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Understanding Value in Consumer Choices: A Framework for Businesses

This guide explores the multifaceted concept of value from a consumer perspective, highlighting factors such as past experiences, current needs, and expectations. It emphasizes how convenience and time-saving attributes contribute to perceived value, defined through both tangible and intangible aspects. The Value Equation demonstrates that perceived performance, additional services, and price shape consumer satisfaction. Lastly, it discusses various buyer types and their definitions of value, laying the groundwork for businesses to effectively meet consumer demands and foster loyalty.

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Understanding Value in Consumer Choices: A Framework for Businesses

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  1. Value and The Consumer • Convenience/time saving is a valued attribute • Elements in defining value * Past experience * Current situation * Expectations

  2. Past Experience • Degree and length of product use • Favorable or unfavorable view • Success in using the product

  3. Current Situation • Guided by perceived needs • Necessity of change or redefinition of needs * Economic situation-cut costs * Change in company/policies/personnel

  4. Value is linked to: • Product or service characteristics • Consumers individual situation • Awareness of product characteristics by consumer • Exceeding expectations- receive more than you pay for. • Ideas/vision for business user

  5. Two types of value • Tangible • Intangible-image, salesperson’s understanding of the consumer- their” experience,hopes, dreams, and definition of quality” • Emotions or feelings are involved.

  6. The Value Equation • Value is equal to: Perceived product performance+/- Additional Services- Price * In a business (BToB) setting, value is indicated by reduced cost, enhanced revenue, technical knowledge, greater access, and ease of use(reduced complexity)

  7. Levels of Value • Product=> Expectations=> Value-Added=>Total Product/Partnership • Delivery of value creates loyalty • Value varys with regard to buyer type: * Business- bottomline results,price/value * Economic- price, efficiency,tailored program

  8. Buyer types and Value • Relationship- trust, regular contact,full service, information source needed • Exercise- small groups 1. Discuss what value is to you 2. How was value involved in a recent purchase 3. As you approach a business purchase, what factors indicate value to you. Do at least three items. This is something you have not purchased yet.

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