CSR 631 Research Stream. Consumer value. Jooyeon Ha. Contents. Foundation : Value theory 1970s 1980s 1990s 2000s. Value Theory.
The basic subject matter of marketing includes all transaction that involve any form of exchange of values between parties.
Value: The number of units of quality per dollar expenditure
Value = quality/price
= perceived quality as a function of price/price
Typology of consumer value
: Development of a model of consumer choice blending economic reasoning with principles of cognitive psychology.
1. The value function is defined over perceived gains and losses relative to a reference point.
2. The value function is explained by gains and losses in consumer’s consumption situations.
3. The loss function is steeper than the gain function. People are more sensitive to the prospect of a loss than to the prospect of a gain.
Willingness to Buy
Acquisition Value vs. Transaction Value
PV = acquisition value + transaction value
1. Value is low price: Consumers equate value with low price, indicating that what they had to give up was most salient in their perceptions of value.
2. Value is whatever I want in a product: Consumers emphasize the benefits they receive from the product as the most important components of value.
3. Value is the quality I get for the price I pay: Consumers conceptualize value as a tradeoff between one “give”, price, and one “get” component, quality.
4. Value is what I get for what I give: Consumers consider all relevant “get” components as well as all relevant “give” components.
Five dimensions of consumer value influencing consumer choice
Consumer Choice Behavior
1. Functional Value: The perceive utility acquired from an alternative’s capacity for functional, utilitarian, or physical performance.
2. Social Value: The perceived utility acquired from an alternative’s association with one or more specific social groups.
3. Emotional Value: The perceive utility acquired from an alternative’s capacity to arouse feelings or affective states.
4. Epistemic Value: The perceive utility acquired from an alternative’s capacity to arouse curiosity, provide novelty, or satisfy a desire for knowledge.
5. Conditional Value: The perceived utility acquired by an alternative as the result of the specific situation or set of circumstances facing the choice maker.
Two dimensions of value: Utilitarian & Hedonic value
1. Utilitarian value: Utilitarian value incorporates cognitive aspects of attitude, such as economic value for the money and judgments of convenience and time savings (Zeithaml, 1988)
2. Hedonic value: The hedonic dimension is derived from a product’s (or service’s) uniqueness, symbolic meaning, or the emotional arousal it evokes (Holbrook, & Hirchman, 1982).
1. Expected Value: The expected or basic level is the level that is normal to that business or industry. The company provides those goods and services that customers have come to expect.
2. Desired Value: These are features that add value for the customer but simply are not expected because of company or industry standards.
3. Unanticipated Value: The organization finds ways to add value that is beyond the customer’s expectations or even desires, at least on a conscious level.
Quality is precursor to both value and satisfaction.
Value provides additional satisfaction; Satisfaction is derived from both quality and value.
“Customer value is a customer’s perceived preference for and evaluation of those product attributes, attribute performances, and consequences arising from use that facilitate achieving the customer’s goals and purpose in use situations.”
Desired Customer Value
Customers’ goals and purposes
Desired consequences in use situations
Desired product attributes and attribute performances
The development of multiple item scale to measure perceived value
Balance of benefits and sacrifices
Perceived product attributes
Value for the Customer (VC)
Option determined primarily on price
Monetary difference from objective reference point
Value for the Customer