Value (marketing)

Value in marketing, also known as customer-perceived

value, is the dierence between a prospective customers
evaluation of the benets and costs of one product when
compared with others. Value may also be expressed as
a straightforward relationship between perceived benets
and perceived costs: Value = Benets / Cost.

For an organization to deliver value, it has to improve

its value : cost ratio. When an organization delivers
high value at high price, the perceived value may be
low. When it delivers high value at low price, the perceived value may be high. The key to deliver high perceived value is attaching value to each of the individuals
or organizationsmaking them believe that what you are
oering is beyond expectationhelping them to solve a
problem, oering a solution, giving results, and making
them happy.

The basic underlying concept of value in marketing is human needs. The basic human needs may include food,
shelter, belonging, love, and self expression. Both culture
and individual personality shape human needs in what
is known as wants. When wants are backed by buying Value changes based on time, place and people in relation
to changing environmental factors. It is a creative energy
power, they become demands.
With a consumers wants and resources (nancial ability), exchange between people and organizations in our marthey demand products and services with benets that add ketplace.
up to the most value and satisfaction.

Very often managers conduct customer value analysis to

reveal the companys strengths and weaknesses compared
The four types of value include: functional value, monetary value, social value, and psychological value. The to other competitors. the steps of which are as followed.
sources of value are not equally important to all consumers. How important a value is, depends on the con To identify the major attributes and benets that
sumer and the purchase. Values should always be dened
customers value for choosing a product and vendor.
through the eyes of the consumer.
Assessment of the quantitative importance of the
Functional Value: This type of value is what an oer
dierent attributes and benets.
does, its the solution an oer provides to the customer.
Assessment of the companys and competitors performance on each attribute and benets.

Monetary Value: This is where the function of the price

paid is relative to an oerings perceived worth. This value
invites a trade-o between other values and monetary
costs.

Examining how customer in the particular segment

rated company against major competitor on each attribute.

Social Value: The extent to which owning a product or

engaging in a service allows the consumer to connect with
others.

Monitor customer perceived value over time.

Psychological Value: The extent to which a product allows consumers to express themselves or feel better.

1 References

For a rm to deliver value to its customers, they must consider what is known as the total market oering. This
includes the reputation of the organization, sta representation, product benets, and technological characteristics
as compared to competitors market oerings and prices.
Value can thus be dened as the relationship of a rms
market oerings to those of its competitors.

Peter Doyle: Value-Based Marketing: Marketing

Strategies for Corporate Growth and Shareholder
Value. Wiley, 2000.
Raquel Snchez-Fernndez and M. ngeles IniestaBonillo, The concept of perceived value: a systematic review of the research, Marketing Theory
7 (2007), 427-451

Value in marketing can be dened by both qualitative and

quantitative measures. On the qualitative side, value is the
perceived gain composed of individuals emotional, mental and physical condition plus various social, economic,
cultural and environmental factors. On the quantitative
side, value is the actual gain measured in terms of nancial numbers, percentages, and dollars.

Turel, O., Serenko, A. and Bontis, N. (2007).

User acceptance of wireless short messaging services: Deconstructing perceived value. Information
& Management 44(1): 63-73.
1

1
Philip Kotler, Kevin Lane Keller, Abraham Koshy,
Mithileshwar Jha: Marketing Management: A
south Asian Perspective, Pearson, 13th Eidition(2009) 117-121.

REFERENCES

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