Introduction to ValueMMIM 511 Dr Mary Tate (VUW)

Theories of quality and value are very old

– Plato– Aristotle– St Thomas Aquinas– Karl Marx– Adam Smith

“Value” (examples?)Type of value Descriptions Author (s)

Utilitarian Value An instrumental, task-related, rational, functional, cognitive, and a means to an end

Babin et al. (1994)

Overall assessment of functional benefits incorporating the following dimension: (i) traditional price saving; (ii) service; (iii) time-saving; and (iv) merchandise selection

Lee and Overby (2004)

Hedonic Value Reflecting the entertainment and emotional worth of shopping; non-instrumental, experiential, and affective

Babin et al. (1994)

Concerned with the extent to which a product creates appropriate experiences, feelings, and emotions to the customer.

Smith and Colgate (2007)

Extrinsic Value Utilitarian or Instrumental Use of a particular service as a means to a specific end

Hartman (1962)

Intrinsic Value Emotional Appreciation of the consumption Hartman (1962)

“Outcome expectation” or

“usefulness”

Enjoyability

Similar to Utilitarian

Similar to Hedonic Good “in itself”

Means to some good end

More “Value” (examples?)Systemic Value Logical or Rational aspect Hartman

(1962)Emotional Value Related to various affective states. The

value can be either positive or negative. Examples for positive emotional value are confidence or excitement, whilst the examples for negative emotional value are fear or anger

Sheth, Newman, and Gross (1991)

Feelings of customer Mattsson (1991)

The utility derived from the feelings or affective states that a product generate

Sweeney and Soutar (2001)

Practical Value Physical or Functional Aspects of consumption

Mattsson (1991)

Social Value An image that is consistent with the norms of a consumer’s friends or associates and/or with the social image the consumer wishes to project

Sheth et al. (1991)

The utility derived from the product’s ability to enhance social concept

Sweeney and Soutar (2001)

Epistemic Value Concerns with a desire for knowledge. The knowledge in this value can be motivated by intellectual curiosity or the seeking of novelty

Sheth et al. (1991)

Conditional Value A value that reflects the fact that some market choices are contingent on the situation or set of circumstances faced by the consumers

Sheth et al. (1991)

Hedonic? Intrinsic?

Various types of outcome value

Various types of outcome value

Various types of outcome value

Comparative

Value co-creation

Vargo et al. (2008)

Value co-creation

Payne et al. (2008)

Value co-creation

Unbundled “servitized” IT components

User-created content or applications

Who or what affects it - context?

How

• Ask people? Surveys?• Holistically? Continuously? • Formally or informally?• Formative or summative?

In conclusion

• Cost reduction is a common focus because it is “easy”

• What we mean by value and what we mean by the technology or the system are not always clear

• Human factors are very important• Perceptions (satisfaction) can be difficult to

reconcile with figures• Time in the life cycle makes a big difference