Unique value effect
DESCRIPTION
An effect on consumer price sensitivity resulting from a product or service offering’s unique features and benefits.
An effect on consumer price sensitivity resulting from a product or service offering’s unique features and benefits.
KEY INSIGHTS
When a product or service offers unique value to potential customers as a result of having one or more desirable features or benefits that are not available or replicated in competing products in the market, the unique value of the product or service has the potential to significantly influence the consumer’s price sensitivity toward the offering. In particular, uniqueness in the value of an offering is associated with a lowering of consumer price sensitivity to the offering as well as an increase in the price the consumer is willing to pay for it.
When a product or service offers unique value to potential customers as a result of having one or more desirable features or benefits that are not available or replicated in competing products in the market, the unique value of the product or service has the potential to significantly influence the consumer’s price sensitivity toward the offering. In particular, uniqueness in the value of an offering is associated with a lowering of consumer price sensitivity to the offering as well as an increase in the price the consumer is willing to pay for it.
KEYWORDS Value, uniqueness, price sensitivity, willingness-to-pay
IMPLICATIONS
Marketers involved in developing new product or service offerings as well as in setting their prices should strive to understand consumer price sensitivity to the offering in order to manage its price effectively. Recognizing how and to what extent lower price sensitivity and higher willingness-to-pay may be achievable as a result of developing and providing an offering of unique value can be beneficial in setting prices and in managing price changes when a product’s unique value varies as competing product characteristics change.
Marketers involved in developing new product or service offerings as well as in setting their prices should strive to understand consumer price sensitivity to the offering in order to manage its price effectively. Recognizing how and to what extent lower price sensitivity and higher willingness-to-pay may be achievable as a result of developing and providing an offering of unique value can be beneficial in setting prices and in managing price changes when a product’s unique value varies as competing product characteristics change.
APPLICATION AREAS AND FURTHER READINGS
Pricing
Kupiec, B., and Revell, B. (2001). ‘Measuring Consumer Quality Judgments,’ British Food Journal, 103(1), 7–22.
Kupiec, B., and Revell, B. (2001). ‘Measuring Consumer Quality Judgments,’ British Food Journal, 103(1), 7–22.
Sullivan, P. (2003). ‘Comparing Price Sensitivity Research Models for New Products,’ Product Innovation and Management, August, School of Business Administration, Portland State University.
BIBLIOGRAPHY
Rao, Vithala R. (1984). ‘Pricing Research in Marketing: The State of the Art,’ Journal of Business, 57(1), Part 2, S39–S60.
Rao, Vithala R. (1984). ‘Pricing Research in Marketing: The State of the Art,’ Journal of Business, 57(1), Part 2, S39–S60.