Alternative views on value and creative value design

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1 1 (23) January 5, 2015 Alternative views on value and creative value design Irma Tikkanen University of Eastern Finland, Faculty of Social Sciences and Business Studies, Business School Abstract Purpose The purpose of this paper is to explore, what kinds of alternative views on value emerge in B-to-B and consumer markets based on the research published in academic journals and books between 1959 and Creative value design tools and methods are linked with each view. Design/methodology/approach Historic foundation of the term value was presented in brief. The secondary data included 59 articles and 17 books published between 1959 and The articles presented nine disciplines. The definitions of value were classified according to similar views. A marketing school of thought or a school of thought in strategic management behind each view was indicated. Findings Eight alternative views on value emerged, which were linked with creative design tools and methods suggested in one article. Subsequently, the alternative views on value were classified according to goods-dominant logic and service-dominant logic, as well as industrial view on value and customer view on value. Moreover, eight concluding statements on value design were suggested based on the results. Research limitations - The related concepts such as utility, price, quality and satisfaction are not discussed, because they are different concepts. Practical implications The results provide ideas for the business managers and designers on how to increase the value by design, when the searched type of value is first explored. A deeper theoretical view on value from the perspectives of manufacturers, service providers, B-to-B customers, and consumers was achieved. Originality/value The eight alternative views on value give an overview on value both from the suppliers and customer s point of view. The views also indicate how the values differ when comparing the views of the manufacturer/supplier to the business customer and the consumer.

2 2 (23) Understanding those views is important in the value system including supplier s suppliers and business customer s customers, and when moving from goods-dominant logic to service dominant logic in the same value system. The results offer tools for business managers to analyse, plan, and implement actions to add the value for various actors, and increase the customer value to the company. Keywords B-to-B, Consumer, Design, Value Paper type Literature review Introduction During the last decades, the concepts of value-added, value creation and value both in B-to-B and consumer markets have formed interesting topics in academic research. The number of published articles has increased especially since 2000 focusing on value, creation, and dimensions, especially with respect to services. In 1961, Miles (1961; ref. Lindgreen and Wynstra, 2005) noticed that the value to the producer means something different from the value to the user. Later, Porter s (1980, 1985) books increased the understanding on how to compete against competitors and conversely how to create value for customers through both primary and support activities in the value chain. Since then, value chain, value added, value activities, value system, and value have become familiar for both researchers and practitioners. Porter s (1985) value chain was a starting point for the broader discussion on value and value creation. According to Ravald and Grönroos (1996), the concept of value is multifaceted and complicated and there is an evident risk that the concept is used without any efforts and commitments to understand really what it means to provide value to customers, how added value should be related to customer needs and the achievement of profitability for the parties involved. Lindgreen et al. (2012) provided an overview of research on the value that business and industrial marketers analyze, create, and deliver. As the result, the extended value framework including analysis, creation and the delivery was proposed. However, there currently exists no agreed list or typology of customer value (Bradley and Sparks, 2012), although a few typologies of value have been proposed earlier.

3 3 (23) This paper presents the alternative views on value by analysing the definitions of value and utilizing scientific articles and academic books as the secondary data. In addition, creative value design methods and tools are linked with each view, and concluding statements on value design are suggested. The research questions read as follows: What kinds of alternative views on value emerge in the selected academic journals and books published between 1959 and 2013? What kinds of creative value design tools and methods are proposed for each alternative view on value? How the alternative views on value can be classified into industrial and consumer perspectives? What kinds of concluding statements on value design can be drawn based on the results? The related concepts such as utility, price, quality and satisfaction are not discussed, because they are different concepts (cf. Sánzhes-Fernández and Iníesta-Bonillo, 2006). The study excludes also how to measure value. Historic foundation of the term value in brief Sánzhes-Fernández and Iníesta-Bonillo (2006) wrote that the term value has its roots in many disciplines including psychology, social psychology, economics, marketing, and management (Woodruff and Gardial, 1996). Ramírez (1999) made a comprehensive analysis about the historical roots of value dating back to the ancient Greeks. Then moral philosophy studied the terms of moral and economic values, and ethical aspects of value. Moreover, the terms of utility value and exchange value date from hundreds of years ago. Also Vargo et al. (2008; Aristotle, 1959; Fleetwood, 1997) refer to the Aristotle, who distinguished two kinds of value, namely use-value and exchange-value. Use-value was defined as a collection of substances or things and the qualities associated with these collections. However, Aristotle did not define exchange-value. Bowman and Ambrosini (2010) defined use values as properties of products and services that provide utility. Inputs into the productive process take the form of separable use values, e.g. components such as flour or steel and human inputs. Bowman and Ambrosini (2010) also defined value-in-exchange as a monetary amount exchanged between the firm and its

4 4 (23) customers or suppliers when use values are traded. Use values are converted into value-inexchange when they are sold in factor markets or product markets. Later terms related to value are value-in-use and value-in-offering (cf. Ngo and O Cass, 2010), perceived value (cf. Ravald and Grönroos, 1996; Zeithaml, 1988), value in the experience (cf. Helkkula et al., 2012), and relationship value (cf. Barry and Terry, 2008). Methodology 59 academic articles and 17 books discussing the concept of value were utilized as a secondary data. The articles and books were published as follows: in 1950 s (one book); in 1960 s (one article, two books); in 1980 s (one article, 3 books); in 1990 s (9 articles, 10 books); in 2000 s (33 articles, 1 book); and in 2010 s (15 articles). The articles were searched out in the scientific journal s data banks (Emerald, ABI/Inform) by using keywords, e.g. value; customer value; consumer value; perceived value; value dimensions; value chain; value creation; co-creation; and co-production. Many articles and books were familiar for the author based on previous studies, teaching, and research. The 59 articles were included in 38 journals as follows (Table 1): Business European Business Review (4) Harvard Business Review (1) Journal of Business Research (1) Management European Management Journal (1) International Journal of Value Based Management (1) Journal of Management History (2) Management Decisions (1) Sloan Management Review (1) Strategic Management Journal (1) Marketing Academy of Marketing Science Review (1) European Journal of Marketing (1) Industrial Marketing Management (3) International Journal of Bank Marketing (1) International Marketing Review (1) Journal of Advertising Research (1) Journal of Brand Management (1) Journal of Business & Industrial Marketing (3) Journal of Consumer Marketing (2) Journal of Consumer Satisfaction, Dissatisfaction and Complaining Behavior (1) Journal of Fashion Marketing and Management (1) Journal of Marketing (3) Journal of Marketing Theory and Practice (1) Journal of Retailing (1) Journal of the Academy of Marketing Science (2) Marketing Theory (4)

5 5 (23) Services Marketing Journal of Service Management (1) Journal of Service Research (2) Managing Service Quality (5) Tourism International Journal of Hospitality Management (1) Journal of Leisure Research (1) Journal of Travel Research (1) Tourism Management (2) Production, Operations, Supply Chain International Journal of Operations & Production Management (1) Journal of Supply Chain Management (1) World Class Design to Manufacture (1) Other Journal of Economic Psychology (1) Journal of Economics (1) The Asian Journal of Quality (1) Table 1. Disciplines and journals of the articles The definitions of value were listed with authors. After that, they were categorized into eight alternative views on value based on the author s subjective decision and theoretical understanding. Furthermore, based on Lee and Park s (2006) article, the tools and methods in creative value design suitable for each view were proposed. Results As the answer to the first research question, the eight alternative views on value are presented next. Both a marketing school of thought and/or a strategic school of thought behind each view are indicated. Value, competitive advantage, competitive position value-in-exchange, value-in-offering In this view the main contributor is Porter (1985, 3), who concluded that competitive advantage grows fundamentally out of value a firm is able to create for its buyers that exceeds the firm s cost of creating it. Value was defined by Porter (1985, 3, 38) as what buyers are willing to pay, and superior value stems from offering lower prices than competitors for equivalent benefits or providing unique benefits that more than offset a higher price. Value is measured by total revenue, a reflection of the price a firm s product commands and the units it can sell. Value, instead of cost, must be used when analyzing the competitive position since firms often deliberately raise their costs in order to set a premium price via differentiation.

6 6 (23) There is both a process and an output view to value creation. Value is added in the value chain including primary and support value activities. The output from the process is either cost advantage or differentiation advantage, depending on the competitive scope, and total revenue. Created value for a buyer justifies a premium price through two mechanisms: by lowering buyer costs or by raising the buyer performance. The firm s product represents a purchased input into a buyer s value chain. (Porter, 1985) Competition between competitors within an industry is a dominating viewpoint and the emphasis is on the manufacturer s business strategy. The customer s view is embedded when selecting an industry segment and its focus (cf. Porter, 1980). Ngo and O Cass (2010) call this value-in-offering perspective, where a firm is an operant resources integrator. Moreover, this view focuses on value, which comprises costs, prices, and revenues compared to the competitors ( value-in-exchange ). This view can be classified into Positioning School of Thought in strategic management, and the main discipline is economics (cf. Moussetis, 2011; Mintzberg and Lampel, 1999; Fredrickson, 1990, ). Value of product offering value-in-offering, value-in-use This view originates from the marketing mix proposed by Borden (1964) and its focus remains on the product. Levitt (1969; Lindgreen and Wynstra, 2005) defined the consumer value or the usefulness of a product to the individual or household consumers as depending on the product attributes and how they translate into a certain value or usefulness. According to Grönroos (2006), in the notion of value-in-exchange, the exchange of readymade value embedded in products for money is considered the central phenomenon to the marketing study. There is no value for the customers until they can make use of a product. Value is not what goes into goods and services; it is what the customers get out of them; in other words, the value emerges in the customers space rather than in the producer s space. Product offering is seen as a value carrier, and the value is perceived by the customers as a greater net value than the offerings of the competitors (cf. Ravald and Grönroos, 1996). Ravald and Grönroos (1996; Zeithaml, 1988) defined that perceived value is the consumer s overall assessment of the utility of a product based on a perception of what is received and what is given. Customer-perceived value of an offering is related to customer s own value chain and remains situation-specific (Ravald and Grönroos, 1996). Woodall (2003, 21) defined that a

7 7 (23) personal perception of advantage arises out of a customer s association with an organisation s offering. Ruiz et al. (2008) explored that the value consumers derive from a product or service includes a range of tangible, social, emotional, and other advantages (Smith and Colgate, 2007; Sparks et al., 2008; Woodall 2003). In this approach, there is both the supplier s ( value-in-offering ) and the customer s ( value-inuse ) view towards value which is derived from the product offering and its attributes. This approach emphasizes costs and financial benefits; the product value consists of the cost of the product plus a subjective marginal value; and the perceived net value remains higher than the offering from the competitors. Firstly, this view is classified into Managerial School of Thought due to product offering as an element of the marketing mix (4P) and price and cost of the product. Secondly, into Buyer Behaviour School of Thought (cf. Lagrosen and Svensson, 2006; Sheth et al., 1988), because the customer derives value from the product offering indicating e.g. economic, psychological and social dimensions. Value in customer-supplier relationships (dyad) - relationship value This view originates from the discussion on buyer-seller relationships (cf. Ford, 2004), where the total episode value is described as a function including both episode value and relationship value. The total episode value comprises episode benefits plus relationship benefits divided by episode sacrifice plus relationship sacrifice (Ravald and Grönroos, 1996). Lindgreen and Wynstra (2005; Walter et al., 2001) made a distinction between direct functions and indirect functions of relationships. The direct function of customer relationships comprises the profit function, volume function, and safeguard function. Indirect functions in customer relationships include the innovation function, market function, scout function, and access function. The direct function and indirect function form the bases for supplier-perceived value. Terpend et al. (2008) developed a histogram of the four types of value from buyer-supplier relationships. The results revealed that in the late 1980 s research almost entirely focused on operational performance; integration-based research began in the early 1990 s; capability-based research emerged during the late 1990 s; and financial performance did not become a major focus until the early 2000 s. Hammervoll and Toften (2010) distinguished between valuecreation in transaction-based arrangements and value-creation in interaction-based relationships.

8 8 (23) In the former, value-creation initiatives aim to reduce logistical costs or improve logistical performance; whereas in the latter, value-creation initiatives require a cooperative response from the exchange partner to create value. Barry and Terry s (2008) findings confirmed that commitment and intentions are influenced by relationship value, which is impacted by benefits such as performance, efficiency, and reliability as well as comparative costs and switching costs. In this view, value is derived from the transactional exchanges emphasizing cost efficiency or from the dyad relationship-based exchanges emphasizing knowledge, capabilities, and information sharing. This view on value ( relationship value ) can be classified into Relationship Marketing School of Thought (cf. Lagrosen and Svensson, 2006). Value in B-to-B markets (triad, network) value-in-exchange This view originates from an industrial network model (activities-actors-resources) by Håkansson and Johanson (1992). The emphasis is placed on interaction and relationships within a network with multiple actors. The value concept is closely linked to the exchange theory of marketing (Eggert and Ulaga, 2002). Miles (1961; Lindgreen and Wynstra, 2005) distinguished between four kinds of value: use value; esteem value; cost value; and exchange value. Anderson and Narus (1998) defined the value in business markets to be the worth in monetary terms of technical, economic, service, and social benefits a customer company receives in exchange for the price it pays for a market offering. Value is what a customer receives in exchange for the price it pays. Chandler and Vargo (2011) defined a particular context as a set of unique actors with unique reciprocal links among them. Individual actors pursue value through service-for-service exchanges that are the basis of a dyad, triads, complex networks, and service ecosystems. The product value to the buyer and buyer s value system consists of the cost of the product plus a subjective marginal value (cf. Neap and Celik, 1999; Lindgreen et al., 2012). The perceived value consists of the following three elements: perceived benefits of the product minus both the product price and the costs of owing it (Lindgreen et al., 2012). This view can be classified into Industrial Marketing School of Thought (cf. Lagrosen and Svensson, 2006), where the emphasis is on exchange and economic interaction between triad or

9 9 (23) network partners and where the base discipline is economics (cf. Moussetis, 2011; Mintzberg and Lampel, 1999). Value proposition to the customer value-in-offering In this view, the main contributor is Aaker (1996, 95) and brand identity system. A brand s value proposition is a statement of the functional, emotional, and self-expressive benefits delivered by the brand that provide value to the customer. Aaker (1996, 81) continued that value is closely related to quality; it enriches the concept by adding the price dimension. Rintamäki et al. (2007) included also economic benefits in a value proposition. A productrelated attribute can create a value proposition by offering something extra or by offering something better (Aaker, 1996, 80). According to Grönroos (2006), a proposition should be a suggestion and a value proposition a suggested value. Kotler and Keller (2006, 25) found that value reflects the perceived tangible and intangible benefits and costs to the customers. Value can be primarily seen as a combination of quality, service, and price, thus being called the customer value triad. Johnson et al. (2006) suggested that from the introduction to the growth stage of a life cycle, managers must adapt from improving value per se to directly measuring and managing relationships and brands. Ngo and O Cass (2010) included brand equity (as an asset) into value-in-use perspective, but in this paper value proposition is included into value-in-offering perspective, because a brand marketer s viewpoint is prevailing. This view can be classified into Managerial School of Thought (cf. Lagrosen and Svensson, 2006), where the supplier is the producer of the value, which is promised and delivered to customer in the form of a brand s value proposition. Service value value-in-use, value in the experience This view originates from the three schools of service marketing, namely American, French, and Scandinavian (cf. Lagrosen and Svensson, 2006; Grönroos, 1990). Ballantyne and Varey (2006), who explored value creation through marketing interaction, found that service value is determined at the time of its use, as value-in-use. According to Grönroos and Voima (2012), in the customer-grounded view, the value-in-use that emerges for the customer appears as a function of the customer s experiences and logic. The notion of value-in-use as the extent to which a customer becomes better off could be analyzed on multiple dimensions.

10 10 (23) Ngo and O Gass (2010) determined service value as value-in-use. Sandström et al. (2008) linked service experience to value-in-use arguing that value in use is the cognitive evaluation of the service experience. Sandström et al. (2008) also introduced a framework for how the total service experience including functional and emotional dimensions is linked to value in use through individual and situational filter. There is both a process and an output view to value. Heskett et al. (1997) proposed a serviceprofit chain, where the service concept creates service value to the customers resulting from customer s satisfaction and loyalty, and for the producer revenue growth and profitability. The article of Helkkula et al. (2012) adopted a phenomenological perspective and conceptualized value in the experience as an intrasubjective, socially intersubjective, context- and situationspecific phenomenon that is both lived and imaginary, constructed based on previous, current, and imaginary future experiences and is temporal. Then value resides not in the object of consumption, but in the experience of consumption (cf. Frow and Payne, 2007, 91). Also Grönroos and Voima (2012) adopted the process view to value. The customer creates value through past, current, and/or imagined future experiences in a temporally fluctuating individually and socially accumulated process. The firm produces resources and processes that represent potential or expected value-in-use. The provider sphere generates potential value, which customers later turn into real value (-in-use). (Grönroos and Voima, 2012) The view can be classified both into Services Marketing School of Thought and Relationship Marketing School of Thought (cf. Lagrosen and Svensson, 2006), because value might be cocreated in the joint sphere (cf. Grönroos and Voima, 2012). Consumer value - multidimensional perceived value This view originates from the consumer s buying behaviour. Zeithaml (1988) produced four different definitions for value: 1. value is low price; 2. value is whatever I want in a product; 3. value is the quality I get for the price I pay; and 4. value is what I get for what I give. Bradley and Sparks (2012) defined that value is a benefit or advantage, something consumers prize over other things. It is a subjective, contextually based, comparative judgment that varies widely between individuals, between groups, and over time. Gallarza and Gil Saura (2006) concluded that the consumer value concept has evolved from the development of two pivotal dimensions of the consumer behaviour: the economic and the psychological. The term perceived value should be understood as synonymous with the consumer value.

11 11 (23) Ravald and Grönroos (1996; Monroe, 1991) defined the customer perceived value as the ratio of perceived benefits relative to perceived sacrifice. Sánzhes et al. (2006) configured perceived value construct in two parts, one referring to the benefits received (economic, social and relationships) and the other indicating the sacrifices made (price, time, effort, risk and convenience) by the customer. Perceived value is multidimensional. Sheth et al. (1991; Sweeney and Soutar, 2001) explored consumer perceived value and introduced PERVAL scale including four dimensions: emotional, social and two types of functional value (price/value for money and performance/quality). Holbrook (1999, 5, 12) developed a typology of consumer value including two- and three dimensional conceptual framework of consumer value as follows: self-oriented (active/reactive) and other oriented (active/reactive) vs. extrinsic and intrinsic. The typology included the following eight types of consumer value: efficiency, excellence, status, esteem, play, aesthetics, ethics, and spirituality. Bradley and Sparks (2012) introduced value dimensions proposed to pertain to a single product to vary between one and over a dozen. The nature of these value dimensions also varies: the types commonly proposed include monetary, functional, emotional, prestige/reputational, and symbolic/self-expressive features (see e.g. Gallarza and Gil Saura, 2006; Holbrook, 1999; Lemmink et al., 1998; Petrick, 2002; Sanzhes et al., 2006; Ruiz et al., 2008; Sweeney and Soutar, 2001; Woodall, 2003). There is also a process view to perceived value. Sánzhes et al. (2006; Ravald and Grönroos, 1996) defined that perceived value is a subjective construct in several senses: it varies between customers, cultures, and different times. This last appreciation conceives the perceived value as a dynamic variable, experienced before the purchase, at the moment of purchase, at the time of use, and after use. Lindgreen et al. (2012) developed the extended value framework matrix (7 x 3) including analysis, creation, and delivery. Heinonen (2004) found that time and location should be included in service design decisions, and no longer focus on process and outcome aspects of service delivery. Bradley and Sparks (2012), who refer to Grönroos (2008); Payne et al. (2008); Smith and Colgate (2007); Vargo and Lusch (2004); Woodall (2003); and Zeithaml (1988), view consumer

12 12 (23) value as a property inherent in the product; as resourced, facilitated, and/or created by firms and their marketers; as derived by consumers through product purchase, use, and/or experience; and as co-created through interaction and dialog between producers and consumers. This view can be classified both into Buyer Behaviour School of Thought (cf. Lagrosen and Svensson, 2006; Sheth et al., 1988), and Social Exchange School of Thought (cf. Sheth et al., 1988), because these schools of thought approach the consumer not only as the economic man, but theories are applied from the fields of psychology, sociology, and anthropology. Value of a customer to the firm relationship value Reichheld (1996; ref. Lindgreen et al., 2012) concluded that the existing customers are valuable assets to a company. Some customers have a greater net present value than others, and retention of unprofitable customers destroys the value. Lindgreen and Wynstra (2005) also saw the customers as valuable assets because maintaining existing customers is often more profitable than gaining new ones. The economic value of the customers is an output of the value-creating process; customers are valuable to the company only if the company has something of value to offer them. Kumar et al. (2012) proposed four components of a customer s engagement value with a firm. The first component consists of the customer lifetime value (the customer s purchase behaviour), the second is called the customer referral value (as it relates to incentivized referral of new customers), the third is the customer influencer value (which includes the customer s behaviour influencing other customers that is increasing acquisition, retention, and share of wallet through word of mouth between existing customers as well as prospects). Finally, the fourth aspect consists of customer knowledge value (the value added to the firm by feedback from the customer). This view can be classified into Relationship Marketing School of Thought (cf. Lagrosen and Svensson, 2006), because it emphasizes relationships with customers as intangible assets (cf. Galbreath, 2002). Eight alternative views on value and creative value design Lee and Park (2006) concluded that the creation of new value is necessary to ensure the survival of a company. When designing new product offerings, it is necessary for the designer to explore,

13 13 (23) identify and understand the searched value and its dimensions in order to create the product offering that meets the needs and expectations of the consumers, business customers, and the manufacturers. Lee and Park (2006) defined a creative value innovation strategy as a concrete method of creating value, and illustrated tools and methods in creative value design. The answer to the second research question is given in Table 2, where those tools and methods are linked with each alternative view on value. Alternative views on value and their key characteristics Value, competitive advantage, competitive position value-in-offering, value-in-exchange - lower prices compared to competitors (cost advantage) - differentiation with unique benefits (differentiation advantage) - value is measured by total revenue - value is created in the process composing of primary and support activities (value chain) Value of product offering - value-in-offering, value-in-use - differentiation of the product through product attributes creating value - product value equals the cost of the product plus a subjective marginal value - customer-perceived value of an offering has to be suitable to customer s value chain being situation-specific - value include tangible, social, emotional and other characteristics of the product as perceived by the customer Value in customer-supplier relationships (dyad) relationship value - total episode value = episode value and relationship value - direct function and indirect function form bases for supplier-perceived value - four types of relationship value: operational performance, integration-based value, capabilitybased value, financial performance - performance, knowledge, information sharing, innovations Value in B-to-B markets (triad, network) valuein-exchange - value in exchange vs. price; costs plus subjective Tools and methods in creative value design - Customer s requirement value analysis (Lee and Park, 2006): It is important to develop products that can satisfy customer needs after understanding the characteristics of the predefined customers. - Creative value quality design (Lee and Park, 2006): After deciding the product s design and quality of components, all steps, including design of the manufacturing line and process, are systematically developed and planned. - Creative value concept design (Lee and Park, 2006): To develop products that customers want to have, target specifications should be established after collecting and analysing customer needs. - Creative value quality design (Lee and Park, 2006): Customer needs are switched to product characteristics. - Customer s requirement value analysis (Lee and Park, 2006): It is important to develop products that can satisfy customer needs after understanding the characteristics of the predefined customers. - Customer function value analysis (Lee and Park, 2006: Data is collected so that we can clearly understand the structure of the problem that should be solved. - Customer s requirement value analysis (Lee and Park, 2006): It is important to develop products that

14 marginal value - use value, esteem value, cost value, exchange value - technical, economic, service, social benefits - operational performance, integration, capability, financial performance Value proposition to the customer value-inoffering - value proposition is a statement of the functional, emotional, self-expressive, and economic benefits - value = perceived tangible and intangible benefits and costs Service value value-in-use, value in the experience - multiple dimensions of value-in-use - the experience of consumption value in the experience - value creation in service-profit chain; past, current and future experiences - value creation in the joint sphere in the service profit chain Consumer value multidimensional perceived value - value = perceived benefit or advantage - perceived value = emotional, social, functional - consumer value = efficiency, excellence, status, esteem, play, aesthetics, ethics, spirituality - consumer s perceived value and its dimensions (economic, psychological, social, relationship) vs. sacrifices - value is co-created through interaction between producers and consumers Value of a customer to a firm relationship value - four components of a customer s engagement value with a firm: customer lifetime value; customer referral value; customer influencer value; customer knowledge value - net present value - the economic value of customers is an output of the value-creating processes - customers as valuable assets: economic value and maintaining existing customers are often more profitable than winning new ones. 14 (23) can satisfy customer needs after understanding the characteristics of the predefined customers. - Customer function value analysis (Lee and Park, 2006: Data is collected so that we can clearly understand the structure of the problem that should be solved. - Customer s market value analysis (Lee and Park, 2006): Market is a gathering of products and brands that can satisfy customer s needs. - Customer s satisfaction value analysis (Lee and Park, 2006): How high customer satisfaction can increase or decrease when customers experience products or services. - Creative value concept design (Lee and Park, 2006): To develop products that customers want to have, target specifications should be established after collecting and analysing customer needs. - Customer s image value analysis (Lee and Park, 2006): The analysis method of the human multiemotions that are felt from images or feelings of products by customers. - Customer s requirement value analysis (Lee and Park, 2006): It is important to develop products that can satisfy customer needs after understanding the characteristics of the predefined customers. - Customer function value analysis (Lee and Park, 2006: Data is collected so that we can clearly understand the structure of the problem that should be solved. Table 2. Eight alternative views on value linked with tools and methods in creative value design

15 15 (23) Industrial and customer view on value As the answer to the third research question, the industrial and customer view on value based on goods-dominant logic and service-dominant logic are presented in Table 3. In goods-dominant logic, the creator of value is a firm linked with supplier s and customer s supply chain, and in service-dominant logic, the creator of value is a firm, network partners, and customers (Vargo et al., 2008). Ramírez (1999) presented two views of value production, namely industrial view and co-productive view. The industrial view is based on Porter s (1985) value chain, where value is added. Values are objective (exchange), and subjective (utility). In co-productive view, values are co-invented, combined and reconciled, and values are contingent, and actual. According to Ramírez (1999), value co-production emphasizes the roles of economic actors to a single counterpart and to different counterparts. Grönroos (2011) developed a value-in-use creation model clarifying the roles of service providers and customers in value creation. In the production phase, service provider is a value facilitator; in the interaction phase, customer participates as a co-producer in the joint production process and the provider participates as cocreator of value with the customer; and in customer s value creation phase customer is and independent value creator. Goods-dominant logic Industrial view on value: value added (manufacturer s view) Use value Service-dominant logic Industrial view on value: co-invented, coproduction (manufacturer s and B-to- B customer s view) Customer view on value: co-production, co-creation, value creation Value-in-exchange Value-in-exchange Value-in-use Value-in-offering Relationship value Multidimensional perceived value Value proposition Value in the experience Table 3. Industrial and customer view on value including alternative views on value The industrial view on value has a manufacturer s view on value, where use value is transformed into value-in-exchange, value-in-offering, and value proposition. In B-to-B markets, industrial view emphasizes value-in-exchange and relationship value targeting coinvention and co-production. In customer view on value, value-in-use, multidimensional perceived value and value in the experience are subjective, and value is produced by coproduction, co-creation or customer s own value creation.

16 16 (23) Mustak et al. (2013) synthesized extant research on customer participation and value creation. Value outcomes for the seller were economic value, relationship value, value related to innovation and development, and negative value outcomes. Value outcomes for the customer were superior value though better fit of the offering, economic value, and skill enhancement to accrue value from an offering. Those findings partly support the results in Table 3. Concluding statements on value design As a conclusion and the answer to the fourth research question, the following concluding statements on value design are suggested based on the eight alternative views on value and tools and methods in creative value design supported by the previous studies. The concluding statements provide directions for the business managers what they should do to create value for the customers (cf. Sánzhes-Fernández and Iníesta-Bonillo, 2006). P1: When targeting competitive advantage, competitive position in an industry and total revenue, the predefined customers needs have to be satisfied in product offering ( valuein-offering ) by product design and quality of components including design in the value chain in order to create value added and superior value to the customers in the form of lower prices or unique benefits ( value-in-exchange ) (cf. Lee-Mortimer, 1994). P2: When creating product offering by differentiation and customization, customer s needs have to be analysed based on collected data, and the customers tangible, social, emotional and other needs and perceptions of the product have to be incorporated into the product as attributes ( value-in-offering ) in order to create value ( value-in-use ) to the customers (cf. Miller et al., 2005; McEachern and Schröder, 2004). P3: When co-inventing a product solution in a dyad customer-supplier relationship, customer s requirements and functions have to be analysed in order to understand the structure of the problem to be solved and to co-produce searched total episode value ( relationship value ) (performance, knowledge, information, and innovations) (cf. Barry and Terry, 2008). P4: When co-inventing a product offering to B-to-B markets (triad, network), the customer s structure of the problem should be understood in order to that it could be solved by integrating design and customer s business which emphasizes the searched value ( value-in-

17 17 (23) exchange ) (product, operational, integration, capability, financial performance) (cf. Abecassis- Moedas, 2006; Mascarenhas et al., 2004). P5: When creating a competitive value proposition statement ( value-in-offering ) to the customers, their needs and experiences have to be analysed including functional, emotional, self-expressive and economic benefits and integrate them into the product attributes by design in order to satisfy customers (cf. Rintamäki et al., 2007). P6: When creating a service offering to the customers, data from customers experiences and needs on services have to be collected and analyzed in order to find out how customer satisfaction can be achieved by co-creating service elements with customers in the service profit chain emphasizing multiple dimensions of value-in-use and value in the experience (cf. Teixeira et al., 2012; Edvardsson et al., 2010). P7: When co-creating the product offering through interaction between producers and consumers, their multidimensional and multi-emotion perceptions of value ( multidimensional perceived value ), images and feelings of products and services (economic, psychological, social, functional) have to be incorporated into the design of products and services (cf. Roig et al., 2006). P8: When increasing the value of the customers ( relationship value ) to a firm as valuable assets, it is important to co-invent products that satisfy existing customers needs and problems to be solved (cf. Tukel and Dixit, 2013). Discussion and implications The definitions of value indicated the output value derived from the product, offering, brand, service or the output from the value creation processes or customers as assets. When evaluating the contribution the paper, the following aspects could be raised. The eight alternative views on value give an overview on the theoretical discussion on value covering the last decades both from the supplier s and customer s point of view. The eight views also indicate how the values differ when comparing the views of the manufacturer/supplier to the business customer and the consumer. The understanding of alternative views on value is important in the value system including supplier s suppliers and business customer s customers. Moreover, the understanding

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