Essay on Customer Perceived Value Of A Product

Essay on Customer Perceived Value Of A Product

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Customer-perceived value

A popular theory used in branding and marketing is known as customer-perceived value. This theory points out the successes of a product and is largely founded on whether or not customers believe it can satisfy their requirements. This process also emphasizes that when a company develops its brand and markets its products, it’s the customers who ultimately decide how they will understand and react to marketing messages. Companies spend a significant amount of time researching the market to get an overall picture of how consumers think and feel. A product is purchased by a customer if he believes that he will get more value from the product than what he pays and that other products will not have more value. The customer’s perceived value is the difference between the benefits from the product as assumed by the customer and the cost of the offering. The benefits from a product offering is the monetary value of the economic, functional, psychological, and social benefits a customer expects from the product. (Kotler & Keller, 2007) The total cost is the monetary worth a consumer may incur when evaluating, owning, using, and during product disposal. In other words, the total cost acquired during the life cycle of the product from evaluating to product disposal is the supposed cost of the product. Thus, the customer perceived value is the difference between the cost he will incur and the benefits the customer would gain from owning the product. The marketer’s objective is to take full advantage of the customer perceived value by increasing social, functional, psychological, and economic value and in turn decreasing the costs. One main challenge in introducing a value perception with consumers exists when a bran...

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...sense of loyalty in a cost effective manner, and communicate the message to the existing and potential customers more effectively. (Kotler & Keller, 2007) A brand backed by a loyal brand community can compete with other very strong brands and still survive. For example, the open source programs are able to compete with products from large businesses because the open source programs are able to create loyal brand community. Mozilla, an open source browser, has very large loyal brand community. There are approximately 10,000 programmers who contribute to its open source code. Because of its large loyal brand community, Mozilla is able to compete with Microsoft’s Internet Explorer and Google’s Chrome browsers. The loyal brand community members show a very high level of brand loyalty which allows a large loyal brand community to make even a small brand very successful.

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