The Value Map shows the current competitive position and the provided customer value of a company in a specific market segment within the dimensions of:
» Relative perceived quality
» Relative perceived price
» The fair value line
The fair value line indicates the customer’s preference in the purchase decision, that is price importance vs. quality importance. The fair value line indicates the customer’s price sensitivity in the purchase decision, i.e. price importance vs. quality importance. Price-driven markets show a flat fair value line, quality driven markets a step one. Any position on the fair value line indicates average value for money.
Customer Value is defined and measured as the perpendicular distance to the fair value line. A position to the right and below the fair value line indicates positive Customer Value, to the left negative.
So let us take a look at the value map shown above. Our Business (Us) is offering above average quality at the highest price in the market, and despite our quality position we are offering poor value for money. We therefore need to investigate the possibilities for reducing our price or improving quality. Given that Competitor C is offering significantly higher quality at a slightly lower price we probably need a combination of the two. The Attribute chart in the next section shows us where these improvements in quality could come from.« Back to Glossary Index