Study of Means End Value Chain Model

Prepared by Academic Guide

Piyush Padgil Prof. Sujoy Bhattacharya

09BM8036

AMRP Project Presentation

Objective of the Project

To study the Means End Value Chain Model and its formation for the Cosmetic Industry.

Methodology

Data Analysis

Factors Analysis Regression Analysis Mediation Analysis

Primary Data Collection

Questionnaire preparation Data Collection

Determination of Factors affecting purchase of Cosmetics Factors analysis for identification of

important factors Secondary data gathering

Literature Review

Understanding of Customer perceived value

Understanding of Means End Chain Model

Study of Factor, Regression and Mediation

analysis

Literature Review

Means – End Chain Model

Terms Ends – Desirable valued states of a customer e.g. happiness,

security, achievement. Means – Objects (products) or activities by which to attend End

state. Values – powerful force driving the consumer decision making

process

Linking objects (products) as a means to attend the desired end states of a customer.

Helps in better positioning of the product/services by appealing to customer’s values

Values may be implicit and thus means-end model helps in greater insight into consumer behavior

Assumptions: Values play a dominant role in consumer decision process Customers group product according to their ability to fulfill

certain needs and thus reduce complexity.

Means – End Chain ModelMeans – End Chain

Matrices Inputs & Outputs

Value Level Distinction

Consequence Level Distinctions

Grouping Level Distinctions

Values

Consequences

Situations

Desirable & Undesirable Consequence

Relevant Consequenc

es

Hierarchy of Grouping level distinction

Grouping level distinction

Products

Relevant Consequences

Product Considered

Situations

Product Chosen or Evoked Set

Products

Customer Perceived Value

– Perceived by the buyer rather than seller– Involve a trade-off between what is received and

what needs to be given up– Defined in terms of utility, worth, quality,

benefits.– Instances when customer think about value– Value is perceived in two scenarios – purchase

and use.– Purchase scenario focus on the predicted value

and attributes of the product– Use scenario measures the received value and

forms evaluative opinions about product value.

Customer driven concept of Value

Customer value is a customer’s perceived preference for and evaluation of those attributes, attribute performances, and consequences arising from use that facilitates achieving the

customer’s goals and purposes in use situations.

Customer Value Hierarchy model (Means End Way)

Customer’s goals and purposes

Desired consequence in use situations

Desired product attributes and

attribute performances

Goal – based satisfaction

Consequence – based satisfaction

Attribute – based satisfaction

Desired Customer Value Customer satisfaction with Received Value

Determination of Customer Values

Data Collection from 31 respondents Respondents asked to rate 15 values

Factor Analysis to reduce the factors to 5 important ones namely Feeling of Confidence Attention seeking Popularity driven Need of Social acceptance Convenience and comfort seeking

Questionnaire

Adobe Acrobat Document

Factor Analysis results

Means End Chain Model Analysis

Healthy Diet

Workout

Cosmetics for Nourishment

Cosmetics for Quick

Enhancements

Skin Treatment

Confidence

Attention

Social Acceptance

Popularity

Convenience

Good Looks

Hypothesis Testing Null Hypothesis 1 - Cosmetics have no relevance for looking

good

Null Hypothesis 2 - The End State (Good looks) does not have any mediation effect on the means and values of the consumer

Sample Size = 92 respondents Random sampling

QuestionnaireAdobe Acrobat

Document

Null Hypothesis 1 – Cosmetics are not relevant for looking good

Multiple Regression Analysis

Cosmetics for Nourishment - t value of 5.491 which is very high , hence it is significant. Null hypothesis is rejected

Null Hypothesis 2 – The End State (Good looks) does not have any mediation effect on the means and values of the consumer

Mediation Analysis

IV (Means) DV (Values)

Mediator (End)

•IV predicts the mediator•IV predicts the DV•the mediator predicts the DV

Highly significant, hence IV affects mediator

IV predicts mediator

a sa

Mediator predicts DV controlling IV

b sb

Sobel Test for Mediationa = raw (unstandardized) regression coefficient for the association between IV and mediator.sa = standard error of a.b = raw coefficient for the association between the mediator and the DV (when the IV is also a predictor of the DV).sb = standard error of b.

Calculation at - http://people.ku.edu/~preacher/sobel/sobel.htm

As the p-value in this case is very less we can say that the mediation effect exists.

ReferencesPapers A Means-End Chain Model Based on Consumer Categorization Processes Author(s):

Jonathan Gutman, 1982 Beyond Barry and Kenny: Statistical Mediation Analysis in new millennium by Andrew

F. Hayes, 2009 Reflection on getting competitive advantage through Customer Value by A.

Parsuraman, Customer Value – The Next source of competitive advantage by Robert B. Woodruff,

1997 Bhattacharya Priyanka [2006], “India’s Cosmetic Market Ready for Big Leap”, Global

Cosmetics Industry. Bhattacharya Priyanka [2009], “Indian Beauty Market Roundup”, Global Cosmetics

Industry.

Websites http://economictimes.indiatimes.com/tv/daily/Comparison-of-luxury-brands-in-India-and

-abroad/videoshow/6960792.cms http://economictimes.indiatimes.com/tv/daily/Exclusive-Boom-in-Indian-luxury-market/v

ideoshow/6923476.cms

http://www.time.com/time/magazine/article/0,9171,1179415,00.html http://lifestyle.iloveindia.com/lounge/french-luxury-brands-in-india-651.html http://luxpresso.com/news-beauty/where-to-spend-it-on-limited-edition-perfumes/2141