26100 Lecture Notes - Lecture 5: Iphone 3Gs, Ray Kroc, Psychographic
Lecture 5: Creating value
CUSTOMER VALUE
What do customers value?
1.
Needs
= states of deprivation
e.g. physical clothes and food
or social belonging
2.
Wants
= shaped by culture and personality e.g. they want they
newest iPhone
3.
Demands
= human wants
are backed by buying
power
What is value?
According to the lecture slides, it is the
customer’s subjective
assessment of benefits relative to costs
in determining the
worth of a product
Hence:
customer value of products = customer benefit – cost
costs examples: benefit examples:
Product price - product features
Transaction costs - service quality
Search costs
Emotional costs
Learning costs
Perceived risk
Factors influencing a buyer’s willingness to pay (WTP) for
value
WTP: is the maximum amount an individual is willing to
sacrifice to obtain a good or avoid something undesirable
KEY DRIVERS INCLUDE:
