Literature Review On Customer Perceived Value Marketing Essay

Published Date: 23 Mar 2015

Nowadays delivery of superior value to customers is an enduring concern of management in many business markets, and among business practitioner and academia the core considering concept is "value. Knowing where value resides from the standpoint of the customer has become critical for providers. In this literature review discusses how the customer value review, and can be linked to marketing strategy development and provides guidelines for executive dealings.

Introduction

Ravald and Grönroos are stated that, "Delivering superior value to customers is an ongoing concern of management in many business markets today, and the value concept is considered one of the most popular constructs among business managers and academia". The concept of value has been widely used in a range of disciplines, such as economics, accounting, finance, strategy, production management, and marketing (Wilson, David T., and Jantrania, Swanti, 1997). In marketing, researchers seem to use different terminologies when referring to the construct, such as customer focus, customer satisfaction, customer delight, customer loyalty, or customer value (B. Gale, 1997)

Background

In recent years, there has been a resurgence of interest in the value construct. In 1997, the Marketing Science Institute identified "value-related" concerns as a research priority. In 1998, conferences such as the Annual Conference of the Academy of Marketing Science in Norfolk, Virginia, and the Annual Conference of the Industrial Marketing and Purchasing group (IMP) in Turku, Finland have given broader attention to the issue (R. Oliver, 1996).

Several essential elements of value have been conceptualized; however, most of the models incorporate the same line of thinking. One of the traditional definition of customer perceived value is following:

"Perceived value is the consumer's overall assessment of the utility of product based on perceptions on what is received and what is given" (Zeithaml, 1988).

Zeithaml (1988) summarized the customer perceived value with four viewpoints:

Value is low price

Value is whatever I want in a product

Value is the quality I get for the price I pay

Value is what I get for what I give

Gronroos (2000) described the customer perceived value with three different equations; first equation make a distinction between value in episode and relationships; and other two equations included a separation into core and additional services: (Journal of Business & Industrial Marketing, 2004)

CPV = _Core solution + additional services__ (1) Price + relationship costs

CPV = Core value + added value (2)

CPV = Episode value + relationship value (3)

Findings/Discussion

For the purpose of this assignment, there is a need to describe what we understand by "customer-perceived value". The concept often is used in relation with two other constructs: "customer-perceived quality" and "customer satisfaction."

Customer-Perceived Quality

In traditional approaches the concepts about customer-perceived quality have a limited and restrictive view, reducing it to internal product quality delivered by a supplier. Grounded on this "conformance quality," quality control concepts were introduced in the 1950s and 1960s, followed by quality assurance programs in the 1960s and 1970s. During the 1980s, the quality revolution made total quality management (TQM) a buzzword (Morgan and Piercy, 1992).

What exactly is quality? There have been several attempts to address the issue, resulting in different viewpoint (Morgan and Piercy, 1992). P. Crosby stated that, "Most operational definitions stem from quality experts and consultants, i.e., Crosby's "conformance to requirements" (P. Crosby, 1979), Deming's "predictable degree of conformity and dependability at low cost and suited to market" (W.E. Deming, 1982), Juran's "fitness for purpose" (J. Juran, 1974), and Oakland's "meeting the customer requirements" (J.S. Oakland, 1989).

Customer Satisfaction

Among the marketing research firm the Measuring of customer satisfaction with quality of product has become very popular; and nowadays measuring customer satisfaction represents an important source of revenue.

Traditionally the customer satisfaction models described, quality is supposed to precede customer satisfaction (Ravald and Grönroos, 1996).

Customer satisfaction research is influenced mainly by the disconfirmation paradigm/model (Parasuraman and Zeithaml, 1988) Customer satisfaction dimension thus provides strategic tools used by customer service departments. Assessing customer-perceived value, however, goes beyond simply tracking customer satisfaction with product quality.

Researchers have assessed extensively the construct of value in marketing. Flint, Woodruff, and Gardial (1997) state that "value can be approached in three different directions: values, desired values, and Value judgments".

Conclusion

This literature review has shown that understanding how customers perceived value can help marketer develop long-term relationships, and also has shown that value must be measured as a multi attribute construct. Perceptual gaps do exist between the marketer's and the customer's view of value delivery. Customer value analysis is of increasing importance in industrial marketing.