BestValue Computers is a Jackson, Mississippi, company providing computer technology, desktops, laptops, printers, and other peripheral devices to local businesses and school districts in the southern half of Mississippi. Leroy Wells founded BestValue shortly after graduating from college with an Information Technology degree. Leroy began small but soon collected accounts looking for great value at reasonable prices with local service. When Leroy started his business in Jackson, he believed that anyone could build a computer. In fact, other than the processor and the software that runs computers, many of the components used are sold as commodities. Leroy initially viewed his company as a value-added assembler and reseller of technology products. This business model was so successful that Leroy decided to expand from Jackson throughout southern Mississippi. To facilitate this expansion, Leroy hired Charisse Taylor in Hattiesburg to sell his products to all of south Mississippi, including the Gulf Coast, where several casinos were located.
Before hiring Charisse, Leroy made sure that she had a reputation for developing long-term relationships with her customers and that she was a professional with integrity. Charisse did not disappoint Leroy. She has grown the business significantly in the two years that she has been with BestValue. Charisse credits her success to being honest with customers, which includes explaining exactly what BestValue can provide in terms of software and hardware. That way, no one is surprised with the result. Many times customers have remarked to both Charisse and Leroy that they received more than they expected. Now Leroy has set his sights on the New Orleans and Memphis markets. In addition, many of his initial customers have grown beyond a couple of desktop computers. They are starting to ask Leroy if he can provide and service local area networks (LANs), which allow many computers to share a central server so that workers can share files and communicate much more quickly. Leroy has decided to pursue the LAN business because selling, installing, and servicing LANs seems to be a natural extension of his current business. However, adding the LAN products and accompanying services to his existing line of business represents a big addition to his current method of operation, which is to provide high-quality, high-value computers and peripheral devices. This new venture into providing more of a service than a product seems somewhat risky to Leroy, but he recognizes that LANs are the wave of the future and that to remain viable he will have to start viewing his company as more of a service provider than a product provider. To facilitate Leroy’s expansion into Memphis and New Orleans, he has hired two new salespeople. They are similar to Charisse in that they are relationship builders who believe providing clients with more than they promised is the key to successful selling today. This attitude is important because the competition in these two markets will be tough.
Much larger competitors like Dell, IBM, and Hewlett-Packard have been selling equipment in these areas for a long time, so it will be very important for the sales reps to communicate BestValue’s message of great value, including reasonable prices and local service. In fact, Leroy realizes that the only way to compete with the big boys is to be better than they are, by providing value over and above what they offer. That philosophy has made BestValue a success so far, and Leroy thinks it will work in these new markets too.
1. Identify and describe the categories of value creation on which BestValue currently relies most on.
2. How can BestValue utilize the service quality dimensions to make sure it is communicating a consistent message of quality service and value every time someone from the company interacts with a customer?
3. Even though BestValue provides a commodity product, what role can the concept of brand equity play for BestValue’s sales reps as they begin contacting customers in the New Orleans and Memphis areas?
4. What is the role of the BestValue sales reps in managing customer expectations? How can they ensure that new customers in the New Orleans and Memphis areas are delighted with their purchases? Be specific and explain.
5. What are some dangers that BestValue must take into account as it moves into the new markets and begins to provide LAN products and services? How will value creation change for it with the addition of LANs?