Value (marketing

)
Value in marketing, also known as customer-perceived
value, is the difference between a prospective customer’s
evaluation of the benefits and costs of one product when
compared with others. Value may also be expressed as
a straightforward relationship between perceived benefits
and perceived costs: Value = Benefits / Cost.

For an organization to deliver value, it has to improve
its value : cost ratio. When an organization delivers
high value at high price, the perceived value may be
low. When it delivers high value at low price, the perceived value may be high. The key to deliver high perceived value is attaching value to each of the individuals
or organizations—making them believe that what you are
offering is beyond expectation—helping them to solve a
problem, offering a solution, giving results, and making
them happy.

The basic underlying concept of value in marketing is human needs. The basic human needs may include food,
shelter, belonging, love, and self expression. Both culture
and individual personality shape human needs in what
is known as wants. When wants are backed by buying Value changes based on time, place and people in relation
to changing environmental factors. It is a creative energy
power, they become demands.
With a consumers wants and resources (financial ability), exchange between people and organizations in our marthey demand products and services with benefits that add ketplace.
up to the most value and satisfaction.

Very often managers conduct customer value analysis to
reveal the company’s strengths and weaknesses compared
The four types of value include: functional value, monetary value, social value, and psychological value. The to other competitors. the steps of which are as followed.
sources of value are not equally important to all consumers. How important a value is, depends on the con• To identify the major attributes and benefits that
sumer and the purchase. Values should always be defined
customers value for choosing a product and vendor.
through the “eyes” of the consumer.
• Assessment of the quantitative importance of the
Functional Value: This type of value is what an offer
different attributes and benefits.
does, it’s the solution an offer provides to the customer.
• Assessment of the company’s and competitors’ performance on each attribute and benefits.

Monetary Value: This is where the function of the price
paid is relative to an offerings perceived worth. This value
invites a trade-off between other values and monetary
costs.

• Examining how customer in the particular segment
rated company against major competitor on each attribute.

Social Value: The extent to which owning a product or
engaging in a service allows the consumer to connect with
others.

• Monitor customer perceived value over time.

Psychological Value: The extent to which a product allows consumers to express themselves or feel better.

1 References

For a firm to deliver value to its customers, they must consider what is known as the “total market offering.” This
includes the reputation of the organization, staff representation, product benefits, and technological characteristics
as compared to competitors’ market offerings and prices.
Value can thus be defined as the relationship of a firm’s
market offerings to those of its competitors.

• Peter Doyle: Value-Based Marketing: Marketing
Strategies for Corporate Growth and Shareholder
Value. Wiley, 2000.
• Raquel Sánchez-Fernández and M. Ángeles IniestaBonillo, “The concept of perceived value: a systematic review of the research,” Marketing Theory
7 (2007), 427-451

Value in marketing can be defined by both qualitative and
quantitative measures. On the qualitative side, value is the
perceived gain composed of individual’s emotional, mental and physical condition plus various social, economic,
cultural and environmental factors. On the quantitative
side, value is the actual gain measured in terms of financial numbers, percentages, and dollars.

• Turel, O., Serenko, A. and Bontis, N. (2007).
“User acceptance of wireless short messaging services: Deconstructing perceived value.” Information
& Management 44(1): 63-73.
1

Pearson. Mithileshwar Jha: “Marketing Management: A south Asian Perspective”.2 1 • Philip Kotler. Abraham Koshy. REFERENCES . 13th Eidition(2009) 117-121. Kevin Lane Keller.

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