Value (marketing)

Marketing
Key concepts
Product marketing · Pricing Distribution · Service · Retail Brand management Account-based marketing Ethics · Effectiveness · Research Segmentation · Strategy · Activation Management · Dominance Marketing operations
Promotional content
Advertising · Branding · Underwriting Direct marketing · Personal sales Product placement · Publicity Sales promotion · Sex in advertising Loyalty marketing · SMS marketing Premiums · Prizes
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Printing · Publication · Broadcasting Out-of-home advertising · Internet Point of sale · Merchandise Digital marketing · In-game advertising In-store demonstration · Word-of-mouth Brand ambassador · Drip marketing · Visual merchandising
v · d · e

The value of a product is the mental estimation a consumer makes of it. Formally it may be conceptualized as the relationship between the consumer's perceived benefits in relation to the perceived costs of receiving these benefits. It is often expressed as the equation  :

Value = Benefits / Cost

Value is thus subjective (i.e., a function of consumers' estimation) and relational (i.e., both benefits and cost must be positive values).

There are parallels between cultural expectations and consumer expectations. Thus pizza in Japan might be topped with tuna rather than pepperoni, as pizza might be in the US; the value in the marketplace varies from place to place as well as from market to market.

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.

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.

For an individual to deliver value, one has to grow his or her knowledge and skill sets to showcase benefits delivered in a transaction (e.g., getting paid for a job).

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.

Value changes based on time, place and people in relation to changing environmental factors. It is a creative energy exchange between people and organizations in our marketplace.

Methods

• Shareholder value
• Value (economics)

References

• Peter Doyle: Value-Based Marketing: Marketing Strategies for Corporate Growth and Shareholder Value. Wiley, 2000.
• Raquel Sánchez-Fernández and M. Ángeles Iniesta-Bonillo, "The concept of perceived value: a systematic review of the research," Marketing Theory 7 (2007), 427-451
• Turel, O., Serenko, A. and Bontis, N. (2007). "User acceptance of wireless short messaging services: Deconstructing perceived value." Information & Management 44(1): 63-73.