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CSR 631 Research Stream. Consumer value. Jooyeon Ha. Contents. Foundation : Value theory 1970s 1980s 1990s 2000s. Value Theory.

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contents
Contents
  • Foundation : Value theory
  • 1970s
  • 1980s
  • 1990s
  • 2000s
value theory
Value Theory
  • Value theory encompasses a range of approaches to understanding how, why, and to what degree humans should or do value things, whether the thing is a person, idea, object, or anything else.
  • This investigation began in ancient philosophy, where it is called axiology or ethics. Early philosophical investigations sought to understand the concept of "the good". Today much of value theory is scientifically empirical, recording what people do value and attempting to understand why they value it in the context of psychology, sociology, and economics.
slide4

1970

  • Hunt, S. D. (1976): Value in marketing

The basic subject matter of marketing includes all transaction that involve any form of exchange of values between parties.

  • Monroe, K. B. (1979): Price as an index of Value

Value: The number of units of quality per dollar expenditure

Value = quality/price

= perceived quality as a function of price/price

slide6

Holbrook, M. B. (1984)

Typology of consumer value

slide7

Thaler. R. (1985)

: 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.

  • Buyers evaluate a purchase opportunity by first judging the value of the offer and then deciding whether to make the purchase.
  • Price plays a role in the evaluation process.
slide8

Perceived Quality

+

+

  • Dodds, W. B., & Monroe, K. B (1985)

+

Price

Perceived Value

Willingness to Buy

_

+

Sacrifice

  • Buyers use price as an index of perceived product quality as well as an index of the perceived sacrifice that is made when purchasing a product.
  • Perceived value represents a trade-off between buyers’ perceptions of quality and sacrifice and is positive when perceptions of quality are greater than the perceptions of sacrifice.
slide9

Monore, K. B., & Champman, J. D. (1987)

Acquisition Value vs. Transaction Value

  • Acquisition Value: The perceived benefits inherent in the product compared to the sacrifices and is defined as (maximum acceptable price – actual price).
  • Transaction Value: The perceived merits of the offer and is defined as (reference price – actual price).

PV = acquisition value + transaction value

slide10

Zeithaml, V. A. (1988)

  • Four dimensions of 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.

slide12

Sheth, J. N., Newman, B. I., & Gross, B. L. (1991)

Five dimensions of consumer value influencing consumer choice

Functional

Value

Conditional

Value

Social

Value

Consumer Choice Behavior

Emotional

Value

Epistemic

Value

slide13

Five dimensions of value

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.

slide14

Babin, B. J., Darden, W. R., & Griffin, M. (1994)

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).

slide16

Butz, H. E., & Goodstein, L. D. (1996)

  • Customer Value: The emotional bond established between a customer and a producer after the customer has used a product or service.
  • Three levels of Customer Value

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.

slide17

Oliver, R. L. (1996)

  • Perceived quality- Consumer value – Satisfaction

Quality is precursor to both value and satisfaction.

Value provides additional satisfaction; Satisfaction is derived from both quality and value.

Consumer

Value

Satisfaction

Quality

slide18

Woodruff, R. B. (1996, 1997)

  • The customer value hierarchy

“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.”

slide19

Customer satisfaction with Received Value

Desired Customer Value

  • Customer Value Hierarchy Model

Customers’ goals and purposes

Goal-based satisfaction

Consequence-based satisfaction

Desired consequences in use situations

Attribute-based satisfaction

Desired product attributes and attribute performances

slide21

Sweeney, J. C., & Soutar, G. N. (2001)

The development of multiple item scale to measure perceived value

  • Four dimensions of value
slide23

Woodall, T. (2003): Value for the Customer (VC)

  • Five primary VC forms

Balance of benefits and sacrifices

Net VC

Perceived product attributes

Use/experience outcomes

Marketing

VC

Derived

VC

Value for the Customer (VC)

Option determined primarily on price

Monetary difference from objective reference point

Sale

VC

Rational

VC

slide24

Relational interpretation of VC

Best

Profit

Worst

Net VC

Marketing VC

Rational VC

Derived VC

Aggregated VC

Value for the Customer

Satisfaction

Loyalty

Profit