Hey everyone, welcome to this lecture what is value? value is the single most important concept that has been brought to awareness in the business community in recent years. value is defined by the customer. Generally, the customer defines value based on two factors, one, their perception of the usefulness of the given product or service and to the necessity of the given product or service. Let's look at an example. While Japanese made cars and German made cars are sold in the same market.

Some customers prefer Japanese made for their quality, reliability, resale value, and fuel efficiency. German made cars can satisfy some of those expectations and additionally offer a pride of ownership attached to the car maker These is a segment of customers who prefers German made cars for these very reasons that customers define the value of the product. American car makers build trucks and vans sturdy enough to handle tough jobs. Some American cars, trucks and vans are comparable in quality and reliability to the Japanese and German competition. They have also built in customer loyalty. There is a segment of customer who will buy American made vehicles for these very reasons.

That's in a nutshell, it is the customer who defines value and is willing to pay for it. As this concept is understood, the next important point to learn is what is a value stream. You will learn that in the next lecture. Thank you for attending. See you in the next one.