TOTAL VALUE PROPOSITION
Introduction
The total value proposition can refer to a marketing statement in a business which an organization use to make a summary and gives reasons as to why customers buy products or use services. This statement persuades interested customers that one product or service can have more quality as compared to another similar offering will. Most companies use the report to focus on customers who will gain from the products of the company, and this helps to maintain economic standards. The value proposition is a statement that states clear and measurable gains customers get when purchasing products or service. It persuades customers that certain products are good than others on the market. The proposition can result in a competitive advantage when buyers acquire that particular product or service over other competitors. Saudi Gulf Environmental Protection Company is an example of a company that provides waste disposal services to most of the health services providers in Saudi Arabia. The company at first specialized in Medical Waste services
Jensen, (2002) observes that the use of values associated with the regulation and support of services make certain their commensurability their economic techniques. The value in the setting of cultural ES outcome from supporters’ views and experiences and not from the actual characteristics of phenomena. This setting presents a problem of using valuation strategies that effectively describes values. The management of CES is a paramount consideration for sustainability simply because CES are essential contributors to the well-being of humans and because they may act as the key to the sustainability of human-ecology relationship. It has become open that cultural practices and phenomena are tightly linked and are the medium through which many ES get their meaning.
In consumer marketing investigation on sustainability, the Saudi Gulf Environmental Protection Company has looked at green marketing, green advertising as potential ways to address how suppliers may reduce environmental results. These approaches tend to stress more on environmentally friendly product features and socially responsible human behavior as the basis of the organizations marketing message whereas focus less on the real value added or potential benefits that a customer may receive. In this research on sustainability has mostly focused on “greening” the supply chain or how to reduce the environmental effects of the operation and to external stakeholders to external values. (Sandström et al., (2002).
In Saudi Gulf Environmental Protection Company, green supply chain management activities look into primary production chains from raw material sites to the consumer consumption of products and the reverse supply chains for vague management. Suppliers of technology fall away from the main activities related to the greening the supply chain and their play is not keenly researched on. Their role is crucial since many manufacturers make investments in green technologies to reduce the environmental impacts of their products. The current system in the green marketing regarding the greening the chain supply and green communications do not address the supplier’s activities in describing the sustainable value that may require developing customer value proposition that tackles environmental concerns.
According to Emerson, (2003) the costs of losing or maintaining ecosystem services have been classified or categorized into use values, option values, and non-use values. The latter is noticed as an essential component of the sum economic value of ecosystems and the necessary motivation for improved conservation. For example, non- use values have been calculated for the offshore marine conservation zone. However, there are still problems involved in the identification. This is the case when valuation is targeted on users of the ES. A user is defined as an individual who benefits either directly or indirectly from an ecosystem of interest and has direct or indirect use values for the services considered.
According to Sandström, et-al (2008) non-use values in Saudi Gulf Environmental Protection Company are the subject of expanding economic literature since when the importance of existence and values to conservation was discussed. Existence value was the main component of non-use values that was viewed, and this was presented as the value allocated by an individual to the existence of goods, away from its uses. Other dimensions have been considered including aesthetic value which represents the value used to preserve a good or service for use in the future and intangible and cultural values. Despite this complicated terminology, non-use values have been defined as the existence and bequest values. Within the economics system on which environmental economics and valuation modes are founded non-use values are determined in monetary units of (WTP), willingness –to- pay or desire- to –accept (WTA). Non- use values such as WTP are targeted through stipulated preference ways including discrete choice experiment (DCE). The other approach is contingent value method. Two approaches have been used to predict the non-use value.
The first thing is to know how much respondents are willing to pay for ES which they may not use. The other is to inquire from respondents to divide their total WTP for an ES into the many categories, for example, existence, own use, and others. Such decomposition has been used in various CVM applications regarding ES and has helped in acquiring knowledge on the relative shares of the value categories in the estimation of WTP. Mostly the percentage of non-use values in WTP are noticed to be crucial representing at an average of 90% of total WTP.
Even though it is popular in Saudi Gulf Environmental Protection Company, the decomposition approach has disadvantages mainly as a result of the problem of addressing unknown and non-separable constitutes of value. The total WTP for an ES for a person is a repercussion of different interrelated motivations which may not be separable for instance accessible to the researcher. As a result of these shortcomings, the critical approach, for example, obtaining WTP/WTA has seemed to be more appropriate. This approach avoids dealing with motivations and other issues; it embeds the exercise on value to the non-users which means loss of data entailing the non-use values of users. ( Gummesson, (2011).
Economic evaluation of non-use values looks at the extent to which the costs affect the group of individuals”financial bearing taken to be measurable in terms of WTP or WTA. We understand that the core characteristics of non-use values are the wish, from users and non-users that it exists during the unspecified period which may go beyond the life of the people. We argue that non-use values may be as a result of the desire of a person to guard the ES against the current time to beyond the person’s existence. This can be estimated through the WTP to safeguard the ES over a time. For users, any WTP for preserving the ES during their right life duration may be connected to both use and non-use values. ( Payne et-al, (2008).
There is a need for this company to come up with for estimating non-use values that would allow the estimation of non-use values and non-market use for users. There is a need for secure non-use value estimates concerning marine ecosystems. There is a way to differentiate between non-use and use value components in the stipulated willingness to pay WTP estimates based on the period. The methodology is focused in an empirical application to estimate non-use values concentrate on preserving the ecosystem.
The basis for determining benefits or costs is provided by a willingness to pay (WTP)and the willingness to accept (WTA). Faced with a reasonable price, excess desire to pay for the cost comprise a gain “consumer surplus” or benefit to the individual. In case of a loss, the individual least WTA will be the sum that recovers them for the loss. WTP and WTA are connected to the individual’s choice as stated in the market. Of significance to public bodies are WTP and WTA notions in what is a non- market context. It is not imagined to be important where the concept was used for valuable purposes. In the case of improvement, some could think of WTP to secure the growth and WTA recovery to forego the increase. (Lapierre, et-al. (2000).
Jensen, M. C. (2002) argues that economic theory states that these would not differ. In case of the damage of the environment, it appears valid to ask the individuals who would accept through compensation to put up with the cost and the price they would pay to stop such damage from happening once again. In such situations, it matters a lot which measures to be employed. Cost-benefit could be changed in their results even when WTA exceeds WTP by around 55%. The higher the ratio WTA/WTP have been witnessed for goods that are almost public: goods that when provided to a group of people are spread to others because of their nature. The high WTA/WTP ratio may affect products that are within the regulated overview of the Environment Agency.
The focus shifts to explanations of the disparity. For some times description have been improved. The important ones are explained in the table. Two items are differentiated. The first one is WTP, and WTA can be used to value again, and each of it is used to assess a loss. Second is where the gain is related to lose about the point of reference which is viewed as the existing pattern of poverty rights.
Conclusion
In conclusion the argument on the WTA-WTP in which the issue was raised to explain the disparities in WTA and WTP especially those from the preferred survey of environmental goods. The studies show that WTA>WTP by multiples that are not in line with received wisdom. Explanations are necessary since some of them show that what is observed is not the exact difference. If for some reasons the whole thing is respondent behavior, then it would not be wise to the values of the values for policy.
References
Emerson, J. (2003). The blended value proposition: Integrating social and financial returns. California management review, 45(4), 35-51.
Berry, L. L., Carbone, L. P., & Haeckel, S. H. (2002). Managing the total customer experience. (Essay). MIT Sloan management review, 43(3), 85-90.
Gummesson, E. (2011). Total relationship marketing. Routledge.
Jensen, M. C. (2002). Value maximization, stakeholder theory, and the corporate objective function. Business ethics quarterly, 235-256.
Lapierre, J. (2000). Customer-perceived value in industrial contexts. Journal of business & industrial marketing, 15(2/3), 122-145.
Mascarenhas, O. A., Kesavan, R., & Bernacchi, M. (2006). Lasting customer loyalty: a total customer experience approach. Journal of consumer marketing, 23(7), 397-405.
Payne A. F., Storbacka, K., & Frow, P. (2008). Managing the co-creation of value. Journal of the academy of marketing science, 36(1), 83-96.
Sandström, S., Edvardsson, B., Kristensson, P., & Magnusson, P. (2008). The value in use through service experience. Managing Service Quality: An International Journal, 18(2), 112-126.
Ulrich, D., & Brockbank, W. (2005). The HR value proposition. Harvard Business Press.