CUSTOMER VALUE IN ORGANIZATIONAL BUYING: A MEANS-END APPROACH

There has been a lot of interest among marketing practitioners and researchers in the concept of value perceptions of customers related to a product or service because the ability to create superior customer value is considered to be a prime source of sustainable competitive advantage for businesses (Porter, 1985). Despite the growing interest, there is a dearth in research on customer value as a construct and its role in organizational buying. The purpose of this research was to expand our understanding of what organizational customers value in a product or service and why they value what they do while making buying decisions.The basic premise of the marketing concept is that a product (or a service) is a bundle of physical and perceived attributes, which provides a customer with a bundle of physical and perceived benefits to satisfy his/her needs and goals. This is also a central tenet of the means-end theory (Peter & Olson, 1993) which implies that what attributes a customer values (considers important) in a product is connected to those benefits derived from it that facilitate achieving his/her end goals as perceived by the customer. Because of its ability to provide a deeper understanding of the customer decision making process, this study used the interviewing and data analysis technique called laddering based on the means-end theory (Reynolds and Gutman, 1988). Total 60 customers of a piece of telecommunication equipment code named prontom were interviewed in 40 organizations from the names provided by a prontom manufacturer code named Skycorp. The interview data were coded in specific categories of attributes (A), benefits (B), and end goals (E) as explained by Reynolds and Gutman (1988) to create an implication matrix. Such a matrix shows the number of links among A, B, and E, which Woodruff and Gardial (1996) called customers value dimensions underlying prontom buying decisions. A framework of customer value in organizational buying was proposed based on the analysis and classification of the value dimensions, means-end theory, and marketing literature. In addition, A, B, E derived were further analyzed for different segments using proportions and cluster analysis.This research is a step toward bringing out some of the sources and contents of customer value in organizational buying and toward developing a testable framework of value to help business marketing practitioners and researchers better understand the organizational buying process.