Introduction

Value creation refers to the perceived benefit to the customer, in line with the microeconomic concept of utility from a company’s offering to its customers, whether it enhances the quality of life for the customer (B2C) or the company’s profitability (B2B) (Verdin & Tackx, 2015). Therefore, the customer value proposition describes the value firms promise to deliver to its targeted market consistently. It communicates how a firm’s product or service offering effectively meets the targeted consumer needs or solves their problem relative to a rival’s offering (Sheehan & Bruni-Bossio, 2015). The success of the customer value proposition is contingent on how well the consumer needs analysis is, relative to competitor offerings and the firm’s core competencies. The insights help develop the alternatives that will help structure a product or service with attributes that align with customer needs. Ultimately, customer value creation improves service quality, customer satisfaction, and loyalty. It also promotes higher productivity through quality and quantity of service and significant cost reduction for the firm (Gong, 2016). The current report explores the value creation model for OK2B Apparel.

Company Background

OK2B Apparel is a company that sells pro-Black clothing items. The company’s purpose is to promote and encourage customers to be unapologetically Black in a society that is so “vehemently set on making Black people believe that they do not fit in, meet standards, or make the cut. The company’s Chief Executive Officer is J. Bailey – a proud Black woman. The company sells a range of tee shirts (both adult and kid sizes), hats, tank tops, face masks, hoodies, and other assorted items, such as e-books. The company’s primary target consumers are Black women, mostly because the demographic is one of the fastest-growing in entrepreneurship and so will buy from a company in which they feel well-represents them. The company’s core strengths include high-quality products, drop-shipping products at much lower prices than competitors, and having a wide variety of catalogued clothing items (OK2B Apparel, 2020).

Customer Value

Ideally, customer value refers to a company’s ability to create and add value to the goods and services they offer to their customers (McFarlane, 2013). Customer value entails extraordinary delivery on the following four value-points or components. 

  • Service. Service is an intangible value offered to customers. OK2B Apparel achieves this by providing one of the essential human needs – clothing. Clothing falls within the category of physiological need and fulfils the fundamental need for protection for all individuals. In contemporary times, however, clothing has also taken an additional function of symbolizing an individual. People use clothes to express and differentiate themselves from others. Under such contexts, clothing serves as a communication medium, conveying information regarding who the individual is or associates with, according to (Cham et al., 2018). 
  • Product Quality is a core feature of the products sold at OK2B Apparel. Customer-perceived quality bases upon the consumer’s decision on the overall excellence or superiority of a product, which significantly influences satisfaction (Suchánek et al., 2015). By providing customers with high-quality products, the company enhances its competitive potential and productivity since it is a core selling point that can attract consumers.  
  • Image. The third attribute relates to the customer’s perception of the company or business they interact with and the degree to which they align with personal values or objectives. The fact that OK2B Apparel is a black-themed company constitutes characteristics that interact with the customer within the context of reliability, responsibility, and benefits towards the Black people welfare.
  • Price. Price refers to the price one can command for goods and services and that customers are willing to pay (McFarlane, 2013). OK2B Apparel has relatively affordable prices on its products and is a relatively cheaper option for drop shipping compared to its competitors. The tactic is an efficient strategy, primarily if the target market comprises of price-conscious consumers. Price-conscious individuals are customers whose intention to purchases largely depends on the level of pricing or cost incurred for a commodity (Rihn et al., 2018).

Identifying a Problem/Need

A need refers to a fundamental deficiency for an essential item. Human beings need food, water, air, security, and within the OK2B Apparel context, clothing. Hence, one of the company’s goal is to ensure they meet the need for clothing for a given market. However, being in the clothing industry does not differentiate OK2B Apparel from its competitors as there is nothing unique about selling clothes to the general public. There exist many companies that deal with the same line of commodities, which means that competition can be high. Also, a broad approach to selling clothes to the larger public has some downsides, such as not adequately meeting the needs of the diverse population. Therefore, the company’s market segment is the Black community for two reasons. The market is mostly low-income and also because it is a marginalized group in society. Racial disparity is an intergenerational aspect for the black communities and neighborhoods with much lower rates of upward mobility (Chetty et al., 2020). Second, being a woman entrepreneur from a minority group can be quite challenging, which is why OK2B Apparel mostly targets Black women in support of a thriving Black female-owned business. The need here is to help elevate each other within the community and support the Black community thrive despite the hardships and challenges associated with discrimination and oppressive attitudes and behaviors against the Black minority group. 

Meeting Customer Needs

By providing customers with clothing solutions in a wide variety, OK2B Apparel meets on the critical needs of the market it targets. The clothes bought from the company not only fulfil the physical and psychological need to be covered and protected from external elements but also help promote an individual’s identity. The Black-themed designs for the various products in the company’s portfolio also serve as a source of status or association. The CEO’s goal is to promote Black pride and to empower these values in the form of fashion and design. By wearing these products, people can easily associate one’s ideals as supporting or promoting the Black people thrive. It can also help communicate words of encouragement through the blatant expressions or designs on the clothes offered. At the same time, this value extends to various age groups and both genders (masculine and feminine). These attributes, as noted earlier, help achieve brand recognition and trust since they closely align with values held by the target market. As such, the designs and variety of choice should work towards promoting more significant interest in the products. 

Also, another way through which the company meets the customers’ needs is by providing low-cost and affordable quality products and after-sales services to the primary targets. With blacks mostly falling within the low-income bracket, the company’s products serve as an excellent source of products to fulfil the need for clothing, while also empowering the Black people’ voice in society. People within this socio-economic bracket are very likely to be price-sensitive. Hence, offering a lowly priced commodity, or one that does not incur them much cost to the final consumer allows them to save on cost while meeting the need to promote Black pride and empowerment. 

Differentiating Factor

Differentiation is a strategy for enhancing a company’s overall competitiveness by focusing on customizing and improving consumer experience by being unique and meeting their specific needs (Planellas, 2019). The specifications can either be in the form of improved product design, brand image, technology, features, dealers, networks, or customer service (Tanwar, 2013). A company that wants to differentiate themselves from its competitors must rely on innovation, brand development, and market, among others to achieve sustainable competition (Chang et al., 2015). OK2B Apparel innovates itself by being a pro-Black-themed company that sells clothing items specific to a given niche and uses this basis to enhance brand development to strengthen the brand and consequent recognition. The company serves all ages and genders, but the primary target is the Black women with an appreciation for entrepreneurship and seeks to customize their designs to appeal more to a Black audience. The core attributes of the company engage both consumer characteristics and their rationality when choosing to buy from the company. Hence, OK2B Apparel makes for the ideal supplier of Black-themed clothing merchandise to meet the identified customer value. 

References

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Chetty, R., Hendren, N., Jones, M. R., & Porter, S. R. (2020). Race and economic opportunity in the United States: An intergenerational perspective. The Quarterly Journal of Economics, 135(2), 711-783.

Gong, T., Choi, J. N., & Murdy, S. (2016). Does customer value creation behavior drive customer well-being?. Social Behavior and Personality: an international journal, 44(1), 59-75.

McFarlane, D. A. (2013). The strategic importance of customer value. Atlantic Marketing Journal, 2(1), 5.

OK2B Apparel (2020). [online] Retrieved from https://ok2bapparel.com/ [Accessed 27 July, 2020]

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Rihn, A., Khachatryan, H., & Wei, X. (2018). Assessing Purchase Patterns of Price Conscious Consumers. Horticulturae, 4(3), 13.

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Verdin, P., & Tackx, K. (2015). Are you creating or capturing value? A dynamic framework for sustainable strategy. M-RCBG Working Paper Series, 36, 1-19.