An overview of the consumer value literature perceived value, desired value

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1 An overview of the consumer value literature perceived value, desired value Doriana Dumitrela MORAR Babeş-Bolyai University, Faculty of Economics and Business Administration, România ABSTRACT The main idea of the present article is to shed light on the concept of value and its importance stated in the literature. The consumer perceived value construct is a very important component in the consumer value literature and it has been identified as one of the most important measures for gaining a competitive edge, being perceived as the basis for all marketing activities. The research methodology resumes to observing, summarizing, comparing and highlighting the most relevant information on consumer perceived value available in the studied literature. The present article sustains the idea that consumer s perceived value can been associated with customer satisfaction, which leads to customer loyalty and retention, positive word-of-mouth, stronger competitive position, and higher market share. Regarding the methodology used in the development of the study, I appealed to the documentary research by consulting different speciality articles, in order to find out relevant aspects for the analized issues. The informational basis of the paper resides in the results of different findings captured both from online and phisic sources, articles published both in Romanian and foreign literature. The article is conceptual and suggests a new theoretical frame of reference describing value.based on the literature, findings indicate different opinions regarding the circumstances within consumers perceive value or even think about it. Definitions given by the authors differ throughout the concepts analyzed : utility, benefits, quality and satisfaction; fact that rises difficulty in comparing their opinions. The authors could not find a common path over the components of perceived value and, of course, over a consistent and clear definition of it. Keywords: customer perceived value, desired value, value in use, customer satisfaction JEL Classification: M31 1. Introduction The concept of "value" is a key-element in marketing. Marketing managers are encouraged to adopt strategies related to the value expected by the consumer, to promote and enhance the long-term success (Gale, 1994; Hamel and Prahalad, 1994; Woodruff, 1997; Flint et al., 2002). The literature contains a large variety of models to conceptualize the customer value (Graf and Maas, 2008), which is considered to be the key outcome in the general model of consumption experiences (Babin, Darden and Griffin, 1994; Holbrook, 1986); also, perceived value of the consumer has been argued to be the most important indicator of repurchase Intentions (Parasuraman and Grewal, 2000), being said that with the recognition of the importance of consumer perceived value comes the recognition that retailers must deliver the value which will increase the shopping intention of consumers by creating and delivering good shopping experiences. 169

2 As Peterson (1995) stated, the consumer can either appreciate the economic benefits of a purchase process, or can get a better service adapted to his/her own needs (Gwinner et al., 1998; Rust et al, 2000). Other benefits enjoyed by consumers during their purchase process are the social ones, arising from the establishment of a specific relationship. Because of this, maintaining a consumer may be ten times cheaper than acquiring a new customer (Heskett et al.,1990), so companies need to make efforts for retaining customers. Therefore, organizations must focus their work on managing perceived value by consumers. In order to better understand the approached subject, the author decided to select the most relevant definitions from the field and to build in the present paper a framework that will allow readers to deepen the knowledge in this regard. Thus, will be approached elements in connection to how customers evaluate their perceived value, how can it be measured in order to be used as a management tool etc. Several studies conducted by marketing specialists have proved the fact that value is given when a product/service has the ability to satisfact the consumer needs and wishes. This reality determined me to start a deeper research within the problem/aspect above, in a dinamic context of continuous change within the consumer expectations. 2. Customer Value approaches Value can be studied either as single universal concept or by adopting the vantage and contingency perspective of a particular source of value (Lepak, Smith and Taylor, 2007). Value can be seen from various perspectives, including both from the customer and supplier s point of view (Smith and Colgate, 2007; Payne et al., 2008). Despite the above-debated pivotal position of value, the literature demonstrates a lack of convergence because of its available definitions, conceptualization and operationalization (Woodall, 2003). This divergence is -to some extent- explained by the scope and multifariousness of the value concept; indeed, Woodall (2003: 3) observes the the literature on value per se is as broad as it is extensive, and is represented as much in the fields of economics and philosophy as it is in the domain of business. The idea of creating value for customers is related to the fact that there are sensible differences between what customers want and what they get after having bought the product. The value offered to the customer represents, in this way, the difference between total customer value (TCV) and total customer cost (TCC). TCV is the total of the customers expectations on a specific product or service, while TCC is the cost undergone by customers in searching, evaluating, obtaining, using and selling out a product or service (Selvi, 2007: 138) Total customer values, total customer cost, value to be offered to the customer and perceived value are shown in the following table. Table 1. Components of Customer Value Total Customer Cost Financial C. + Time C. + Energy C. + Mental C. Total Customer Value Product V. + Services V. + Staff V. + Image V. Value to be presented to the Customer Total Customer Value Total Customer Cost Customers Perceived Value Benefit/Difficulties (customers underwent) (Source: adapted by the author after the references of the paper) Usually, customers -when they buy products or services- choose those services/products that provide them the highest value. Therefore, they have their own knowledge, movement and income limits and they seek for the highest value in accordance with their own research costs; as a fact, they develop a perceived value and act in strong connection with this. Products, service and value provided by the company for its customers will have an effect on whether 170

3 these are suitable to the customers perception, whether costumers are satisfied (or not) with this product/service and whether they will prefer to buy products and services belonging to this company again (Kotler, 2000: 34). If they consider that a specific product/service is suitable to their needs, they appreciate its cost as being in concordance with the perceived value they will buy over again from that company considering that the company gains their trust and fidelity. 2.1.Theoretical Framework Definitions of the Perceived Value Perceived value represents an abstract concept with varying meanings depending of the context. Generally, this is defined from the point of view of consumers. Zeithaml (1988: 14) has suggested that perceived value can be regarded as the overall assessment of a consumer regarding the utility of a product (or service), which is thought to be based on perceptions of what is received and what is given". Although what is received and/or given varies across consumers, value "represents a tradeoff of the salient give and get components" (Zeithaml, 1988: 14). Several researchers consider value as being a monetary sacrifice incurred during the service and product consumption process (Cronin et al., 2000; Einhorm and Hogarth, 1981; Kahneman and Tversky, 1979). In contrast to this (Bolton and Drew, 1991), others authors believe that seeing perceived value as a compromise between quality and price is very simplistic; more than that, Monroe (1990) views value as the trade-off between the quality or benefits consumers perceive in the purchased product/service, relative to the sacrifice they perceive by paying the price for the product. As price represents one of the most important components that drive value perceptions (Varki and Colgate, 2001), several studies show that it plays a critical role in influencing customer satisfaction levels (Bolton and Lemon, 1999; Shankar, Rangaswamy and Pusateri, 2001; Voss, Parasuraman and Grewal, 1998). Bolton and Lemon (1999) indicate that price is a salient factor that can influence customers evaluation of services, while Voss et al. (1998) find that price affects satisfaction in a hotel check-in scenario. According to the definition of Zeithaml (1988: 14), perceived value is based on customer's experience and is seen as a compromise between benefits and sacrifices (Flint et al., 2002, Grönroos, 2000) or between quality and sacrifices (Monroe, 1990; Ravald and Grönroos, 1996), which can be divided into financial and psychological sacrifices. Sacrifices originally included monetary sacrifices, such as those related to price and purchase costs, but these have been extended to non-monetary price and the risk of poor performance (Liljander and Strandvik, 1993; Monroe, 1990). However, different definitions of perceived value seem to offer a variety of meanings (Woodruff, 1997: 141.). These definitions are developed based on changes surveyed in the consumer's behavior. Cravens and Piercy (2003: 14.) sustain that perceived value consists of benefits and costs resulting from the purchase and use of products ". Another definition of perceived value is given by (Iglesias and Guillen, 2004: 374) and suggests that this is "an exchange between what is received and what is given". Keller (1998: 178) believes that "consumers combine perception of quality with perception of cost in order to reach to an assessment of perceived value. Consumer perception combine quality with cost perception to arrive at year assessment of the perceived value ". Despite different expressions, the common point in these definitions is that consumer perceived value is a trade-off between benefits and sacrifices perceived by the consumer when considering a supplier s offering (Ulaga and Chacour, 2001; Woodruff, 1997). Following Zeithaml s (1988) seminal conceptualization of perceived value, researchers have defined consumer perceived value (CPV) in a variety of ways. The author collected different definitions given by several authors in order to facilitate the forming of a framework regarding this concept. These are summarized in the Table 2, entitled Definitions of consumer perceived value. 171

4 Table 2. Definition of Consumer Perceived Value Definition of consumer perceived value Perceived value is composed of all factors; qualitative and quantitative, objective and subjective, that jointly form a consumer s buying experience. Perceived value is the consumer overall assessment of the utility of a product based on the perceptions of what is received and what is given The mental estimate that consumers make of the travel product, where perceptions of value are drawn from a personal cost/benefit assessment A tradeoff between the quality or benefits they perceive in the product relative to the sacrifice they perceive by paying the price Perceived customer value = customer s perceived benefits customer s perceived cost. That is, perceived customer value is the surplus (or the difference) between perceived benefits and perceived costs. Consumer choice is a function of multiple consumption values. These are functional, social, emotional, epistemic and conditional value. The consumption values make differential contributions in any given choice situation. The consumption values are independent Author(s) Schechter, 1984 in Zeithaml, 1988 (cited in Snoj et al., 2004: 158) Zeithaml, 1988: 14 Morrison,1989 quoted in Murphy et al., 2000: 46 Monroe, 1990:46 Day, 1999; Lai, 1995 Seth et al., 1991: 160 A cognitive trade-off between perceived quality and sacrifice Dodds et al.,1991: 316 The notion of value for money refers primarily to the relationship Stevens, 1992: 44 between price, quality and quantity Product value to a consumer is a comparison of tangible and intangible benefits from the generic as well as the supplementary Nilson, 1992 (cited in Snoj levels of a product and the total costs of production and usage of a et al., 2004: 158) product Perceived level of product quality relative to the price paid Fornell et al., 1996: 9 A customer perceived preferences for and evaluation of those product attributes, attribute performances and consequences arising from use that facilitate (or block) achieving the customer s goal and purposes in use situations Value is a positive function of what is received and a negative function of what is sacrificed Product value for a consumer is created when the benefits a consumer gets with a product are greater than the long-term costs a consumer is expected to have with a product. Value equals a perceived quality relative to the price Value can be seen as a combination of a product s (destination s) perceived quality and associated price which a visitor will summarize as the value received The trade-off between the multiple benefits and sacrifices of a supplier s offering, as perceived by key decision makers in the customer s organization, and taking into consideration the available alternative suppliers offerings in a specific-use situation (in industrial markets). The consumer s assessment of the value that has been created for them by a supplier given the trade-off between all relevant benefits and sacrifices in a specific use situation Woodruff, 1997: 142 Oliver, 1999: 45 (Source: adapted by the author after the references of the paper) Slater and Narver, 2000 (cited in Snoj et al., 2004: 158) Hallowell in Cornin et al., 2000 (cited in Snoj et al., 2004: 158) Chang and Wildt, 1994 quoted in Murphy et al Ulaga and Chacour, 2001 Flint et al., 2002: 171 (cited in Snoj et al., 2004: 158) Typical definitions of consumer perceived value rely heavily on terms such as utility, worth, benefits, and quality, according to what Woodruff (1997) sustains. The comparison between 172

5 different concepts and definitions is quite difficult, taking into account the fact that the terms are not well defined. Also, consumer perceived value can be felt differently with each consumption circumstance, according to the moment of purchase - such as: pre-purchase, post-purchase, and in use situations (Woodruff, 1997). At the same time, consumer perceived value can be predicted during the decision making process or actually experienced during the use process (Woodruff, 1997). Based on these arguments, Woodruff (1997:142) defined customer value as a customer s perceived preference for and evaluation of those product attributes, attribute performances, and consequences arising from use that facilitates (or blocks) achieving the customer s goals and purposes in use situations. Woodruff (1997) argues that his definition broadens the consumer perceived value concept by incorporating both desired and received value and emphasizing that value stems from consumers learned perceptions, preferences, and evaluations. It also links together products with use situations and related consequences experienced by goal-oriented customers (Woodruff, 1997:142). The trade-off definition of perceived value has its roots in economic theory and has strongly influenced researchers thinking. However, a rational product -and purchase oriented perspective on consumer perceived value- fails to recognize the irrational and sensory elements of experiential consumption. Although Woodruff (1997) defined a broader concept of consumer perceived value, which provides conceptual richness (Parasuraman, 1997), he still emphasizes rational and goal-oriented consumer behavior that leads to purchase process. With a broadened view of the consumer behavior, a definition of consumer perceived value that includes experiential consumption is sorely needed. More recently, however, service marketing literature has begun to view customer perceived value not just as something that is produced for customers, but rather as something that relates to 3 customer experience and value-in-use (Heinonen, 2009; Sandström et al., 2008) Dimensions of Consumer Perceived Value In the literature there are two main approaches regarding the conceptualization of perceived value. The first approach emphasizes perceived value as being divided into two parts: one is made of benefits (economic, social and relational), and the other one is composed by the sacrifices made (price, time, effort, risks and opportunities) by the consumers (Grewal et al., 1998; Cronin et al, 2000). As defined by Zeithaml (1988), perceived value results from the personal comparison of the benefits obtained and personal sacrifices made after the purchase act has been done. Therefore, this concept is a very subjective and personal one (Parasuraman et al., 1985). Perception contains components related to consumer benefits and sacrifices. On one hand, the benefit component -what a consumer receives when he/she acquires a product- includes perceived service quality and psychological benefits (Zeithaml, 1988). Sacrifices, on the other hand, are both monetary and non-monetary. The latter ones are related to time, energy, effort and inconvenience. Thus, in order to determine the consumer to purchase particular services or to buy again specific products, these have to be delivered with value, either by incorporating benefits or by reducing sacrifices. Sanchez-Fernandez and Iniesta-Bonillo (2007: 428) note that the concept of customer perceived value has become one of the most overused and misused concepts in the social sciences in general and in the management literature in particular. In their recent systematic review of the customer-perceived value literature, Sanchez-Fernandez and Iniesta-Bonillo (2007) identified two research trajectories. The first research stream, which is characteristic of earlier studies and widely embraced in the marketing literature, conceptualizes consumer value as a uni-dimensional construct (e.g. Monroe, 1979; Zeithaml, 1988; Bolton and Drew, 1991). One-dimensional approach has negative aspects too: it is perceived as being too "narrow", "arcane" or "simplistic" to what customers might experience. The second approach is based on a multidimensional approach in order to build perceived value (Woodruff, 1997; Sweeney and Soutar, 2001; Sánchez et el, 2006). This concept includes functional dimension and affective dimension, examining consumer's purchasing behavior. Functional value is determined by the rational one, too, but 173

6 also by consumers' economic evaluations and quality of services that form this dimension. Affective dimension is divided into an emotional and a social dimension. Sheth (1991) identified five dimensions of the concept of value: social, emotional, functional, epistemic and conditional. 1. Functional value is defined as the perceived usefulness of the service. 2. Emotional value consists in feelings or affective states generated by consumption experience. 3. The social value is given by the acceptability at the individual level and the relations with social environment. 4. Epistemic value is given the ability of service to arouse curiosity and to satisfy the desire for knowledge. An alternative brand may be chosen to alleviate boredom with an existing brand, to satisfy a desire to learn or experience something new, or in response to an arousal of interest. Due to this cognitive-affective multi-dimensional nature of customer perceived value, it is important to evaluate customer perceived value from the perspective of the individual s consumption experience. Value is created by the customer based on the value-in-use. While the firm can create and communicate value propositions, it is the customer, not the firm that creates value through dynamic situational specific value creating processes (Holbrook, 2006; Gronroos, 2008). 5. The conditional value relates to situational factors such as the disease or specific social situations (Sheth et al., 1991). In a later study of Sweeney and Soutar (2001) were not taken into account the size of epistemic and conditional dimensions. These authors have reduced the original five dimensions to three: functional value, social value and emotional value and have elaborated a scale designed to measure the value; the scale is known as PERVAL scale. Based on the theoretical framework of Sheth et al. (1991), Sweeney and Soutar (2002) developed PERVAL scale, which has 19-items and which can be used to assess consumers perceptions of the value of a consumer durable good at the brand level. The measurement was developed for use in a retail purchase situation to determine what consumption values drive purchase attitude and behavior within that environment. The scale consisted of 19 items that identified four dimensions of CPV. Of these 19 items, five items assessed the dimension of emotional value, four assessed social value, six assessed quality/performance value, and four assessed price/value. The scale was found to be valid and reliable in both pre-purchase and post-purchase situations (Sweeney and Soutar, 2002). Based on the work of Zeithaml (1988), the authors divided the functional value into of quality and price. These two different components affect the perceived value of different consumers. Therefore perceived value scale includes four dimensions: quality of performance, price - value for money, emotional value and social value. This scale was tested based on the perceptions of the consumers of durable goods in a retail purchase. The situation has determined what values of consume drive attitudes and purchasing behavior. In different situations of choice researchers can investigate specific consumer decision regarding the usefulness perceived at a level of choice (to buy or not buy), product level (product A or product B) or brand level (mark A or B). Several authors (Sánchez et al., 2006) have developed a scale for measuring post-purchase perceived value, called GLOVAL - in tourism field. This scale consists of six dimensions of perceived value. Four of them correspond to dimensions of the functional value: functional value of the establishment, functional value of the contact personnel, functional value of the service quality and functional value price. The two remaining dimensions refer to the affective dimension of the perceived value: the emotional and social value (Four of them 174

7 correspond to functional value: The value of stability, functional value of contact personnel, the functional quality of service and price as functional value. The two remaining dimensions refer to the affective dimension of perceived value: emotional and social value). Petrick (2002), using the theoretical framework of Zeithaml (1988), developed 25 - items to measure the multi-dimensional scale for consumer Perceived value services. According to Petrick (2002) the benefits received by consumers when purchasing a product includes quality, emotional response, reputation obtained by acquiring the service and the monetary price. The PERVAL SERV scale has been developed Petrick (2002). He investigated recreational services among American consumers and it has been applied in other studies too (Petrick, 2004). The scale was supposed to measure perceived value after completing a purchase and identified five dimensions of customer perceived value. Of the 25 scale items, four assessed the dimension of quality value, six assessed perceived monetary price value, and five each assessed emotional response value, behavior price value, and reputation value. One cruise passenger sample was used to examine the scale s external validity and one undergraduate student sample was used to examine the dimensionality and internal reliability of the scale items. The instrument appeared to be reliable and have convergent and discriminant validity. As a personal remark, the author of the present paper can affirm that the scale development is a recent and underdeveloped research direction for the study of consumer perceived value. Existing measurement scales have not been widely tested for validity and reliability nor have they been widely utilized by empirical studies. Therefore, have not been identified in the studied literature a wide-accepted range of measures for evaluating the overall perceived value or for individual dimensions. Additionally, the developed scale focuses on the managerial perspective and purchase paradigm of consumer behavior, instead of the overall consumption experience as perceived by consumers. Other values related to the consumption experience and personal values relating to consumption are not identified by the existing scales. As an important thing it should be noted that a measurement scale for consumer perceived value that incorporates the broader consumption experience (an overall assessment of consumer perceived value) has not yet been developed. While scales have been developed to some extent for the various dimensions of consumer perceived value, no researcher has yet looked across the existing studies on the dimensions to provide a framework organizing and explaining any appropriate application of the dimensions of consumer perceived value. The literature shows that -generally- authors use the concept of value as a multidimensional one, but they also agree that two different dimensions can be distinguished: one of them has a functional character, while the other one has an emotional or affective nature. The factors from the functional dimension include the monetary value, versatility (Sweeney et al., 1999), quality of services (Sánchez et al., 2006), non-monetary sacrifices (Sweeney et al., 1999; Petrick, 2002) and price (Sweeney and Soutar, 2001; Petrick, 2002). Meanwhile, the affective dimension includes feelings or emotions generated by services (Table 3 Dimensions of perceived value). 175

8 Dimensions Table 3. Dimensions of the Perceived Value Author(s) Hedonic value, utilitarian value Holbrook and Corfman, 1985 Acquisition value, transaction value Monroe and Chapman, 1987 Functional, emotional, conditional, social, epistemic Sheth et al., 1991 Tangibles values, intangibles values Nilson, 1992 Hedonic value, utilitarian value Babin et al., 1994 Expected value, received value Kotler et al., 1995 Pre-use value, post-use value Lovelock, 1996 Benefits (quality, satisfaction and specific benefits), costs (money, time and effort) Emotional or intrinsic value, functional or extrinsic value, logical or value for money Zeithaml and Bitner, 1996 Woodruff, 1997 Functional, emotional Gronroos, 1997 Quality, price, acquisition, transaction Grewal et al., 1998 Efficiency, excellence, play, aesthetics, Status,esteem, ethics, spirituality Holbrook, 1999 Consumption value, extended value Oliver, 1999 Adquisition value, transaction value, value in-use, redemption value Parasuraman and Grewal, 2000 Functional- quality, functional-price, emotional, special PERVAL Sweeney and Soutar, 2001 Quality, monetary price, behabioral price, emotional, reputation SERV-RERVAL Active values (efficiency; economic value and enjoyment); Reactive values (visual attraction; entertainment value and service excellence) Petrick, 2002 Mathwick et al., 2002 Functional, emotional, social GLOVAL Sanchez et al, 2006 (Source: adapted by the author after the references of the paper) More than that, several studies concluded that the quality of services positively affects perceived value (Cronin et al, 2000; Petrick, 2002; Sanchez, 2006). Also, the relationship between perceived value and customer satisfaction or future intentions are discussed in the literature of marketing services. Anderson et al. (1994) states that satisfaction depends of perceived value and the intentions that a customer has in the future are largely determined by perceived value. However Sanchez et al. (2006), Sweeney and Soutar (2001) argue that perceived value is a positive predictor of consumer satisfaction. Sanchez-Fernandez and Iniesta-Bonillo (2007: 441) call for further academic research "to clarify the nature of the multi-dimensional construct (customer perceived value) and its constituent dimensions and to develop a comprehensive and efficacious measurement scale for the concept" (Sanchez-Fernandez and Iniesta-Bonillo, 2007: 444). As resulting from the literature, the main majority of the researchers consider consumer perceived value as being a multidimensional structure. They investigated both similar and dissimilar dimensions with a focus on consumer products and services (Oliver, 1996, from Ulaga and Chacour, 2001), as can be seen in Table

9 Table 4. Types of dimensions of consumer perceived value Dimensions Author (s) Type of work Four dimensions: 1. Intrinsic attributes 2. Extrinsic attributes 3. Quality 4. Other high level abstractions 5. Price (monetary and nonmonetary) Five dimensions: 1. Functional value 2. Conditional value 3. Social value 4. Emotional value, and 5. Epistemic value Two dimensions 1. Acquisition value (AV) 2. Transaction value (TV) Four dimensions: 1. Societal value 2. Experiential value 3. Functional value, and 4. Market value Four dimensions: 1. Acquisition value 2. Transaction value 3. In-use value, and 4. Redemption value Four dimensions: 1. Emotional 2. Social 3. Quality/performance 4. Price/value Five dimensions: 1. Quality 2. Emotional response 3. Monetary price 4. Behavioral price, and 5. Reputation Zeithaml, 1988 Sheth, Newman and Gross, 1991 Dodds, Monroe and Grewal, 1991 Grewal, Monroe and Kirshnan, 1998 Kantamneni andcoulson, 1996 Parasuraman and Grewal, 2000 Sweeney and Soutar, 2001 Petrick (2002) (Source: Adapted by the author after the references of the paper) Theoretical work Theoretical work Empirical work N/A Theoretical work Empirical work Empirical work Value typology was developed extensively by Holbrook (1986), the last one being divided into conceptual classification. In this framework, consumer value in the consumption experience is classified into: 1) extrinsic vs. intrinsic, 2) self- vs. other-oriented and 3) active vs. passive. Table 5. A Typology of Consumer Value Self-oriented Extrinsec Intrinsec Active Efficiency (Convenience) Play (Fun) Passive Excellence (Quality) Esthetics (Beauty) Politics (Success, Impression Morality (Virtue, Justice, Active Management ) Morality ) Other-oriented Esteem (Reputation, Materialism, Religion (Faith, Ecstasy, Passive Possessions) Sacredness) (Source: Holbrook, M.B. (1996). Customer value a framework for analysis and research. Advances in Consumer Research, 23: ) 177

10 Extrinsic value, known as utilitarian value, occurs when consumption is appreciated for its function and utility. Intrinsic value is also called hedonic value which occurs when the consumption experience is appreciated as an end in itself, that is, for its own sake (Holbrook, 1986). Value is considered to be an active element when it involves things done/experienced by an individual, when it entails some physical or mental manipulation of a tangible or intangible object; also, it is perceived as being a reactive element when it results from the responds to (the use of) objects - for example, appreciating and comprehending from things that have been done to/by an individual (Holbrook, 1986). Value is self-oriented when a consumer appreciates a product or experience for his/her own sake, for how he/she reacts to it or for the effect it has on him or her. Conversely, other-oriented value looks beyond self to others such as family, friends, countries and universe. Other researchers have identified and selected dimensions of consumer perceived value by interviewing consumers. Sheth et al. (1991) developed a broader theoretical framework of consumer perceived value.they regarded consumer choice as a function of multiple consumption value dimensions, and these dimensions make varying contributions in different choice situations. Also suggested 5 dimensions relating specifically to the perceived utility of a choice, functional value, social value, emotional value, epistemic value, and conditional value. Functional value is the perceived utility acquired from an alternative s capacity for functional, utilitarian, or physical performance; social value is the perceived utility acquired from an alternative s association with one or more specific social groups; emotional value is the perceived utility acquired from an alternative s capacity to arouse feelings or affective states; epistemic value is the perceived utility acquired from an alternative s capacity to arouse curiosity, provide novelty, and/or satisfy a desire for knowledge; and conditional value is the perceived utility acquired by an alternative as the result of the specific situation or set of circumstances facing the choice maker (Sheth et al., 1991). Product Benefit Functional Table 5. A Typology of Product Benefits Definition A product s capacity for functional, utilitarian, or physical performance. Perceptual benefits acquired from a product s association with social class, social Social status, or a specific social group. Perceptual benefit acquired from a product s capacity to arouse feelings or Affective affective states. They are often associated with cultural ethnic meanings, or personal, idiosyncratic meanings, tests and memories. Benefits acquired from a product s capacity to satisfy curiosity, provide novelty, Epistemic and/or meet a desire for knowledge. The pursuing of these benefits can be seen in exploratory, novelty-seeking, and variety-seeking consumption behaviors. Benefits acquired from a product s capacity to present a sense of beauty or to Aesthetic enhance personal expression. Benefits acquired from a product s capacity to meet a need of enjoyment, fun, Hedonic pleasure, or distraction from work or anxiety. Benefits acquired from a product s capacity to meet situational needs in specific Situational circumstances. Perceptual benefit acquired from the complementarity, coherence, compatibility, Holistic and consistency in a product constellation as a whole. (Source: Lai, W.A. (1995). Consumer value, product benefits and customer value: a consumption behavior approach. Advances in Consumer Research, 22: ) Sheth et al. (1991) claim that the theory is applicable to choices involving a full range of product types, including consumer nondurables, consumer durables, industrial goods, and services. However, Lai (1995: 383) argues that the consumption values identified by Sheth et al. (1991) are in fact generic product benefits that a consumer may derive from possession or consumption, that is, Sheth et al. (1991) conflate product benefits with consumption value. Lai (1995) proposes a typology of generic product benefits composed of functional benefits, 178

11 social benefits, affective benefits, epistemic benefits, aesthetic benefits, hedonic benefits, situational benefits, and holistic benefits. Dodds, Monroe and Grewal (1991), but also Grewal, Monroe, and Krishnan (1998) presented two additional dimensions of consumer perceived value, acquisition and transaction value. Perceived acquisition value is defined as the perceived net gains accrued when products or services are acquired. In other words, a product s perceived acquisition value is positively influenced by the benefits consumers believe they gain by acquiring and using the product and negatively affected by the costs associated with the product (Grewal et al., 1998). Perceived transaction value is defined as the perception of psychological satisfaction or pleasure gained from getting a deal (Grewal et al., 1998). According to Petrick (2002), Kantamneni and Coulson (1996), they have identified four dimensions of a product s perceived value: societal value, experiential value, functional value and market value. societal value is the product s benefit/value to society; experiential value is value related to senses (the feel, smells, and looks of a product); functional value is related to whether or not the product is reliable and safe; market value is the product s value in regards to price (Petrick, 2002). Parasuraman and Grewal (2000) conceptualized consumer perceived value as a dynamic construct consisting of four value types, acquisition value, transaction value, in-use value and redemption value. By definition, acquisition value is the benefits received for the monetary price given; transaction value is the pleasure the consumer receives for getting a good deal; in-use value is the utility derived from utilization of the product/service; and redemption value is the residual benefit received at the time of trade-in or at the end of the product life or termination of services (Parasuraman and Grewal, 2000). The relevance of each of the four dimensions varies along the product/service life. Acquisition and transaction value are most salient during purchase, while in-use value and redemption value are dominant after the purchase (Parasuraman and Grewal, 2000). Sweeney and Soutar(2001), based on the theoretical work of Sheth et al. (1991) established four dimensions for durable goods, such as quality/performance, emotional value, price, and social value. Sweeney and Soutar (2001) argue that price and quality are sub-dimensions of the functional value proposed by Sheth et al. (1991), and these dimensions contribute separately to perceived value. Epistemic value was dropped by Sweeney and Soutar (2001) through the exploratory study, because none of the items generated were judged to reflect this dimension. However, epistemic value might be particularly important for experiential services such as holidays, adventures, or even shopping trips (Sheth et al., 1991). Conditional value was also dropped, because it can be described as a specific case of other types of value (Sweeney and Soutar, 2001). Following the theoretical model developed by Zeithaml (1988), Petrick (2002: 123) proposed that the value dimensions received from the purchase of a service include the emotional response to the service, the quality received from the service, and the reputation of the service rendered, while the dimensions related to what is given include monetary and non-monetary (behavioral) price. So, CPV has five dimensions, quality, emotional response, monetary price, behavioral price, and reputation. A review of the study of CPV reveals that existing studies have been overwhelmingly influenced by the conceptual frameworks developed by Zeithaml (1988), Sheth et al. (1991) and Grewal et al. (1998). Zeithaml (1988) established the economic exchange concept of CPV; Sheth et al. (1991) broadened the dimensions of CPV to include perspectives other than economic exchange theory; and Grewal et al. (1998) presented two dimensions of CPV from the process view. It should be noted that the study of CPV has been based largely on studies that considered a limited number of products or product concepts, primarily physical goods 179

12 with higher price points and with specific brand names. Furthermore, despite the consumer label, much of CPV has focused on products and purchase from a managerial perspective. No research exists that explores the dimensions of CPV from the perspective of the consumer and the consumption experience Desired Customer Value There is mentioned in the literature that customers differentiate between perceived value (PCV) and desired value (DCV) (Flint et al., 2002; Bagozzi, 1999; Holbrook, 1994; Richins, 1994). Perceived customer value focuses on the assessment of specific benefits and sacrifices, while the desired customer value focuses on the customer s needs and desires and, thus, involves a higher level of abstraction on the customer s part. Desired customer value is independent of use-specific experience and more enduring than perceived customer value (Flint et al., 1997). Desired customer value research seeks to explain what needs, desires, and values (dimensions) customers seek to fulfil by buying and/or using a certain product or service. Also, in this regard, the desired customer value (DCV) is conceptualized as a part of the customers' value system. The focus of desired customer value desired customer value is on abstract value dimensions, or consequences, derived from specific performance characteristics (see Holbrook, 1994; Woodruff, 1997). In contrast to desired customer value approaches, which explore generic value dimensions and focus on individuals, Ulaga (2003) focuses on value dimensions in a Business-to- Business (B2B) context. Based on a qualitative approach, he identified eight dimensions of value creation in manufacturer-provider relationships: product quality, service support, delivery, know-how provider, time to market, personal interaction, direct product costs, and process costs. The goal of this strand of research is to develop a practice-oriented customer concept having a special emphasis on relational aspects. 3. Conclusions and limitations Analyzing and researching customer value seen different from author to author streams, finally has been showed that customer value is a unique, independent area of research that can make a valuable contribution to better understanding customer needs, decisions, and behavior, as well as aiding in better or more accurate management decisions. Consumption value is a judgment of receipts compared to sacrifices. This form of value takes on greater meaning when the receipts numerator is expanded to include the many types of valued consumption outcomes, including excellence, as presented in the Holbrook typology. Value, then, becomes an input to the satisfaction response which is impacted by quality directly and indirectly through value. Consumers may derive subsequent personal/value from satisfaction, although more conclusive evidence on this latter point awaits investigation The value plays a major and increasing role not only in consumers life, and in businesses and marketers too (Dodds, 1991). From the consumer s point of view, obtaining value is a fundamental shopping goal and pivotal to all successful exchange transactions (Holbrook, 1994). From the business perspective, Woodruff (1997) suggests that creating consumer value will increasingly become the critical source of competitive advantage for companies, replacing the quality management paradigm. Even more broadly, value has been called the basis for all marketing activity (Holbrook, 1994). Consumer perceived value is a trade-off between benefits and sacrifices perceived by the consumer when considering a supplier s offering (Ulage and Chacour, 2001; Woodruff, 1997). One of the main ideas stated in all marketing books is our customer, our master, and it should be taken into account when delivering the value expected by the consumer. In order to deliver the desired perceived value to the consumers you serve, you have to identify and respond to the needs of your clients and to accomplish their desires. That is how you gain a 180

13 satisfied customer, who will recommend you to his friends and acquaintances. Such an examination is important as customer perceived value and the meanings of particular products and service experiences are no longer fixed and linked to product and service attributes and characteristics (Levy, 2006) rather they are free-floating as each individual customer derives her or his personally perceived meanings based on his or her experiences (Brown, 2006; Firat and Dholakia 2006; Simmons, 2008). Customer value is an important concept in marketing and is an effective medium to understand customers (Durgee et al., 1996). An overview of the literature reveals that most research on perceived value has focused on definitions and operationalization of the concept (Woodruff and Flint, 2006). There are two approaches to the definition and operationalization of value. First, value is conceptualized as a uni-dimensional construct that can be measured by a self-reported item (or set of items) that evaluates the consumer s perception of value (e.g. Sweeney et al., 1999) and the second is multi-dimensional construct. To gain a better understanding of the consumer construct and its relationships with other constructs, a comprehensive conceptualization that includes various multifaceted perspectives is required. In addition to different levels of abstraction (perceived consumer value, desired consumer value, and personal values), it is necessary to more strongly emphasize individual customer experience and learning effects. The knowledge that arises from this research is expected to have both managerial and academic relevance. In understanding the types of value that dominate different stages and contexts, organizations could fine tune their offerings to increase value whilst removing unnecessary costs. Most authors have viewed value as the outcome of a trade-off between a single "overall quality" construct and sacrifice. However, these results suggest that the customer's value function is more complex. Like any research, the present study bears some limits such as an extensive bibliography which leads to the impossibility of studying in detail all the concepts. Another limitation regarding the study is the absence of a calitative research concerning the problem in discussion. It would be very helpful to combine theorethical approach regarding the perceived value of consumers with a practical researh that would confirm or infirm academic suppositions. Further research is needed to explore the antecedents of customer satisfaction, service quality and service value. In conclusion, perceived value is subjective, it differs from consumer to consumer. It is a holistic concept composed by different dimensions that influence each other. Thus is very important to understand the manner in wich a consumer perceives value, its dimensions, in order to be able to overcome his/her expectations. References 1. Albrecht, K. (1992). The Only Thing That matters. Executive Excellence, 9(November): Anderson, E.W., Fornell, C. and Lehmann, D.R. (1994). Customer satisfaction, market share, and profitability: findings from Sweden. Journal of Marketing, 58(July): Babin, B.J. and Attaway, J.S. (2000). Atmospheric affect as a tool for creating value and gaining share of customer. Journal of Business Research, 49(2): Babin, B.J., Darden, W.R. and Griffin, M. (1994). Work and/or fun: measuring hedonic and utilitarian shopping value. Journal of Consumer Research, 20(March): Bagozzi, R. P. and Yi, Y. (1988). On the Evaluation of Structural Equation Models. Journal of the Academy of Marketing Science, 16 (Spring): Bolton, R. N. and Lemon, K. N. (1999). A dynamic model of customers' usage of services: Usage as an antecedent and consequence of satisfaction. Journal of Marketing Research, 36(2):

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