Value
DESCRIPTION
What something is perceived to be worth.
What something is perceived to be worth.
KEY INSIGHTS
The value of an offering, as perceived by a consumer, is the estimation of the merit of the offering in terms of money, quality, or any other measure of worth. For example, value can be assessed in terms of the offering’s perceived benefits in relation to its price or perceptions of actual quality in relation to expected quality. The notion of value provides a basis for most marketing approaches. For example, it strongly links to relationship marketing, where providing superior value to the customer is the way to establish and maintain long-term relationships. If the ultimate aim is to enhance customer loyalty, value-adding attempts have to be customer oriented, rather than focused only on investing more on product development (Ravald and Groenroos 1996). Shareholder value is also an important outcome achievable through value chain analysis, for example (see value chain analysis).
The value of an offering, as perceived by a consumer, is the estimation of the merit of the offering in terms of money, quality, or any other measure of worth. For example, value can be assessed in terms of the offering’s perceived benefits in relation to its price or perceptions of actual quality in relation to expected quality. The notion of value provides a basis for most marketing approaches. For example, it strongly links to relationship marketing, where providing superior value to the customer is the way to establish and maintain long-term relationships. If the ultimate aim is to enhance customer loyalty, value-adding attempts have to be customer oriented, rather than focused only on investing more on product development (Ravald and Groenroos 1996). Shareholder value is also an important outcome achievable through value chain analysis, for example (see value chain analysis).
KEYWORDS Worth, perceived value, added value
IMPLICATIONS
Adding value to products and services entails not only improving customers’ perceived value through increasing benefits, but also working to reduce costs or customer-perceived sacrifices (Monroe 1991). Such a view suggests that marketers’ firms may benefit in pursuing cost leadership in combination with differentiation strategies aimed at providing value to the firm’s customers.
Adding value to products and services entails not only improving customers’ perceived value through increasing benefits, but also working to reduce costs or customer-perceived sacrifices (Monroe 1991). Such a view suggests that marketers’ firms may benefit in pursuing cost leadership in combination with differentiation strategies aimed at providing value to the firm’s customers.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Ravald, A., and Groenroos, C. (1996). ‘The Value Concept and Relationship Marketing,’ European Journal of Marketing, 30(2), 19–30.
Ravald, A., and Groenroos, C. (1996). ‘The Value Concept and Relationship Marketing,’ European Journal of Marketing, 30(2), 19–30.
Retail Marketing
Dawar, Niraj, and Parker, Philip (1994). ‘Marketing Universals: Consumers’ Use of Brand Name, Price, Physical Appearance, and Retailer Reputation as Signals of Product Quality,’ Journal of Marketing, 58(2), April, 81–95.
Dawar, Niraj, and Parker, Philip (1994). ‘Marketing Universals: Consumers’ Use of Brand Name, Price, Physical Appearance, and Retailer Reputation as Signals of Product Quality,’ Journal of Marketing, 58(2), April, 81–95.
Services Marketing
Devlin, J. F. (2000). ‘Adding Value to Retail Financial Services,’ International Journal of Bank Marketing, 18(4–5), 222–232.
Devlin, J. F. (2000). ‘Adding Value to Retail Financial Services,’ International Journal of Bank Marketing, 18(4–5), 222–232.
Business-to-Business Marketing
Anderson, J. C., and Narus, J. A. (1998). ‘Business Marketing: Understand What Customers Value,’ Harvard Business Review, 76(6), 53–67.
Anderson, J. C., and Narus, J. A. (1998). ‘Business Marketing: Understand What Customers Value,’ Harvard Business Review, 76(6), 53–67.
Eggert, A., and Ulaga, W. (2002). ‘Customer Perceived Value: A Substitute for Satisfaction in Business Markets?’ Journal of Business and Industrial Marketing, 17(2–3), 107–118.
Online Marketing
Breitenbach, C. S., and Van Doren, D. C. (1998). ‘Value-Added Marketing in the Digital Domain: Enhancing the Utility of the Internet,’ Journal of Consumer Marketing, 15(6), 558–575.
Breitenbach, C. S., and Van Doren, D. C. (1998). ‘Value-Added Marketing in the Digital Domain: Enhancing the Utility of the Internet,’ Journal of Consumer Marketing, 15(6), 558–575.
Consumer Behavior
Zeithaml, Valerie A. (1988). ‘Consumer Perceptions of Price, Quality, and Value: A Means–End Model and Synthesis of Evidence,’ Journal of Marketing, 52 (July), 2–22.
Zeithaml, Valerie A. (1988). ‘Consumer Perceptions of Price, Quality, and Value: A Means–End Model and Synthesis of Evidence,’ Journal of Marketing, 52 (July), 2–22.
BIBLIOGRAPHY
Wood, L. M. (1996). ‘Added Value: Marketing Basics?’ Journal of Marketing Management, 12(8), 735–755.
Wood, L. M. (1996). ‘Added Value: Marketing Basics?’ Journal of Marketing Management, 12(8), 735–755.
Monroe, Kent B. (1991). Pricing: Making Profitable Decisions. New York: McGraw Hill.
value, characteristics theory of see characteristics theory