© 2009 South-Western, a division of Cengage Learning.

Chapter 2: Value and the Consumer Behavior Value Framework

Babin/Harris

© 2009 South-Western, a division of Cengage Learning. 2-2

Learning Outcomes

1. Describe the consumer value framework, including its basic components.

2. Define consumer value and compare and contrast two key types of value.

3. Apply the concepts of marketing strategy and marketing tactics to describe the way firms go about creating value for consumers.

4. Explain the way market characteristics like market segmentation and product differentiation affect marketing strategy.

5. Analyze consumer markets using elementary perceptual maps.

6. Justify adopting the concept of consumers’ lifetime value as an effective long-term orientation for many firms.

© 2009 South-Western, a division of Cengage Learning. 2-3

The Consumer Value Framework (CVF)

Represents consumer behavior theory illustrating factors that shape consumption related behaviors and ultimately determine the value associated with consumption.

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Value and the CVF Components

Value is at the heart of experiencing and understanding consumer behavior.

Components of the CVF: Relationship quality Consumption process Internal influences External influences

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Relationship Quality

Connectedness

High perceived value improves relationship quality.

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Consumption Process

Needs Wants Exchange Costs and benefits Reactions

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Internal Influences

Things that go on inside the consumer or that can be thought of as part of the consumer. The psychology of the consumer. The personality of the consumer.

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Psychology of the Consumer

Cognition

Affect

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Personality of the Consumer

Every consumer has certain characteristics and traits that help define them as an individual.

Individual differences

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External Influences: Interpersonal Influences

External influences include the social and cultural aspects of life as a consumer. Social environment Situational influences

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Value

Value = What you get – What you give

Utilitarian value

Hedonic value

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Marketing Strategy

The way a company goes about creating value for customers.

Strategy exists at several levels: Corporate strategy Marketing strategy Marketing tactics

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Total Value Concept

The understanding that products provide value in multiple ways.

Every product’s value is made up of the basic benefits, plus the augmented product, plus the “feel” benefits.

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Strategy

Market Segmentation Product Differentiation Product Positioning

Perceptual Map Customer Lifetime Value

CLV=npv(sales – costs) + npv(equity)

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