What’s it: Perceived value is a consumer’s estimate or interpretation of a product’s worth. It may be subjective between individuals. You and your friends may give different values for the same product.
A product’s success 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 matters
This concept is essential in marketing. When consumers perceive a product as valuable, they are willing to pay a higher price. Otherwise, if they don’t, they are not buying or are only willing to pay a low price.
Perceived value is the reason why customers buy products. It should at least equal the money and effort the customer puts in to buy. If it is lower, they will look for alternative products that are more satisfying.
Satisfaction does not only depend on the product’s price and attributes, such as features and performance. However, it also depends on other marketing mix elements such as branding, promotion, and product availability. Customer relationship management is also vital for high customer satisfaction. And, it all contributes to the emotional bonding between the customer and the company and its offerings.
Determinants of customer perceived value
The following factors determine the value that customers feel about a product:
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- Product performance – This includes the benefits of the item’s features, durability, model, design, and reliability. For service, it is how quickly and precisely the company provides a satisfactory solution for customers.
- Customer relations – One of which is related to employees’ ability, knowledge, and expertise in handling and providing customer solutions. Customer relationships are important for creating an emotional bond between brands, products, companies, and customers.
- Image – The reputation of the product and company is a consideration for consumers in choosing products. For example, a company’s reputation may come from operating and developing environmentally friendly products.
- Costs – These include prices, which represent monetary costs. Besides, consumers also bear the time and effort costs of obtaining products, such as transportation costs.
The main factors may vary between products, depending on the nature of the goods and services offered. For educational services, for example, the influencing factors of the perceived value are:
- Company image
- Cost
- Employee trust
- Quality of service
Perceived values also differ between individuals due to differences in factors such as age, education, occupation, and in general, geographic, demographic, and psychographic attributes. Each individual can give a different value according to their background.
