Value = Quality / Cost

This principle is one of many in a series of principles taught by Marshall Thurber

Theory

  • Law of Value: Your true worth is determined by how much more you give in value than what you take in payment.
  • Adding value
  • Commodity customer will look for highest value for the least spend

Learning

  • When a customer purchases something there is an exchange that goes on
  • The customer is saying, “The product or service that I am purchasing is more valuable to me than the money I am exchanging for it.
  • The person who decides whether or not you’re adding value is the customer
  • The customer is always looking for the best value

Examples

  • No true value of the number of inhabitants within the boundaries of Detroit.
  • A count of the number of inhabitants of Detroit is dependent upon the application of arbitrary rules for carrying out the count.
  • Dr Deming, “how do you build quality into a product, how do you add value and to make sure that you include in the customer in the evaluation because the customer is the one who is going to make that key exchange by buying your product or service
  • America at the end of world war two was the only industrial power that wasn’t devastated by the war and was very arrogant because they had no competition and really kept the customer out of the loop value creation loop.
  • Dr Deming, “build quality in then the customer will recognise that quality and spend their money to buy the highest value product.

Leave a Reply