PERCEIVED VALUE-ALL YOU NEED TO KNOW

PERCEIVED VALUE-ALL YOU NEED TO KNOW

Perceived value is a customer’s own perception of a product or services merit or desirability to them, especially in comparison to a competitor’s product

Perceived value is measured by the price the public is willing to pay for a good or service

Marketing professionals try to influence consumer’s perceived value of a product by describing the attributes that make it superior to the competition

Importance of perceived value

Customers perceived value is important because marketing professionals can use the idea to predict how a customer may view a product

When the perceived value of an item increases, the business or company can price it higher or sell more units, both of which result in higher profits

Perceived consumer value

It revolves around the customers believe that a product or service has the ability to meet their needs or expectations

This belief can impact demand and pricing for a product

Calculation of perceived value

It is total customer value minus total consumer cost

Ways to increase your perceived value

1) improve design aesthetics

2) raise product price

3) use charm pricing

4) emphasize quality

5) convey authenticity

6) leverage influencers

7) point out that a product is worth more than you’re charging

8) embrace social responsibility

Perceived benefits

The perceived benefits construct is defined as an individual’s belief that specific positive outcomes will result from a specific behavior

Factors affecting customers perceived value

1) communication

2) interactivity

3) mission marketing

4) brand equity

5) service quality

6) perceived cost

7) confident

8) strategic consistency

9) customers satisfaction

10) customer loyalty

11) planning and evaluation

12) organizational infrastructure

Perceived quality

The term perceived quality refers to the quantity that customers recognize via the look, touch and feel of a car

Perceived price

Perceived price can be described as customers subjective judgments of the reasonableness of a price for a product or service in comparison with competitors reference price

Perceived threat

Perceived threats were defined as situations that were difficult or troubling to the individual and were described by respondents in narrative form

The degree of threat was then measured by one item on which subjects indicated the degree of concern the threatening event had caused them

Perceived sacrifice

Perceived sacrifice is defined as what is given up to acquire a product or service

Perceived barriers

The perceived barrier will be defined as a person’s estimation of the level of challenge of social, personal, environmental and economic obstacles to a specified behavior or their desired goal status on that behavior

Probabilities of purchase

1) highest value takes all the market

2) a value that reflects a high probability of purchase is more realistic

3) a probability of purchase on an individual basis implies a market share percentage over the total market

Elements of perceived value

1) the customers perception of your product

2) price he is willing to pay for it

Emotion is the ruler of perceived value

1) people buy with their emotions

2) without emotions, the brain can’t make a decision

3) when a person decides to buy something, it may feel and look like a very logical data-driven behavior

4) truth is that this decision is influenced by subconscious motivations

Value-based pricing

It is a strategy of assigning prices based on the customer’s perceived value of a product

1) a good brand

2) high quality and in-demand products and services

3) amazing track record

4) creative marketing strategies

5) great rapport and customer relations

Advantages of value-based pricing

1) you can easily penetrate the market

2) you can command higher price points

3) it proves real willingness to pay data

4) it helps you develop higher quality products

5) it increases focus on customer services

6) it promotes customer loyalty

7) it increases brand value

8) it balances supply and demand

Disadvantages of value-based pricing

1) difficult to justify the added value for commodities

2) perceived value is not always stable

3) price is harder to set

4) niche market, and market competition

5) requires ample research, time and resources

6) not an exact science

7) makes scalability difficult

8) production costs

Disadvantages of perceived value pricing

1) you can target only a limited number of customers who can afford your product

2) there are limited number of customers in a market who can afford the high prices

3) a limited number of customers means limited expansion of business

Compiled by

Avinash Kulkarni

Chartered Engineer, Govt Regd Valuer, IBBI Regd Valuer

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