What Is Perceived Value?

In marketing terminology, perceived value is customers’ evaluation of a product or service’s merits and its ability to meet their need🍸s and expectations, especially compared with its peers.

Marketing professionals try to influeꦦnce consumers’ perceived value of a product by describing the attributes that make it superior to the competition.

Understanding Perceived Value

Perceived value comes down to the price that the public is willing to pay for a good or service. Even a s🐭nap decision made in a store aisle involves an analysis of a product’s ability to fulfill a need and provide satisfaction compared to other products under𒆙 different brand names.

The work of the marketing p🐈rofessional is to enhance the perceive🧸d value of the brand they are selling.

The pricing of products takes perceived value into consideration. In some cases, the price of a product or service may h𓂃ave more to do with its eꦰmotional appeal than with the actual cost of production.

Types of Perceived Utility Value

Marketers who want to influence the perceived value of a product define its attributes in terms oꦏf its utility, or the extra benefits and values that the customer🌳 expects to get in using it. The perceived utility of many products and services may differ widely even among similar or virtually identical products.

Theꦍre are f🧸ive types of utilities that companies aim to create through marketing campaigns for products:

• Form utility is the aesthetic appeal of the physical design of a product. Even a utilitarian product like a frying pan can increase in perceived value because of its appealing design.
• Task utility is the value attached to a service that saves the customer time, effort, or money. Car detailing shops and laundry services offer utility value.
• Time utility refers to the ease of access to a service or product, such as 24-hour service compared to 9-to-5 hours.
• Place utility is the convenience of the location, like a fast-food outlet that’s around the corner compared to a restaurant that’s 20 miles away.
• Possession utility refers to the ease of purchasing the product. A department store that features online ordering, home delivery, or in-store pickup is aiming for possession utility.

Special Considerations of Perceived Value

A company’s brand is meant to communicate a set of expectations associated with its products or services. That’s why a well-established brand can command a higher price than its generic eq💙uivalents. Advil and Motrin both contain ibuprofen, but both brands are priced higher than generic ibuprofen.

Lux🎀ury goods, however, carry the perception of value to another level with 🍌the addition of prestige. The highest value of luxury goods is associated not with their utility but with the prestige that owning and using it entails. The perceived value of a Rolex watch is not based on its functionality but with its image as a mark of personal success and refined taste.

At the opposite end of the scale, some brands are marketed as smart bargains. The perceived value of a product may be its low price compared with competit𝄹ors of equal quality.

The Bottom Line

In marketing parlance, perceived value is customers’ evaluation of the merits of a product or service and its ability to meet their needs and expectations, especially in comparison with its peers.