Understanding Value: The Role of Consumer Preferences

It is now widely believed that delivering customer value is the key to corporate success (@R19). It is imperative, therefore, that firms understand how consumers assess value. Prior research on value has not examined the role of consumer preferences in quality judgements and value formation. In this exploratory study, we attempt to test our main propositions that what consumers want in a product or service drives their perception of product quality and that it influences both perceived value and willingness to buy. Our study involves 524 student subjects in three experiments. We find strong evidence to support our propositions and confirm the influence of consumer preferences on perceived quality, perceived value and purchase intention. Since these findings are consistent across three product categories (durable, non-durable, and service), we conclude that the essential process of quality and value perception may not be sensitive to type of product. From a managerial perspective, this study underscores the value of approaching the business from the customer’s angle. It validates the soundness of techniques such as “quality function deployment” as means to incorporate the “voice of the customer” in the product design process. Firms need to formulate and communicate product attributes to target markets in terms of consumer (or customer) needs and wants. Businesses need to pay close attention to designing marketing information systems that identify and monitor consumer preferences as well as ascertain their relative importance.