Perceived Value: Definition, Determining Factor

By | Januari 11, 2022

What it is: Perceived value , or perceived value, is a consumer’s estimate or interpretation of the worth of a product. It may be subjective between individuals. You and your friends may give different ratings for the same product. 

The success of a product is based on whether customers believe that it can satisfy their wants and needs. Long story short, it depends on the customer’s perception.

Why perceived value is important

This concept is important in marketing. When consumers perceive a product as valuable, they are willing to pay a higher price. Otherwise, they either don’t buy or are only willing to pay a low price.

Perceived value is the reason why customers buy the product. It should at least equal the money and effort the customer puts into buying. If it is lower, they will look for alternative products that are more satisfying.

Satisfaction does not only depend on the price and attributes of the product such as features and performance. But, it also depends on other marketing mix elements like branding, promotion and product availability. Customer relationship management is also important for high customer satisfaction. And, they all contribute to the emotional bond between customers and the company and its offerings.

Determinants of customer perceived value

The following are the determinants of the customer’s perceived value for a product:

  • Product performance – This includes benefits related to the features, durability, model, design and reliability of the item. For service, it is how quickly and precisely the company provides a satisfactory solution for the customer.
  • Customer relations – One of them is related to the ability, knowledge, and expertise of employees in handling and providing solutions to customers. Customer relationships are important for creating emotional bonds between brands, products and companies and their customers.
  • Image – The reputation of the product and the company is considered by consumers in choosing a product. For example, a company’s reputation may stem from operating and developing environmentally friendly products.
  • Cost – It includes the price, which represents the monetary cost. In addition, consumers also bear the cost of time and effort to obtain products such as transportation costs. 

Key factors may vary between products, depending on the nature of the goods and services offered. For educational services, for example, the factors that influence perceived value are:

  • Company image
  • Cost
  • Employee trust
  • Service quality

Perceived value also differs between individualsdue to differences in factors such as age, education, occupation, and in general, geographic, demographic and psychographic attributes. Each individual can give a different assessment according to their background.

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