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Chapter 2
Value and the Consumer Behavior Value Framework
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Learning Outcomes
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Describe the consumer value framework, including
its basic components
Define consumer value and compare and contrast
two key types of value
Apply the concepts of marketing strategy and
marketing tactics to describe the way firms go
about creating value for consumers
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Learning Outcomes
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•
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Explain the way market characteristics like market
segmentation and product differentiation affect
marketing strategy
Analyze consumer markets using elementary
perceptual maps
Justify consumers’ lifetime value as an effective
focus for long-term business success
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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The Consumer Value Framework (CVF)
• Represents consumer behavior theory
illustrating factors that shape consumptionrelated behaviors
– Ultimately determine the value associated with
consumption
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Value and the CVF Components
• Relationship quality
– Customer relationship management
• Internal influences
– The psychology of the consumer
• Cognition
• Affect
– The personality of the consumer
• Individual differences
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Value and the CVF Components
• External influences
– Social environment
– Situational influences
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Value
• Personal assessment of the net worth
obtained from an activity
– Utilitarian value - Derived from a product that
helps the consumer solve problems and
accomplish tasks that are a part of being a
consumer
– Hedonic value - The immediate gratification that
comes from experiencing some activity
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Marketing Strategy
• Marketing Myopia - a condition in which a
company views itself competing in a product
business rather than in a value, or benefits
producing, business
• Marketing Tactics - Involve price, promotion,
product, and distribution decisions
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Total Value Concept
• Augmented product - The original product
plus the extra things needed to increase the
value from consumption
– Every product’s value is made up of the basic
benefits, plus the augmented product, plus the
“feel” benefits
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Value Is Co-Created
• Value co-creation is the realization that a
consumer is necessary and must pay a part in
order to produce value
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Market Segmentation and Product
Differentiation
• Market segmentation - The separation of a
market into groups based on different
demand curves associated with each group
• Product differentiation - A marketplace
condition in which consumers do not view all
competing products as identical to one
another
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
A Perceptual Map
• Used to depict graphically the positioning of
competing products
• A blue ocean strategy seeks to position a firm
far away from competitors
– When successful, the firm creates an industry of
its own and at least for a time, isolates itself from
competitors
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Customer Lifetime Value (CLV)
• Represents the approximate worth of a
customer to a company in economic terms
CLV = npv(sales-costs) + npv(equity)
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.