Models to identify customer perceived value relationship

models to identify customer perceived value relationship

Originality/value: This study is the first study that tests the western model on south Customer Perceived Value; Customer's Perception of Public Relation; Brand. PDF | Customer perceived value has become the most extensive used concept in The Value hierarchy model conceptualize value into three hierarchy levels which In relation to that, Maslow postulated that the customers must first have . Keywords: customer perceived value, literature review, research agenda . and model taxonomy), we also identify directions for future applications of customer perceived value in relationship marketing, management, and business models.

On the other hand, the value of the product can also be seen from the perspective of how the product can give a pleasure to the customers.

From this perspective, the customer often considers that the experience in using the product is also part of their basic need when using the product. As the product is used or consumed, the good experience such as enjoyment from using the product will also influence the customer perception of product value. Holbrook and Hirschman ; Babin et al. Lai, emotional value e.

Mattsson, ; Sheth et al. While in particular, the subsequent study of Sweeney and Soutar developed the scale related to this dimension of value that includes enjoyment, relax, feeling good, and pleasure and referred it as emotional value, while Pura and Gummerus identified fun and teasing as part of emotional value in mobile service context. Although several authors argue that emotional value has greater effect than the functional value e. Hartman, ; Sweeney and Soutar, however both functional and emotional benefits of the product are important aspect in customer perceived value, and have positive affect on satisfaction and loyalty e.

Thus the model can be developed as below: Customer needs in product-related value 4. Social-Related Value In this category, social-related value is referred to the customer perspective that society is the source of value.

By source it means the customers view society as the place where they can obtain some benefits through the interaction with other people.

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These benefits can be seen from two fundamental perspectives of needs which are the need for acceptance and the need for compliment. In the first, the product is evaluated based on the perspective of how well it can help the customer to be accepted in the society. Since the customer himself is part of society either in small scale such as family or friends, or in big scale such as community, thus they need to interact with other people in which the consequences from using the product is more important than the function of the product itself Cova, In other words, the value can be obtained when the customer feels that they are connected to other people Sheth et al.

Several findings from previous studies have indicated that being accepted in the society is part of basic need that affects customer satisfaction and loyalty e.

Gallarza and Gil, As explained by Maslow being accepted in the society is part of deficit needs basic need in which the failure of the product to fulfil this need will cause uncomfortable feeling which leads to unfavorable attitude and unfavorable behavior towards particular product. Since the people in the society are governed by the norms or the values, thus they need to follow this rule in order to be accepted in the society. Conversely, the violation of the rules or the norms in society will cause the customer for being uncomfortable.

For example, considering Playboy is very famous and successful magazine in western countries, but not in another country such as Malaysia even it is banned due to it against the norm of Malaysia people as Muslims which can harm or destruct their beliefs. In relation to that, the involvement of the culture or the norms in the society will not only cause the social pressure to perform the behavior in question Fishbein and Ajzen, but also influences the customer perception of value since the customer is viewed as individual who is actualizing the cultural characteristic which depends on social shared values and norms Yang and Jolly, As stated by Sweeney and Soutar the customer perceived value may vary based upon the culture.

models to identify customer perceived value relationship

In other words, the customer perception of product value is subject or associated with the characteristic of the social environment such as the culture or the norm in the place where they live in Harris et al. This difference perspective of value not only can be found across the country due to national culture differences e. Nakata and Sivakumar, ; Yang and Jolly, however it might be found even within the same country which has many variety of cultures such as MalaysiaIndonesia, and many other countries.

Concerning with this matter, the cross-cultural researches have consistently recommended by not applying the same strategies for all the countries due to different country or society has different culture thus the people who live in that society may have different perspective of value towards particular product Lee et al.

The finding of previous studies also indicates that the need for acceptance or being accepted in the society is strongly related to the common perception or the common behavior held by the majority of the people who live in that particular area or society e.

Pavlou and Chai, ; Yang and Jolly, It can be said that in order to be accepted, the customer tend to follow or to accept the other perception and tend to behave as other behave.

In other words, particularly in society context, the customer may value certain product based on how other value that product how the other people will response or react to it. As explained in the theory of reason action Fishbein and Ajzen, the customers tend to perform the behavior according to what is expected by the people who are close or important to them such as family or friends, more specifically if the personality of the customer is weak Ha, This influence can be referred to the subjective norm whereby the customer is under larger of social pressure in which it will cause a cognitive conflict mental discomfort if the customer is too conservative or too liberal compared to the society Ha, This can be explained with the example of the group of people who believe that Japan is the best country in producing product-based technology, thus when it comes to purchase an electronic product, the customer as an individual who live in that society will have or use the same perception as others in which they evaluate the product not only based on the quality, however it also based on the country of origin where the product is made.

Conversely, purchasing the other product which has low reputation in society will cause the uncomfortable feeling.

For instance, instead of purchasing the Japan product, the customer purchase the product made in China whereby the common perception held by the society is that China product has poor or bad quality. Thus the customer will perceive a negative image and thus makes them uncomfortable.

However, not all of the perceptions in the society will be entirely adopted by its member customer in order for them to be accepted, in which some perceptions may be accepted by small group of people, while other perception may accepted by most of people in that society Lai, It can be said that the adoption of the perception or behavior in society might depends on the personal values such as the beliefs, goals, or principles that held by every individuals.

Thus they may accept and adopt this perception as long as it does not against their personal values yet they also have to follow the norms or culture in the society particularly if it is strongly related to the beliefs of majority people in that society. On the other hand, the value of the product can also be seen from the perspective of how the product can help to make good impression on others.

In this perspective the customer sees the society as the place where they can get compliment or appreciation from other people through the interaction. It indicates that compliments address the basic human need for recognition and being appreciated or respected. In order for the customer to gain recognition or being respected in the society, thus they tend to seek the product that can help to enhance their social self-concept Sweeney and Soutar, In this regard, Maslow describes the need for being appreciated or being respected as the higher level of customer basic need in which the failure to fulfil this need will make the individual feel anxious and tense.

The customers need to have self-esteem as they want to be recognized in the society, thus they tend to seek the fame or glory. In this perspective, the customer with low self-esteem often need respect from other people which includes the need for status, need for prestige, need for attention, need for recognition, etc.

All of these needs can be said are reflecting or leading to the desire for product that can help them look good and make a good impression on others. The compliments and positive feedbacks given to them regarding the product they use are very important to them as it can boost their self-esteem.

In this perspective, the customer tend to focus on how to impress others by purchasing the product that is seen as unusual in the society or environment such as high class product in which the majority of the people in the society cannot afford to purchase, or something that is scare to have so that people in that society will give attention to them, or something which is famous or popular in the society so that they can gain popularity.

As stated by Mason this type of customer conspicuous customer are likely to be inspired by the society rather than the economic or psychological utility, whereby in order to impress others, they tend to show their ability to pay particularly high prices for product prestige. This finding indicates that the need for good impression or to impress other is motivated by desire to be known or to be respected. Thus, all of these efforts can be said reflects the perception of impression value.

This includes the need for strength, need for freedom, need for self-confidence or independence and others. In other words, those with self-respect do not concern with other people think Langer, Since this need is more related to the personal-related purpose rather than social-related purpose, thus it will be considered as part of personal-related value that will be explained in the next sub topic. Based on the discussion above, it can be said that there are two types of customer needs that need to be considered when evaluating the value related to the society which are the need for acceptance and the need for compliment.

Customer needs in social-related value 4. Khalifa, ; Ledden et al. In which the former as a preference judgement and the latter as the criteria by which the people make such preference judgement e.

Thus in this study, personal-related value can be referred to the consumption benefits value that are strongly related to the values hold by the customer as a person - enduring beliefs that guide the way the people behave in daily life activities e. Rokeach, ; Kahle, Since every person customer has values, thus it influences their perception of value towards a product Oliver, ; Huber et al. This can be seen from the rational example of the customer who has strong concern about health, thus they usually expect the product e.

Thus their perception of value towards food differs from the person who has less concern about the health in which they may value the food based on its taste or the portion, etc. In other words, the consumption value can be obtained when the customer feels that the product can enhance their beliefs or in line with their characteristic, goal, philosophy, principles, or anything that they think is important for their life e. In relation to that, Maslow postulated that the customers must first have fulfilled the most basic need before they are going to have desire to fulfil the higher level of needs.

Since the basic purpose of purchasing the product is due to its functional value, thus the customers should first meet this need before they are going to consider the higher level of needs which are the personal-related value. Given the example at the above, in this case suppose the customer is hungry, then the first thing they are going to evaluate about the food is the taste and the portion of the foods.

Once the foods have fulfilled these criteria, then the customer is going to have a high level of desire which is related to their personal criteria such as the less fat food or organic food. Although in this case it might be possible for the customer will neglect the basic need portion or taste in order for them to achieve the highest level of needs e. In other words, it can be said that when the customer feels that the product is in line with their characteristic or beliefs fulfil personal-related valuethe increase of chances of a favorable response on lower level of need such as social and functional-related value are likely to be higher, thus they are likely to accept that value given at the minimum acceptable level due to the higher needs are fulfilled e.

Sweeney and Soutar, Personal-related value is strongly related to the self-concept held by the customer. As explained earlier in the social-related value context, the customer needs to have self-esteem in order to be respected in which they tend to seek the product that can help them to enhance their self-concept.

In other words, it can be said that the self-concept presented in the society is merely aimed to seek respect from others or known as social self-concept — how a person presents himself to others or how others perceived the customer Burns, In which the purpose of purchasing the product may not purely based on personal preference otherwise it may be inspired by society e. However, the self-concept in personal-related value is a higher level than the self-concept in social-related value, whereby the customer does not concern on getting respect from other people, but more importantly is how they respect their self as a person.

Maslow explained this as the higher version of self-esteem whereby the customers need to be their self as what they are, not because they want to be respected by others, but because they want to respect their self self-respect.

In other words, it is about how the customers perceived their self as a person actual self-concept Burns, Although the essence of society lies on its beliefs, behavior, norms and values that are commonly shared by individuals Leung et al. The customer may have different perspective about what is good and what is bad or what is important and not important with the society. As argued by Lai that some of social values might be followed by small portion of people, while other values might be accepted widely.

Thus it can be said that the value derived in personal-related context is very subjective in which it is strongly related to their unique characteristic and their goal in life. Several authors have argued that personal values play a center role in decision making process Zeithaml, while others argue that it is a goal or the purpose of purchasing a product Woodruff, It has been found that personal values significantly affect the customer perceived value in several field of studies such as service Ladhari et al.

Thus involving personal values in measuring customer perceived value is crucial since customer perception of value is very subjective e. In this study, personal-related value can be seen from two fundamental perspectives of needs related to their selves which are the needs for being own-self and the needs for doing good things in life.

In the first perspective, the customers value the product based on how fits it is with their characteristic.

models to identify customer perceived value relationship

Since the customer is an individual who is unique by nature, thus they tend to accept anything that they think is in line with their characteristic and reject anything that is not in line with their characteristic. As conceptualized by Holbrook that value is self-oriented in which the customer always think about their selves whenever they purchase the product including how they will react to it or how it has effect on them.

It can be said the value can be obtained when the customer feels that the product characteristic matches with the customer characteristic. In relation to that, several authors have argued that the need for being own-self is the highest level of needs which controls the needs of anything else.

As stated by Zeithaml in her means-ends theory, this personal characteristic plays as a center in defining value that helps to identify the desired product attribute. This perspective implies that the customer has different goal or reason in purchasing a product, thus has different perception of value.

The matching characteristic between the product and the customer can be seen from two aspects. At first, the customer may value the product based on its physical attribute such as the design, color, taste, function, etc.

models to identify customer perceived value relationship

It is purely based on the customer characteristic thus it gives them more value when it is matching with their own characteristic. Secondly, the customer may value the product based on the image it represents.

models to identify customer perceived value relationship

In this perspective, the value can be derived when the customer perceived their self-image matches with the product brand image. As the evaluation process involves the comparison between the self-image outcome e. It can be said that the greater the matches between self-image outcome and self-expectancythe more valuable the product to the customers, and vice versa. As the product brand serves as expressive devices, thus the customer prefer the brand that has closest image to their own De Chernatony and McDonald, Consequently, the perception of functional and social related value may be influenced by this personality concern depending on the strength of actual self-concept that the customer has.

In this regard the study of Pascale et al. The findings reveal that the customer actual self-concept is more associated with product-related value such as product functionality, while the ideal self-concept is more associated with social-related value such as social status. The study also found that the product evaluation of both functional and status-related product differs between the customers from different culture in this case between Malaysian customer and Australian customer.

The finding of this study indicates that the customer who has low self-esteem is likely to seek for social-related value e. Thus it can be said that in customer perceived value context, the personal related value does have effect on social and product related value. That's the keyC to anticipating their needs, to solving their problems, to bringing them opportunities they might not find on their own.

Indeed, creating superior customer value is a necessary condition for a company securing a niche in a competitive environment, not to mention a leadership position in the market Day According to Portera company can follow two generic routes to compete in a market: Day maintains that both approaches have the same objectiveC to create superior customer value, because "regardless of which of these routes is emphasized, the effort will fail unless significant customer value is created" Dayp.

Day addresses the issues in analyzing customer value and proposes that it can be expressed in a "value equation": Although Day's approach to customer value is basically sound, some details regarding consumer customers remain unclear.

For example, the process by which consumers perceive product benefits is nebulous: Day particularly addresses product valuation by industrial customers in detail, but this is only in principle a part of a much more complex process of product valuation by consumers.

Hence a theoretical framework which underlies the consumers' overall product valuation is still missing in the literature. Such a framework should address the issues of how consumers perceive the benefits and costs of products, as well as what possible benefits and costs consumers may perceive from products in the market.

The current paper tries to fill these gaps. In addition, the word "value" has discrepant meanings in the marketing literature, especially between its two areas: What marketing strategists mean by "customer value" is quite different from the meanings of the "consumer values" discussed in consumer behavior research Clawson and Vinson ; Kahle ; Peter and Olson ; Sheth, Newman and Gross ; Vinson, Scott and Lamont ; Wilkie Generally speaking, "customer value" focuses on the buyers' evaluation of product purchase at the time of buying, while "consumer values" stress people's valuation on the consumption or possession of products.

Actually, Day's approach to customer value Dayby emphasizing the customers' perceptions, indicates a direction in which the two different, but related, concepts of "value s " in marketing discipline might be integrated. The current paper helps accomplish this integration by suggesting a model of customer value for consumer markets. This paper first reviews the literature on consumption behavior analysis relevant to marketing strategy.

Next, a framework of product valuation for consumers and its typology of product benefit are proposed based on the consumption behavior analysis. After the process of product valuation for consumers has been made clear, the paper presents a comprehensive model of customer value for the consumer market integrating consumer values, product benefits, logistic benefits, and various costs of consumption.

In the proposed model, product benefits, logistic benefits, and costs are defined in terms of consumers' perception in the activities of acquisition, consumption or using and maintenance, as well as consumers' expectation of personal values satisfaction before buying. Finally, the implications of consumption behavior analysis for marketing strategy are discussed.

The importance of a comprehensive analysis of customers' consumption activities in planning effective marketing strategies was first pointed out by Boyd and Levy They maintain that marketing strategies should be planned and implemented in terms of the customer's needs and behavior patterns.

Also, the core element of an effective marketing plan is to think in terms of the "consumption system" in which the product plays a part. Boyd and Levy defined a consumption system as "the way a purchaser of a product performs the total task Underlying this systematic view of consumption are at least two concepts critical to customer value analysis.

First, this systematic view looks beyond the purchase behavior of buyers to the use behavior of consumers: Second, the systematic view emphasizes the dynamic interrelations between the products that comprise a consumption system: Based on their observation of the holistic nature of customer judgment, Day et al. In particular, Day and his colleagues endorsed a usage-situation approach to defining a product-market or competitive structure.

While the usage-situation approach is based on the holistic view of consumption behavior and is dubbed customer-oriented, it deals only with companies' need to define their product-market structures. It has nothing to do with the analysis of customer value and how this value can be expanded. As Solomon points out, conventional marketing research has paid much more attention to the substitutability of products than to their complementarity, and the usage-situation approach is no exception.

In summary, the literature on consumption behavior analysis can proceed further to conceptualize the aspects of complementarity-in-use of products through which consumer may derive product benefits holistically in the product complement. Based on consumption behavior analysis, the current paper proposes a framework of product valuation for consumers and its typology of product benefits see Figure 1.

This model stresses that to investigate the consumer's product valuation, it is necessary to integrate cultural values, personal values, consumption values, and product benefits Clawson and Vinson Cultural Values Cultural, social, and familial environments affect the formation and development of individual beliefs.

In a socio-cultural environment, a set of values usually represents widely shared beliefs about what is desirable. These socio-cultural beliefs are called cultural values or "society core values" Engel, Blackwell and Miniard and are implanted into individuals "naturally" through socialization and education, perhaps with some modification as personality and attitude moderate the learning process.

For example, Kahle proposes a "List of Values" LOV generic to American culture in the s, such as self-respect, security, self-fulfillment, fun and enjoyment in life, and warm relationships with others.

These cultural values are seen by some social thinkers as "objective" Frondizi This notion of being objective implies that they are commonly known to the members of a society. However, not all of the cultural values in a society will be adopted unanimously by its members.

models to identify customer perceived value relationship

Some cultural values might be followed by only a small portion of the people, while other values might be accepted widely. In sum, cultural values are generic beliefs about what a society argues to be desirable and beneficial.

These values are then freely adopted on an individual basis. Personal Values Personal values are the individuals' beliefs about what are desirable to themselves.

They are self-centered; that is, personal values are closely linked to needs. Moreover, they are derived from, and modified through, personal, social, and cultural learning Clawson and Vinson From a cognitive perspective, personal values are the mental representations of underlying needs after the modification, taking into account the realities of the world and reflecting the individual's personality Wilkie For example, the cultural value of "self-fulfillment" might be manifested quite differently in the minds of two individuals with different familial and personal backgrounds.

According to Rokeachhuman values have two main types: Terminal or end-state values are beliefs people have about the goals for which they strive e. Instrumental or means values are beliefs about desirable ways to attain these terminal values e.

Therefore, personal values generally correspond to terminal values, while values of desirable activities to be discussed next are comparable to instrumental values. Personal values are enduring beliefs which guide various actions and judgments across specific situations. Hence, personal values are more abstract and may be generalizable easier than values of actions. In other words, the concept of personal values is similar to the idea of "global values" in the realm of a person's perception proposed by Vinson et al.

Consumption Values Consumption values refer to subjective beliefs about desirable ways to attain personal values. People achieve personal values or goals through actions or activities, such as social interaction, economic exchange, possession, and consumption Sheth et al. According to means-end chain models of consumer product knowledge Peter and Olsonpeople may have ideas and preferences about various actions that can help them achieve personal values.

Perceived Value

Therefore, relative to personal values, consumption values are instrumental in nature. For example, owning an elegant house and acquiring a prestigious car are for some people desirable ways of achieving self-fulfillment. Attending football games especially those of favorite teams and taking a vacation trip are favorable activities which lead to personal fun and enjoyment.

Furthermore, individuals may hold several personal values by which they direct or evaluate consumption activities. Therefore, the consumption values of these types of activities or possessions are sophisticated and do not simply satisfy one single personal value Shet et al. As we can observe in ourselves or others, consumption activities usually include an assortment of goods and services Boyd and Levy For example, "owning an elegant house" requires house owners to acquire many goods and services in addition to the house itself, just as "taking a vacation trip" involves many other related acquisitions.

Moreover, in a product constellation for a consumption activity, there may be some properties in common. McCracken observes that "the consumer goods in any complement are linked by some commonality or unity" p. From a social interaction perspective, Solomon maintains that consumers employ product constellations in "setting the stage" for the social roles they play. Product constellations occur, because individuals use entire complements of products to achieve personal values.

The products unified in a constellation all carry the same information about individual values. Furthermore, Lai maintained that consumers may obtain satisfaction holistically from the related consumption activities and the constellation of products in use. Consumption Schemata Cognitive psychologists maintain that people may acquire knowledge structures to represent various consumption activities and product constellations Abelson ; Crocker Lai uses the term consumption schema to refer to the cognitive structure which organizes and represents personal ideas and beliefs about the substance of a consumption activity, such as interrelationships among complementary products, the cultural value and social meanings of the commodities, and personal preferences and affective associations.

Hence, a consumption schema represents a consumer's basic thoughts about a consumption activity, though peripheral adjustments may be needed to accommodate the specific situation in which the consumption takes place. In short, in consumption, or possession of products, people may acquire personal consumption schemata or a particular planned patternincluding their anticipation of and requirements for a product or a complement of productsreflecting their consumption values of that consumption or possession.

Typology of Product Benefits From the customers' perspective, products are viewed as a bundle of benefits, not attributes Day ; Peter and Olson In other words, "customers are less interested in the technical features of a product or service than in what benefits they get from buying, using or consuming the product.

By designing products with combinations of these attributes, marketers try to attract consumers with particular consumption values. A comprehensive understanding of possible benefits that customers may seek in products is a fundamental basis for marketers to formulate sound marketing strategies, especially product differentiation or positioning Peter ; Boyd and Levy However, these benefits are only generic; that is, they are general, potential, and not yet applied to a specific consumption activity.

Moreover, because Sheth et al. Furthermore, their categorization ignores other important generic product benefits: Going beyond Sheth et al.

The typology includes eight generic product benefits: The definitions of these terms are discussed briefly in what follows: Functional benefits are derived from the tangible and concrete attributes that a consumer may directly experience when using or consuming the product. Highly visible products e.

Affective benefits are often associated with cultural-ethnic meanings e. Exploratory, novelty-seeking, and variety-seeking consumption behaviors are examples of epistemic value pursuit. Also, a consumer's propensity to adopt new products is consistent with epistemic benefit Sheth et al. Aesthetic benefit usually is subjective and idiosyncratic. Style demands, product-appearance demands, art purchases, and fashion-following are examples of consumers' pursuing aesthetic benefits. Olshavsky and Granbois claim that hedonic benefit is an important dimension of many products.

People are not always looking for rational or "serious" benefits; they may want to relax or be distracted. Taking a vacation trip, going to bars, watching sports, comic movies or TV programs, or even buying funny trinkets to make fun of friends are examples of hedonic benefit pursuit.

A product acquires situational value in the presence of antecedent physical or social contingencies that enhance its functional, social, or other benefits. Situational benefit is measured on the profile of a particular consumption situation.

Holistic benefits are frequently required and perceived in clothes, furniture, and food consumption. Holistic product benefit is a result of "synergy" derived from a product combination. Its implications for marketing strategy will be discussed later in detail. Different types of product benefits may be correlated and combined in particular consumption activities, or there may be trading off between them. In addition, a product may offer multiple generic benefits. For example, "to a first-time home buyer, the purchase of a home might provide functional [benefit] the home contains more space than the present apartmentsocial [benefit] friends are also buying homesemotional [benefit] the consumer feels secure in owning a homeepistemic [benefit] the novelty of purchasing a home is enjoyableand situational [benefit] starting a family " [The braces are the author's, to substitute the word "benefit" for the original word "value" and avoid confusion.

The parentheses, however, are in the original passage. Perceived Product Benefits Generic product benefits are intended benefits that manufacturers design into a product. However, these intended benefits may or may not be perceived or appreciated by particular consumers. A product has benefit to customers to the degree that they can perceive, appreciate and then use that product as anticipated consumption activities to achieve personal values.

Normann and Ramirez recapitulate this concept well; "A company's offerings have values to the degree that customers can use them as inputs to leverage their own value creation. In this respect, then, companies don't profit from customers.

They profit from customers' value-creating activities" p.