purchasing the product the time and effort spent acquiring and learning to use the product, and postpurchase costs, which are defined as the costs of using maintaining, and disposing of the product. Increasing customer value means increasing customer realization, decreasing customer sacrifice, or both.
Customer OrientationActivity-based management hat the objective of increasing customer value by managing activities. Customer value is a key focus because a firm can establish a competitive advantage by creating better customer value for the same or lower cost than that of its competitors or creating equivalent value for a lower cost than that of its competitors.Customer value is the difference between what a customer receives (customer realization)and what the customer gives up (customer sacrifice). What is received is called the total product The total product is the complete range of tangible and intangible benefits that a customer receives from a purchased product. Thus, customer realization includes basic and special product features, service, quality, instructions for use, reputation, brand name, and any other factors deemed important by customer. Customer sacrifice includes the cost of purchasing the product the time and effort spent acquiring and learning to use the product, and postpurchase costs, which are defined as the costs of using maintaining, and disposing of the product. Increasing customer value means increasing customer realization, decreasing customer sacrifice, or both.
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