The value in the context of marketing refers to the Customer- perceived value, which refers to the evaluation of a prospective customer’s benefit and costs derived from one product in comparison to others. In simpler words, it is the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives. The customer wishes to drive the maximum value out of the goods he buys.
The value concept is directly linked to the human needs. When the human desire to have some product to meet their need and which could satisfy them; and when it is backed by the purchasing power, it becomes a demand. The customer tries to maximize his satisfaction by the consumption of those goods and services. This derives value to him.
From a customer’s point of view,
Value refers to: Functional +emotional benefits
Cost refers to: Monetary Costs + Time cost + Energy Cost + Psychic costs
It is apparent from the above equations that increasing value of customer offering can be done by raising benefits, reducing costs, raising benefits & reduce costs or by raising benefits by more than the raise in costs.
There are 4 types of values that a customer derives by consuming the product:
These values are subject to change with the changes in the tastes and preferences of the customers as well as changes in the environment. Thus it is very important to keep a track of these activities so as to manage everything. It is the duty of the managers to keep a check on these changes. The managers need to conduct analysis of the situations so as to know where the business stands and what are its strengths and weaknesses.
For this purpose following are the steps that need to be followed:
Thus from above discussion it is clear that while analyzing and evaluating the customer perceived value various precautions and studies need to be done. Following are the aspects that must be taken into consideration while studying Customer Perceived Value.
Value Proposition: Value Proposition refers to the comparison between the benefits derived by the individual to the cost incurred by him to acquire the product. The difference between the cost and the benefit derived from the product should be more. If the customer has to spend more than the benefit he is getting, it will not be creating any value to the customer. Hence he will give up the product. Companies generally have the power to influence the value proposition. It can be done in two ways i.e.; they can use long-term brand building advertising to emphasize key traits of the brand and products or they can also offer a relatively low cost to enhance value. Whatever step the company choses, it must be able to provide more of the benefits to the customers as compared to the cost charged from them.
Research: Most of the businesses fail due to lack of research. A good and in - depth research helps in tackling all the situations that can come up in the business. The marketers must do a proper research and understand how certain types of consumers will respond to certain messages in those media. Companies should get feedback from the customers using focus groups, surveys, pilot testing and other research tools. This will help the business to understand the consumer properly and the business will be in a better place to influence the customers to purchase the product.
Messages: The marketers send the messages to the customers with the aim of influencing them to buy the product. These messages are such forms of invitations or advertisements that they attract the customer to buy the product. The messages play a vital role to supply the information to the customers. Thus this message must be formed very carefully in such a way that it engages the customer. The message should be sent through an appropriate media. To influence the customer value perception, the marketers should send those marketing messages consistently and appropriately.
Brand Imaging: It is an important task to instill an image of the brand in the customer’s mind and create a value perception for the brand with the customer. This will help the business to retain the customer for a longer period of time.
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