Value as a concept in the buyers’ minds
Value is produced not only by labour [so how much work goes into something] but also by capital [i.e money], and ultimately it is a concept found in the buyers’ minds out of their consumer experience.
– Philip Kotler, Principles of Marketing
Pain, Gain, Needs and Tastes
For Philip Kotler, the father of modern marketing, customer value is the elements of a product or service that will contribute to a customer’s preferences, needs and tastes, and/or removing certain pain-factors that inhibit that customer’s preferences, needs and tastes.
Take an apple!
If you like an apple, then what is it you are looking for in them?
A good size, a good price? A guarantee that there won’t be a worm in it? Or that it was produced organically, without any additional chemicals in the farming process?
Philip Kotler: Customer Value
Based on your own personal experiences, what constitutes ‘value’ for you as a consumer, will probably differ between the different people reading this.
And even your own idea of what is a valuable apple will probably change in the coming years.
Value Proposition Canvas
A recently developed way of understanding the dynamic between the value a customer is looking for and the value a product or service provides is the Value Proposition Canvas.
Alex Osterwalder developed this in an effort to visualise the notions developed by previous thinkers like Philip Kotler.
In it, Osterwalder highlights three primary things:
- Defining your customer profile
- Visualising the value you create
- Fit your product to the right market
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