Customer Perceived Value

Definition: Customer Perceived Value

It is the value that a customer perceives to obtain by buying a product. It is the difference between the total obtained benefits according to the customer perception and the cost that he had to pay for that. The customer will buy the same product again only if he perceives to be getting some value out of the product. Hence delivering this value becomes the motto of marketers.

Perceived Value = Total Perceived Benefits – Total Perceived Costs

The benefits and costs also include the emotional benefits and costs.

Global Smartphone shipments share in the first quarter of 2015

Samsung contributes near to 25% of the world market ,apple with 18% and follow on.

Why people are buying more Samsung Smartphones than Apple?

Price???

iPhone 6, at $599 for 16GB and $699 for 64GB

Galaxy S the Samsung Vibrant for $199

Samsung's rise has been driven by:

a blend of elegant hardware designs (Functional Value)

popular Android services, (Social Value)

memorable sub-brands and (Emotional Value)

extensive global distribution (Functional Value)

Source: BBC(October 28, 2011)

Identifying Customer Perceived Value of Apple Smartphone (iPhone)

Customer perceived value=Benefits/costs

Even though Apple’s Smartphone market share felt, many sources revealed that it is due to the delaying  in launching iPhone 5 (BBC, October 28, 2011).

Customer Perceived value of iPhone can be analyzed using Seth, Newman and Gross’s consumption value model

Model of Consumption Values

Functional  Value

The perceived utility acquired from an alternative’s capacity for functional, utilitarian, physical performance. An alternative acquires functional value through the possession of salient functional, utilitarian, or physical attributes (reliability, durability, and price). Functional value is measured on a profile of choice attributes.

 Social Value

 The perceived utility acquired from an alternative’s association with one or more specific social groups. An alternative acquires social value through association with positively or negatively stereotyped demographic, socioeconomic, and cultural-ethnic groups.  Social value is measured on a profile of choice imagery.

 Emotional Value

The perceived utility acquired from an alternative’s capacity to arouse feelings or effective states.An alternative acquires emotional value when associated with specific feelings or when precipitating or perpetuating those feelings.Emotional value is measured on a profile of feelings associated with the alternative. The perceived utility acquired from an alternative’s capacity to arouse curiosity, pro-vide novelty, and/or satisfy a desire for knowledge.An alternative acquires epistemic value by questionnaire items referring to curiosity, novelty, and knowledge.

Conditional Value

The perceived utility acquired by an alternative as the result of the specific situation or set of circumstances facing the choice maker. An alternative acquires conditional value in the presence of antecedent physical or social contingencies that enhance its functional or social value. Conditional value is measured on a profile of choice contingencies.

Customer Perceived Value: Smartphone (iPhone)

Functional Value

A defining functional value of the smart phone offering is born from the integration of many utilitarian attributes into a single, mobile, always-available device. constant access to the internet, search, and email; coupled with telephony and text messaging satisfy many modern ICT needs. The ability to navigate unfamiliar areas with GPS adds value

The MP3 player, games, and other entertainment features plus productivity tools like the calendar and address books, add additional functional value to the device

The ability to download additional games and productivity tools from a big software library further enhances the user experience

Customer Perceived Value: Smartphone (iPhone)

Social Value

Significant social value is embedded and conveyed through the iPhone itself. It can generate conversations as people ask questions and strike up conversations.  It serves as an icebreaker for users to begin talking to other users, thereby facilitating social interaction and forming new relationships

The iPhone provides social value by helping the owner convey an image to others in a way similar to many fashion items.

 It is a type of personal branding that sends a message to affect friendships and relationships.

Customer Perceived Value: Smartphone (iPhone)

Emotional Value

 Emotional need to be connected to others, similar to Maslow’s (Maslow, 1946) need of belonging

Constant connectivity helps fulfill this emotional need.

For example, access to social networks and Twitter enables people to maintain their social relationships in different ways than other types of communication.

Communication features such as telephone and SMS provide a connection to family and friends. Having multiple, different communication media make it easy to maintain relationships with people with whom he might otherwise lose contact Aside from facilitating a sense of belonging, a smart phone’s integrated technologies provide tools for altering one’s emotional state. Many participants use the music player because music can change their mood. Others use specific add-on applications.

In addition to the emotion-enabling features, the device itself can trigger emotions through iPhone design (beautiful and esthetic feelings) Stores photo albums on the phone, describes the familiar feeling enabled by iPhone making customer feel secure.

Customer Perceived Value: Smartphone (iPhone)

Epistemetic Value

The iPhone satisfied epistemic value in multiple ways

First, the artifact itself inspires curiosity. People like exploring new technology, learning how to use a new device, and experiencing a GUI. As such, the device itself provides novelty value (“cool factor”) and appeals to those seeking to satisfy their curiosity iPhone derives epistemic value is through the availability of downloadable applications and various media. Thousands of programs are available for download, many of which are free. Access to websites like YouTube also provide a constant stream of novelty.

Finally, the integration of a standard web browser enables users to find whatever information they seek. This helps satisfy curiosity and cure confusion.

Customer Perceived Value: Smartphone (iPhone)

 The conditional preference for the iPhone was based on convenience-related measures.

 Much of the iPhone’s value was conditional depending upon the availability of a laptop computer with an internet connection. When time was limited, a computer’s long boot up time added conditional value to the iPhone, which was ready for use.

When a Wi-Fi or landline internet connection was unavailable, the conditional value of the smart phone rose dramatically because it was the only alternative. None saw much value in typing email on the iPhone unless a computer was unavailable, the message could be conveyed in a few words, and it must be sent immediatel