Price CustomersPrice CustomersOROR

Value CustomersValue Customers

Price CustomersPrice CustomersOROR

Value CustomersValue Customers

Author:Subir GhoshPresident – Aegis Global AcademyAn Essar Enterprisewww.aegisglobalacademy.com

Definitions

• Price = The money the buyer must give to the seller as part of the purchase agreement

• Value = Consumption value + Transaction value

Classical definition of economic value• Economic value =

Reference value(price of best alternative) +

Differentiation value(difference-ve/+ve with best alternative)

How do Consumers Process Value

• Basically along 3 dimensions

Economic Dimension(Price cheap/expensive/ Fair)

Functional Dimension(Various product features)

Emotional Dimension(Reassurance/ Status)

How do Firms Deliver Value

CustomizationProduct customization

Communication customizationFeature customization

InnovationNew Products, New features, Improved features, Innovation communication

StandardizationMass productionInventory holding level

Types of Goods and Services

Necessities Routine Daily Needs

Emergency Sudden/ Time bound need

Convenience Goods Free up Time

Indulgence Goods Status/ Pleasure

Consumer Segmentation

Price BuyersHigh

Pain of Price

LowConvenience Buyer Relationship Buyer

Value Ascribed to DifferentiationLow High

Value buyers

Types of Consumers

Price Buyers Price Buyers Lowest price with Minimum level of acceptable quality

Convenience Buyers Convenience Buyers Buy what is Easily or readily available

Value Buyers Value Buyers Spend time studying what Alternatives are available , willing to pay price if benefits are adequate

Relationship Buyers Relationship Buyers Stick to Preferred Brands as long as the price differentials are Reasonable.

Price Vs Value

Conclusion

•Insidious and Anomalous Comparison

•Customers Display multiple buying personalities depending on type of goods

•Depending on Occasion of Purchase

•Depending on place of purchase

Let’s begin…