Psychological Value: The extent to which a product allows consumers to express themselves or feel better.įor 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. Social Value: The extent to which owning a product or engaging in a service allows the consumer to connect with others. This value invites a trade-off between other values and monetary costs. Monetary Value: This is where the function of the price paid is relative to an offerings perceived worth. Values should always be defined through the "eyes" of the consumer.įunctional Value: This type of value is what an offer does, it's the solution an offer provides to the customer. How important a value is, depends on the consumer and the purchase. The sources of value are not equally important to all consumers. The four types of value include: functional value, monetary value, social value, and psychological value. With a consumers' wants and resources (financial ability), they demand products and services with benefits that add up to the most value and satisfaction. When wants are backed by buying power, they become demands. Both culture and individual personality shape human needs in what is known as wants. The basic human needs may include food, shelter, belonging, love, and self expression.
The basic underlying concept of value in marketing is human needs. Value may also be expressed as a straightforward relationship between perceived benefits and perceived costs: Value = Benefits - Cost. 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.
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