Page 67 - Design for Six Sigma for Service (Six SIGMA Operational Methods)

48 Chapter Three

customers are willing to pay more to buy a product with a well-established
brand name than a similar product with no name recognition, so brand building
should be an important strategic consideration in service product design and
customer value enhancement. There are books and articles on brand strategy
and its relationship with customer value. Innovation and uniqueness is another
huge factor for customer value. Customers may be willing to pay a premium
price for a unique product or a first-of-its-kind product.

In this book, we will develop a comprehensive strategy that integrates all
these wonderful methods in order to create superior customer values for
service products. This chapter outlines this customer value creation strategy
and provides overviews for all these methods. Section 3.2 will formally
define customer value and its components. Section 3.3 will give an overview
to all relevant methods that can be used to design customer values into
service products. Section 3.4 will give a value creation road map to service
product design.

3.2 Value and Its Elements

Value is one of the most frequently used words, yet the concept of value is
one of the most confusing. The nature of value has been extensively studied
by many researchers. One school of such researchers are value engineering
or value analysis professionals.

Based on Park (1999), one of the leaders in the field of value engineering,
“Cost is a fact, it is a measure of the amount of money, time, labor, and any
other expenses necessary to obtain a requirement. Value, on the other hand,
is a matter of opinion of the buyer or customer as to what the product is
worth, based on what it does to him/her. In addition, a person’s measure of
value is constantly changing to meet a specific situation.”

The Merriam-Webster Online dictionary (www.m-w.com) lists the following
definitions for value:

1. A fair return or equivalent in goods, services, or money for something
exchanged
2. The monetary worth of something : marketable price
3. Relative worth, utility, or importance
The American Heritage Dictionary defines value as follows:
1. An amount, as of goods, services, or money, considered to be a fair
and suitable equivalent for something else; a fair price or return.