Apply understanding and configuring value to a cereal product

Essay by djuroUniversity, Bachelor'sB, May 2007

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Understanding and configuring value are crucial tools used in providingvalue to both customer and organization. "Sanitarium" must understand both keyelements in the market in order to be able to successfully sell the breakfast cereal"Weet- Bix" to Australian customers. Understanding value according to the Value exchangemodel involves understanding buyer behavior, carefully segmenting the market,knowledge of Australia's market landscape as well as perform market research in order tounderstand the benefits customers seek. Furthermore once an understanding isestablished, "Sanitarium" must then continue down the Value exchange model to theprocess of configuring an attractive offer in order to provide transactional and relationalbenefits for itself as well as intrinsic and extrinsic benefits to clientele.

The outcomes and value sought by customers are intrinsic as well as extrinsic benefits.

Intrinsic benefits are defined as "benefit derived from consumption of a product"(Gabbott, 2003 p.42), these include "energy and vitality" and "eating healthy". Extrinsicmeanwhile are "associated with possession or use" in particular the value customersreceive from being seen as "studious" or "party people" (Gabbott, 2003 p.42).

Forexample, the image of being portrayed as a 'healthy' and 'energetic' person and living ahealthy lifestyle. ( Finally theorganization seeks to receive transactional benefits in enhanced Market share in theAustralian Market and increased profitability (Newman, 1988 p.10).

The Marketing Environment and in particular the marketing landscape not only affecteach part of the Value exchange model, they also regulate how trade occurs. In order for"Sanitarium" to be able to successfully bring "Weet- Bix" in the Australian Market theymust first be able to satisfy legal and regulatory requirement. Nearly all marketingactivities are controlled and restrained by laws and regulations that have an affect uponeverything from prices to the safety of products. (Gabbott 2003, pp.6-7) As part of an on-going commitment to quality, Sanatorium goes to great lengths to ensure that...