Understanding Consumer ValueRichard Ferrers Sept/Oct 2011

Questions

• What is value?

• How does value work? Process of value?

• How do consumers understand value in a new technology?

• How do consumers buy mobile phones?

Answers

• Value meanings: what we value

• Value practices: how we value value

• Value conversation: gathering information to value

• Value actions: buying in, waiting

Impact of Value theory• The Value Conversation: engage consumers in

an ongoing conversation to discover and deliver value. Value Management; discover and deliver value through value conversation. Value Leadership; deliver what consumers need, not what they think they want.

• Measure value: measure consumer attitude vector; strong/weak, positive/negative. Quantitative, ongoing, fast-changing, social.

Why we buy/adopt something new?

• Consumers buy/adopt to create or protect value. Value makes us feel good. Loss of value makes us irritated if small, or mad if a large loss.

• Value has multiple competing meanings, eg price vs quality, easy vs powerful, fun vs quick.

• Consumers use emotion to aggregate, cut through multiple competing value meanings.

• Overall value simplifies multiple value meanings into one emotional perspective.

• Consumers follow emotion rather than goals.

• Attitude describes overall value, with strength (strong, weak) and direction (good, bad).

Value is:• a dynamic, emotional practice assessing and

exploiting a customer's environment

• Fast-moving in some contexts

• Not just being new, but being better

• "delights [consumers] and makes employees proud"

Value Meanings• High level: $$$, time, function, power

• Low level: instances of value in a particular instance eg time => convenience, saves time, eg power => unlimited, function => tool, usefulness. Also fun, sexy, cool, easy, new, quality.

• I found 12 high level value meanings, and 80 low level meanings for mobile phones... Possibly unlimited low level value meanings

• Other high level meanings: beauty, need, emotion, newness, service/reliability, duty, simplicity, community/connection.

Value Practices

• Seven value practices: exploring, comparing, filtering, closing, recommending, inquiring, observing

• Value practices gather or reject value information we assess against value meanings

Value StructurePre-

purchasePost-

purchaseResult of

Value

Social Practice Practice

Individual Meaning/ Practice Meaning Action

Innovator Action

Value Meanings

Pre- Purchase

Post- Purchase Underlying

Individual

Novelty, beauty,

connecting, duty, power

Reliability, Service, simplicity

Need, function, emotion,

price

Value PracticesPre-

PurchasePost-

Purchase

SocialObserving, Recommen

d, Inquiring Ty

Recommend,

comparing

Individual Exploring, Comparing

Waiting, Buying

Innovator Inducements Lock-in Seeking

Assistance