CONSUMER BEHAVIOUR

Consumer Behaviour

Consumer Behaviour

Literature Review

Both marketing practitioners and scientists have come to recognize the major influence that perceived value has on consumer behaviour. This identification has evolved to the point where control over the provision of value to customers has become a strategic imperative for the 1990s, rivalling satisfaction for management attention. Many leading companies now feel that the creation of outstanding consumer value is the only secure route to achieving sustainable financial and market success (Coopers and Lybrand, 1998).

Despite the strength of this concept, managers who must deliver superior customer value still raise questions as to how consumers measure value and the activities their organizations should implement in order to secure a value advantage (Woodruff, 1997).

Conceptualization of perceived value

The traditional antecedents to perceived value studied in the last two decades of the 20th century have been mainly limited to two basic functions of product perceived quality and perceived monetary price. Zeithaml (1988) described value in terms of tradeoffs of salient “give” and “get” components. This can be described as a cognitive or rational model of decision making. It considers perceived value as “the customer's assessment of the utility of a product based on perceptions of what is received and what is given”. Perceived quality is defined as the consumer's overall judgment about a product's excellence or superiority; it is the benefit component of value. Perceived price is defined as the cost component of value; it is what the consumer gives up to obtain a product or service. This is similar in concept to Bilkey's utility model, described by Peter and Tarpey (1975), which takes into account positive (perceived return) and negative valences (perceived risk).

Peter and Tarpey (1975) identified three broad, strategy-based consumer decision-making frameworks. The first is a perceived risk framework that characterizes the consumer as motivated to minimize the expected negative consequences, or utility, of a purchase. The second is an attitude framework that is oriented to positive evaluations. The third is a valence framework that assumes the consumers perceive a product as having both positive and negative attributes. Consumers act to maximize the overall or “net” valence resulting from negative and positive attributes of an act. The so-called net valence, additive utility model, is the arithmetic difference between the positive valences and the negative valences. According to the finding of Ruiz et al. (2007), perceptions of customer value are very much dependent upon service quality, brand image and confidence benefits, and less upon product quality and sacrifice in the service domain.

Previous research on perceived value

Several empirical explorations of the antecedents of perceived value were helpful in providing a basis for our model. A study by Dodds et al. (1991) found that price had a negative effect on a product's value for money and people's willingness-to-buy on durable goods, but a positive effect on perceived product quality. Kerin et al. (1992) investigated the effect of price, product quality and shopping experience had on value perceptions, concluding that the shopping experience had a greater effect on store value than did ...