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What Is Perceived Value?
Let me explain perceived value directly: it's your evaluation as a customer of a product or service's merits and how well it meets your needs and expectations, especially when you compare it to similar options from competitors.
As a marketing professional, I focus on influencing your perceived value by highlighting the attributes that make our product superior to the competition.
Key Takeaways
You should know that perceived value is your personal perception of a product or service's merit or desirability, particularly against a competitor's offering. It's measured by the price you're willing to pay for that good or service. In marketing, we work to influence and increase this perceived value by emphasizing qualities like aesthetic design, accessibility, or convenience.
Understanding Perceived Value
Perceived value boils down to the price you're willing to pay for a good or service. Even when you make a quick decision in a store aisle, you're analyzing how well the product can fulfill your need and provide satisfaction compared to other brands.
My role as a marketer is to enhance the perceived value of the brand I'm promoting. When we price products, we consider this perceived value. Sometimes, the price reflects more of the emotional appeal than the actual production cost.
Remember, even those snap decisions in the store involve assessing a product's ability to meet your needs and deliver satisfaction.
Types of Perceived Utility Value
If you're a marketer like me, you influence perceived value by defining a product's attributes in terms of its utility—the extra benefits and values you expect as a customer when using it. This perceived utility can vary widely even among similar products.
Five Types of Utilities in Marketing Campaigns
- Form utility is the aesthetic appeal of the product's physical design; even something practical like a frying pan gains perceived value from an appealing look.
- Task utility is the value from a service that saves you time, effort, or money, such as car detailing or laundry services.
- Time utility comes from easy access, like 24-hour service versus limited hours.
- Place utility is about location convenience, for example, a fast-food spot around the corner versus one 20 miles away.
- Possession utility involves how easy it is to purchase, such as online ordering with home delivery or in-store pickup at a department store.
Special Considerations of Perceived Value
A company's brand communicates expectations tied to its products or services, which is why a well-established brand can charge more than generic versions. For instance, Advil and Motrin both have ibuprofen but are priced higher than generics.
Luxury goods take this further by adding prestige; the value isn't just in utility but in the status of owning and using them. A Rolex watch's perceived value stems from its image as a symbol of success and taste, not merely its function.
On the other end, some brands position themselves as smart bargains, where the perceived value is the low price compared to competitors of similar quality.
What Does Perceived Value Boil Down To?
It comes down to the price you're willing to pay for a good or service.
How Do Marketers Define Perceived Value?
We define it by focusing on the product's utility—the extra benefits and values you expect from using it.
Why Do Some Brands Charge More for the Same Product or Service?
A strong brand commands higher prices than generics because it conveys specific expectations about its products or services.
The Bottom Line
In marketing terms, perceived value is your evaluation of a product or service's merits and how it meets your needs and expectations, especially compared to competitors.
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