Definition
Customer Perceived Value (CPV) refers to the value that customers assign to a product or service based on their personal preferences, expectations, and experiences. It is a subjective evaluation that influences their purchasing decisions and overall satisfaction. Essentially, CPV is the customer’s assessment of the benefits versus the costs of a product or service.
Components of Customer Perceived Value
Functional Value: The practical benefits derived from the product’s features and performance.
Emotional Value: The psychological benefits and feelings associated with the product.
Social Value: The perceived value derived from social acceptance or improvement in social status.
Economic Value: The financial savings or monetary benefits gained from purchasing the product.
Special Considerations
Quality vs. Price Trade-offs
Customers often weigh the quality against the price of a product to ascertain if it provides good value for money.
Brand Influence
Strong brand recognition can significantly enhance CPV, as established brands are often associated with reliability and quality.
Personal Experience
Past experiences with a product or service can heavily influence CPV. Positive experiences typically enhance perceived value, while negative experiences can diminish it.
Examples of Customer Perceived Value
- Apple Products: Many customers perceive high value in Apple products due to their design, functionality, and brand reputation.
- Discount Retailers: Stores like Walmart and Aldi offer value through low prices, appealing to cost-conscious customers.
Historical Context of Customer Perceived Value
The concept of CPV has evolved significantly with the advent of marketing and consumer behavior research. In the early 20th century, businesses primarily focused on production efficiency. However, with the rise of competitive markets and an increasing emphasis on customer-centric strategies, the focus shifted towards understanding and enhancing CPV.
Applicability in Modern Business
Modern businesses utilize CPV to tailor their marketing strategies, develop new products, and improve customer satisfaction. It is crucial for customer relationship management (CRM) and can lead to increased customer loyalty and business profitability.
Comparisons with Related Terms
Customer Satisfaction
While CPV is an assessment made before the purchase focusing on expectation and perceived benefit, customer satisfaction is an evaluation made post-purchase, reflecting how well the product met expectations.
Perceived Quality
Perceived quality is a component of CPV, representing the customer’s assessment of the product’s overall excellence or superiority. It is one of the factors that contribute to the overall perceived value.
Customer Loyalty
Customer loyalty is an outcome that can be driven by consistently high CPV. When customers perceive high value in a company’s offerings, they are more likely to remain loyal.
FAQs
1. How can businesses enhance Customer Perceived Value?
- By improving product quality and functionality.
- Offering superior customer service.
- Creating a strong brand image.
- Implementing loyalty programs and incentives.
- Reducing prices or offering better financial terms.
2. Can Customer Perceived Value change over time?
Yes, CPV can change based on alterations in customer preferences, competitive offerings, innovation, and changes in personal experiences or financial situations.
3. What role does marketing play in influencing Customer Perceived Value?
Marketing plays a critical role in shaping CPV by communicating the benefits, creating brand awareness, fostering customer relationships, and highlighting unique selling propositions (USPs).
4. Is Customer Perceived Value the same in all markets?
No, CPV can vary significantly across different markets and cultural contexts based on local preferences, economic conditions, and consumer behavior patterns.
References
- Kotler, P., & Keller, K. L. (2016). Marketing Management.
- Zeithaml, V. A. (1988). Consumer Perceptions of Price, Quality, and Value: A Means-End Model and Synthesis of Evidence.
- Woodruff, R. B. (1997). Customer Value: The Next Source for Competitive Advantage.
Summary
Customer Perceived Value is a critical concept in understanding consumer behavior. It encompasses the total assessment of the benefits versus the costs of a product or service from the customer’s perspective. By understanding and enhancing CPV, businesses can improve customer satisfaction, foster loyalty, and drive profitability. Keeping abreast of the factors that influence CPV and continually adapting to meet customer expectations is essential for sustained success in a competitive market.
