Reaching out to an international target market can be a challenge for many marketers. Hubspot’s recent report revealed that 65% of marketing teams prioritise international market strategies. Yet, they still face issues with the value creation concept. Marketing teams grapple with challenges like content or campaign management for varying buying patterns in different countries. Consistently tracking and updating prices also prove to be tough as exchange rates differ around the world. Then there’s the fact that marketers need to optimise their relevance and visibility in different regions and languages. 


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But what do evolving situations mean for your preparedness as a marketer? Do you have the right tools and platforms to effectively communicate your marketing campaigns? Moreover, how do your marketing strategies operate concerning your pricing and sales performance?


In this series of articles, we discuss value creation concepts, functions, and examples. What can they do to your business when it comes to your marketing efforts?


At Taylor Wells, we believe that unlocking your customers’ value drivers is key to establishing a long-term relationship by providing the right engagement, experiences, and exchange platforms. We argue that maximising your marketing capabilities aligned to your value proposition will help you respond more efficiently to crises and other evolving situations including buyer behaviour trends both for your customers and with your employees.


Table of contents: 

I. Business Value Creation Concepts, Functions, and Examples in the Form of Marketing

II. How Apparel, Fashion, and Luxury are Resetting Value Creation Drivers Post-Pandemic



value creation concept

 Business Value Creation Concepts, Functions, and Examples in the Form of Marketing


In your everyday business activities, value is either created or destroyed. The value creation concept and functions for you, your shareholders, customers, and employees drive business success. How can we define the concept of value creation?


The value creation concept is defined as offering something valuable in exchange for something more valuable to you. This is a broad term that includes both benefits and drawbacks.


It requires effort to establish your values. As an entrepreneur, you have numerous options for defining value. During this process, you should consider what you want to be, achieve, or have and how your firm may help you achieve it. Nonetheless, any business value creation approach must consider three critical elements. Customers, owners and investors, as well as employees.


These three parties’ interests are interwoven. As a result, the economic benefit should not be provided to one group only while abandoning some behind. The development of the value creation concept must stand for all.


What are the functions of the business model value creation?


The value creation concept is critical for any firm. Creating value for clients allows you to sell your products and services more easily. Similarly, boosting profits and stock prices to create profits for investors increases the delivery of investment funds to help finance operations.


1. Value creation concept assists the organisation in enhancing employee loyalty and satisfaction.


Value creation entails creating value for your employees as well as enhancing the value of your support team. This consequently increases job satisfaction. While finding people that have a strong association with your firm is the first step toward value creation, you must also establish a workplace culture that attracts those individuals.


It does not have to be complicated to improve recruitment and retention. Create an environment in which employees feel valued and appreciated, and you’ll be well above many other managers. When engaging directly with the employees, you will be more inclined to grasp what they need to keep supporting the firm’s development.


2. Value creation concept guides the organisation in improving production and efficiency across the board.


What could be more crucial to a company’s internal operations than its workforce? When your employees are satisfied, their productivity rises, which is precisely what you really want to enable your company’s expansion.


Even simple modifications to your routines will vastly increase your group’s productivity and workplace efficiency.  Valuing your employees will allow you to complete more quality work in less time and spend less time on useless duties. This will also benefit your personnel in improving sales and marketing dynamics.


3. Value creation concept makes it easier for an organisation to optimise and maximise its internal and external resources.


Once you are concentrating on value creation, striving to make the most of your labour supply and deliver the greatest service to your stockholders, you cannot overlook the internal and external resources utilised to produce or deliver your products/services. These include, for instance, raw materials.


Through the emphasis on value creation, you may explicitly or implicitly preserve and protect ecological systems. Some government policies and laws also favour enterprises that combine expansion with environmental advocacies. A record of success in constructive environmental initiatives can also help your public reputation and gain competitive advantages.


Now, where do most companies struggle with their value creation concept and functions?


A recent survey of 493 participating B2B companies revealed that only 20% evaluate their marketing strategies as effective. In fact, a study done by Mobile Marketing Association discovered from interviewing 125 marketing leaders about their coping strategies and structures to adapt that they implemented a combination of creative marketing activities and investing in the right talent and technology.


Most companies pursue marketing transformation as a retooling exercise with technology, rebranding, or project transitions instead of a value creation effort. They often overlook the opportunities that maximising customer experience, engagement, and exchange can bring. Not all can personalise their story and predict the impact of their strategies as well as future market trends.


We ask, what are the best value creation concepts that drive growth opportunities? Below, we suggest areas of a business model value concept and functions that help unlock your competitive edge and transform your marketing capabilities.


Business Value Creation Concept and Functions for Customers


1. Experience Value


This is about providing convenient and enjoyable experiences that your customers will remember throughout their interaction with you. This is one of the key reasons that people return to you because of their positive experiences which then creates a loyal customer base. This calls for opportunities to improve your value proposition and offer innovation throughout the customer’s journey.


For instance, the airline industry further enhances its core offering with plenty of choices on the menu or in-flight dining, lounge area, onboard entertainment, and other services that improve customer satisfaction and experience.


Pharmacies, as well as Starbucks, have adopted unified and seamless multichannel platforms, thanks to technology. This strategy has helped them remain competitive even during the lockdowns. The applications allow customers to order online, choose the nearest store, and pick up their orders or have them delivered.


2. Exchange Value


This entails a deep understanding of specific customer needs and the problems that you want to solve for them. Then you can tailor your findings to provide valuable transactions. Marketers, sales, and pricing teams need to work together to optimise their personalisation, conversion, and prediction capabilities.


Using data analytics about buying patterns has proven to be a successful strategy for eCommerce giants like Alibaba. The company which received $109bn worth of revenue last year also uses automated messages and algorithms that adapt to customers’ preferences for its millions of users worldwide.


The fashion industry, from clothes to shoes, had also adopted this strategy with the onset of lockdown which, allowed customers to seamlessly personalise their choices and measurements by simply using AI assistance. Furniture and home decor brands like IKEA have adapted by providing virtual showrooms for their customers which they can easily customise before placing an order and having it delivered.



3. Engagement Value


This refers to the steps you take to strengthen customer relationships which result in growth by defining what your brand means to you and the public. Companies that adopt social causes into their processes are more conscious about the way they operate their businesses.


This, in turn, resonates with a customer base who is also conscious about how they consume and its impact on the environment and their communities. This further unlocks more ideas for product improvement and innovation designed to engage with your customers on a meaningful level.


A vision and mission that communicates authenticity, sustainability, and empowering the community brings a more meaningful purpose to your brand and why you do business in the first place. This further reinforces your corporate responsibility and relevance of what makes you more than just a money-making organisation.


SaaS companies and even in the makeup industry, for instance, have elevated their engagement platforms by creating a community of user reviews that they share with the public. This helped fuel efforts of improving product and service quality.


Business Value Creation Concepts and Functions for Owners, Investors, and Employees


It’s not simply your customers whom you can create value for. But starting from the place where it all begins is the internal value in your organisational functions. This, in turn, naturally translates to your company’s vision and mission, communicating it efficiently with your customers.


Business Value Creation Concept Within Your Operations


First and foremost, fostering an environment of authentic purpose and connections apart from the well-being of your employees should be the top priority. A team that engages themselves in open and creative discussions reinforces that their input and opinions matter. This especially comes in handy when brainstorming innovative ideas or solutions.


This is especially true when it comes to the collaborative effort among cross-functioning teams in marketing, sales, and pricing professionals. Apart from this, talent management, development, and optimising capabilities within your organisational efficiency are just as important.



Business Model Value Creation Concept for Strategies


This brings growth opportunities and expansion for your current or available products/services, whether that’s through innovation or creating new categories. It also helps you build new platforms and business models.


Google has achieved this by branching out to autonomous vehicles, something that its competitor, Yahoo, could have never thought of or done. Similarly, brands like Avon (known for its cosmetics and personal care products) and Red Bull have ventured into the media and publishing industry.


An optimised marketing strategy can generate as much as $10bn in revenue just as it did for Amazon. Similarly, Coca-Cola’s Freestyle vending machine was launched in 2009 which allows customers to mix up their own flavoured drinks. This was then used by Coca-Cola’s marketing as well as its research and development team to analyse what soda drinkers would want, enabling the brand to create new products.



Business Value Creation Concept Within Your Teams


This requires the right training, evaluation, and knowledge tools to make well-informed marketing decisions. Working with IT teams and data analytics further enhances this value creation. Empowered teams backed up with the right tools also instil trust and confidence in their capabilities, encouraging them to perform their best.


Micromanagement policies that have become outdated don’t work in today’s workplace environment. This can leave some employees feeling unmotivated. Moreover, uniform key metrics that measure and evaluate a marketing team’s performance help transform organisational processes.


Aside from performance indicators, the management’s role in supervising key behavioural indicators (such as employee motivation, commitment, satisfaction, transparency, and loyalty) helps predict future actions. This can then be steered towards benefitting both individuals and the organisation. Studies also show that chief marketing officers who encourage interactions within their teams are better at:


  • managing projects
  • promoting inclusivity
  • establishing trust


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Technology plays a key role in facilitating these transformations of value creation within your marketing tactics. Assessing and tracking your customer’s needs using AI smoothens out the struggles between your marketing activities and the expected outcomes of your business.


Analytics that enhance customer intelligence, data creation, and innovative solutions allow you to capture new revenue streams. Likewise, marketing automation enables product personalisation and predicting buying trends more accurately to your advantage


Lastly, it’s up to you to choose which value creation areas are most important. You need to consider this for both your customers and the organisation. Your priorities should reflect your long-term goals, budget, resources, limitations, and current market trends.




value creation concept

How Apparel, Fashion, and Luxury are Resetting Value Creation Drivers Post-Pandemic


The current economic crisis has caught the AF&L (Apparel, Footwear & Luxury) industry off guard. COVID-19 has destroyed several retail industries and AF&L is no exception. The outcome of social and economic shutdowns presents remarkable challenges for leaders in this industry. What is the role of value creation drivers in the AF&L industry?


Although no one knows the total financial devastation of the COVID-19 pandemic on the retail sector, the crisis has definitely damaged some of the principal aspects of the AF&L industry. Some of these changes could even be permanent.


To note, between February and March, AF&L sales went down by an average of 40%. Apparel & Footwear is predicted to contract around 27% to 30% and the luxury group by 35% to 39% contraction.


In fact, two big successful retailers, Neiman Marcus and JC Penney filed for bankruptcy during the outbreak of the pandemic. They were both established businesses selling to customers for more than a hundred years. Both companies, however, were debt-laden and market leaders in a declining Apparel, Footwear & Luxury industry.


Now we see more sustainability measures driving new business strategies — a trend that’s happening across different groups like luxury, fast fashion, sport, and value retail. However, since the downturn, businesses’ commitment to sustainability has created tension between brands and retailers. Now, more than ever, value creation has become more important for declining retail industries.


In this article, we will continue to discuss the pandemic’s effect on the luxury market. Also, we’ll explore value creation and its drivers in the fashion industry. We’ll give examples of how distribution companies are breaking the mould by thinking creatively. You will learn why value creation is important post-pandemic and how to prepare your business for the future of retail in the long run.


Value Creation Drivers: Exploring Apparel, Fashion, and Luxury Industry


Value creation is when you offer something valuable and receive something that is even more valuable to you in return. In business, it can be simplified into costs and benefits. Owners, organisational structure, employees, and customers are all part of the dynamics of value creation.


Defining What Value Creation Drivers Are


What do you value as a business owner? This obviously changes with time as you achieve more milestones and objectives. For some, it is defined and synonymous with success aligned to specific company values.


What are your business goals and purpose? Clearly, it doesn’t make sense to create something that’s valuable to you that customers don’t think they need. In this case, there is no value creation.


On the other extreme, as a business, you may provide value for customers that don’t mean the same thing to you. This happens when a business operates beyond its costs, barely earning any profit. A setup like this can only survive if there are other opportunities or channels for price techniques.


Create a Network of Users


Using resources, capital, research, creativity, and marketing automation, create products and services through the lens of customers’ needs. As author Kaitlyn Smith said, “People make purchases that fit who they are and who they aspire to be.” So, ask: “Who are your customers? Who do they want to be? As you determine this, keep it in the business model at all times.”



For example, a single phone will not matter much to a company’s sales volume. But with millions of customers, it creates a network of connections and users that allow not only the telecommunications industry to thrive. But with the advent of technological convergence, streaming and internet services on crossover devices are the new norm. This scenario is also common in social media. So, with more businesses adopting an eCommerce platform, you need creativity to establish a network of users/customers.


Deliver through product features and sales teams


Sales and marketing strategies zero in on product features that will bring benefits and solve customers’ problems. That’s what people care about the most. How can you make their lives better and easier? Then deliver this promise through engagement, eCommerce platforms, and the best customer service.


Sustain by Focusing on the Future


Sustaining the business during a downturn is very significant, including stakeholders and strengthening the economy. However, top management should not ignore the longer term.


Consider implementing an eCommerce business. The pandemic has triggered a lot of companies to develop and implement an online and Omni-channel strategy.


First, allocate a bigger share of investment to e-commerce. Discover new ways of collaborating or partnering with existing and established online stores. Step up your transformation through your customisation efforts in digital marketing. Focus on developing a personalised digital experience with the same quality.


Restructure through mergers and acquisitions (M&A) 


An economic downturn can create new avenues for improvement. Thus, businesses should determine which companies they could potentially partner with to keep operating or expand into adjoining markets and product categories.



Expect changes in customer behaviour


The luxury industry has created value for decades because of its creativity and innovation. The new normal will definitely look quite different. So, the luxury and fashion industry should anticipate and respond accordingly. After a large-scale economic crisis, consumer preferences change.


Go digital (end-to-end supply chain) 


Using remote-working platforms or virtual showrooms can help fashion brands maintain and improve productivity during a crisis. In fact, remote work may be semi-permanent. So, a transformation like this requires investment in innovative, resilient, and cutting-edge technology when digitising the supply chain.



Why are value creation drivers important even after COVID-19?


The fashion industry will face unrecoverable and wilful wounds if it abandons value creation during the pandemic. Besides, cost management initiatives are only one aspect of a sustainability strategy.


The key to making money out of sustainability is based on innovation – i.e., your pricing, marketing, and sales strategy. How do you define, communicate, and capture the value of sustainability for your customers and employees? Without the ability to answer this question, no one will buy into your vision.


At Taylor Wells, we argue that it is vital for retailers, fashion brands, and other industry shareholders to continue investing in value pricing, pinpointing its drivers, and creation during and after the COVID-19 crisis. With this in mind, we listed four areas that we’ve identified as critical to monetising a business strategy based on sustainability and value creation:


1. Safeguard important assets


Fashion businesses should focus on their assets and ensure to protect capital, employees, channels, value chain partnerships, and the trust and support of their customers. Take out complexity and costs that are not necessary to prepare for reinvestment.


2. Find a solution to immediate inventory problems


Pricing is a key aspect of proper inventory management. It’s part of a business’s supply chain management and ensures that the business has the right products in the right volume (for sale), and at the right time. With continuing lockdowns across the globe, supply chains often experience bottlenecks.


3. Combine value creation with company recovery techniques


Make value creation central to post-pandemic decision-making. The crisis shouldn’t be an excuse to turn away from value creation. In fact, it should be included in key product priorities like durability and quality.


 4. Speed up transparency


Transparency plays a major role in businesses when taking advantage of innovative business models, digitalisation, and end-to-end solutions. The reason is to evaluate and encourage a new positive transparent model that exhibits value creation practices.


It is also essential to have an open dialogue and profitable partnership across the value chain to come up with a common solution for protecting employee livelihood and maintaining trust.


Where can you uncover value creation drivers in your business?


As a manager, you should believe that you can create value throughout your organisation. It does not occur just because you sell your products. The truth is that it all comes with first, how you structure your business. Then the process of creating value will continue with how you develop your product or deliver your service. And finally, value creation’s end product would be the sale. Sounds simple, right? However, it is made up of various branches of processes. To get you started, here are three crucial ways to create value:


1. Value creation in the course of business development


Sometimes business people desire quite so many appealing prospects and outcomes, but that is only because they have not committed to doing what is best. You can’t have everything. Have you heard of the saying, “The person who chases two rabbits catches neither”? That is true even in business. Wouldn’t it be preferable to get the most of what you desire? Of course, the answer is yes. But how?


Establish your objectives. When you have a clear aim in mind, making decisions is simple. Clarity of purpose results in captivating straightforwardness. You will not be wasting your time, effort, or money. You will see that your company is dedicated to providing a profitable overlap between what you value and what your consumers value.


But keep in mind that you cannot reach your aspirations on your own. You will require the assistance of advisors, consultants, and employees. To flourish, you must go beyond simply providing value to our customers, you must also give value to our workforce.


Productive workers seek more than just compensation. You need personnel who are internally motivated to add value to your customers’ lives. They are energised by a sense of purpose and fulfilment.


2. Value creation during the acquisition or generation of assets


Companies frequently make the majority of their money before making a sale. When you see dollars, it’s natural to associate value with them. It’s easy to mistake activities that generate revenue for those that create the majority of the value. The idea is to consider your company to be a sophisticated process of value-creating processes.


One approach to think about it is to see each process as its firm and divide the entire system into sections. Which methods are the most dependable and profitable? Where are the possibilities? When you only focus on sales, it’s easy to overlook where you’re adding value. Profits can be generated by both decreased costs and more income.


3. Value creation through marketing, branding, and promotion initiatives


Customers recognise value when it is properly communicated to them, and you see that they are willing and able to pay for it. Hence, revenue is generated by the creation of value during your sales process.


Beware that the sales process may be your most overlooked opportunity. You could have a wonderful product or service but underinvest in marketing. Never underestimate the value of establishing a brand. Strengthen relationships and acquire the knowledge that clients expect you to have to convince them.


Another error is to waste money on a sales procedure that produces minimal value. This frequently happens when business owners observe sales income but don’t understand what’s driving it. They have yet to discover what their customers actually appreciate.


Your customer actually discovers the value you can bring them, throughout the sales and marketing journey. Keep in mind that how you invest in this field may create or destroy value for your business.


Pricing: Key to Sustainability with Value Creation Drivers


Value creation includes the components in a product/service that a customer is willing to pay for. What customers will really pay is based on how the product is priced and marketed.


A great product that guarantees major benefits is only a promise. For instance, their willingness to pay may fall short of value. However, it defines value more when the product has a money-back guarantee. Therefore, aligning the value offering with customers models the impact of consumer economics.


Theoretically, the process seems easy for B2B customers using the Economic Value Estimation discussed in the pricing book, “The Strategy and Tactics of Pricing”). It shows that it isn’t the amount of the price you charge, but the amount of the relative price potential that a feature enhancement could provide for various customer groups.


Businesses that lack ways to measure value for product development tend to create services that represent “the best that money can buy” versus “the best value that customers will buy.”


Finding the balance between underpricing and overpricing is a skill that not all businesses know how to do. You have to base your price and make changes from time to time. If you mainly rely on discounts and promotional offers to bring margins, then overtime you’ll find that you’re underselling your product/services or the brand itself. Worse, this type of pricing architecture will eat away margins in the long run.


Value in Use as a Pricing Example


The fashion industry has always relied on setting its prices based on value, often at a higher range. We’ve seen designers start from scratch whose clothing or accessory brands are worn by celebrities or on the red carpet. As a result, their customer’s value perception increases. Similarly, when a fashion or luxury brand or product quality declines, so does the customer’s value perception.


Pricing on Purpose by Creating and Capturing Value


Establishing a Brand


Your brand’s resilience will help more customers choose your brand and pay for the value that they receive. Of course, to do this, it will take customer demographics research, marketing, product quality or development and improvement, pricing, and positioning over time.




This involves organisational processes and culture within cross-functioning teams. It also includes inventory, materials, technology, and labor. In most cases, production follows a cost-based pricing because there is more opportunity to create value. Yet, that’s not always advisable. The luxury industry thrives on value drivers that customers attach themselves to items like exclusivity.




This is commonly practised in social media thru advertisements. We see personalised pay-per-click ads on Youtube, Facebook, Instagram, and other websites. Even the gaming industry has adopted this practise.





A business can secure long-term growth when committed to value creation. It stays relevant by creating market-leading differentiation against competitors, leaving a lasting legacy.


Here are some tips that will help you determine that the retailer in an AF&L industry is moving in a positive direction:


  • Greater e-commerce sales (both absolute value and share on overall sale)
  • Continuous customer engagement with the brand
  • Positive cashflow
  • Lesser outstanding inventory
  • Improved margins
  • Satisfaction index of employees including attrition


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With thorough planning and skillful execution, the luxury industry can weather the crisis successfully and may come out even stronger.


To move in a positive direction, a business should be decisive and take actions on the short term and long-term implications of decisions made during the pandemic.


To transform a business in the right direction, executives want to first revise business model and operations. This can be done through M&A, integrating vertically, pricing and revenue management, or enhancing the value chain efficiency to maintain market share while managing profitability.


For a comprehensive view of maximising growth in your company, Download a complimentary whitepaper on How to Improve Product Pricing.


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