Conceptualising 'Value for the Customer': An Attributional, Structural and Dispositional Analysis

Academy of Marketing Science Review, 2003

Why 'Value for the Customer'?

The term 'value for the customer' has no prima facie authority of the type that may be afforded the terms 'satisfaction', 'service quality', or 'marketing'. It has been chosen for this paper precisely because it has neither clearly defined status nor common use. Its primary purpose is to act as an 'umbrella' term, one that captures a range of associated, existing concepts, all of which use similar names and imply a similar idea - that there exists some discernable property that is perceived/derived/experienced by a customer and which explains their psephological connection to a particular good or service.

Occasionally, within the marketing literature, this property is represented by the word 'value' alone and is given a demand-side orientation by the context in which it is used. For example, when Bolton, Kannan and Bramlett (2000 p. 97) state, "Customers make repatronage decisions on the basis of their predictions concerning the value of a future product/service ..."; or where Heskett, et al (1994, p. 166) claim "Value drives customer satisfaction"; or when Hallowell (1996, p.28) suggests "satisfaction is the customer's perception of the value received in a transaction or relationship ...", each appears to be addressing a similar concept to that implied by the term 'value for the customer'.

On other occasions this property is given a more explicit name: similar ideas also appear to be represented by the terms 'customer value' (e.g. Anderson and Narus, 1998; Woodruff, 1997; also Holbrook 1994 and 1996, but amended to 'consumer value' for 1999); 'customer perceived value' (Ravald and Grönroos, 1996), 'subjective expected value' (Bolton, 1998), 'customer-valued quality' (Hochman, 1996), and even 'value consciousness' (Lichtenstein, Netemeyer, and Burton, 1990). Intuitively, all might be perceived as representing an essentially uniform idea, and although Morris Holbrook may well have changed the name of his particular construct to purposely distinguish it from others of similar designation, there is little evidence to indicate that the literature generally proposes either purposely convergent, or individually distinct, notions of 'value for the customer'.

'Value For The Customer' - What Does It Mean?

The term 'value', of course, is replete with semantic variety and the often applied epithet 'customer value' is, itself, an ambiguous appendage that can be used to represent both what the customer perceives/receives and also what the customer can deliver. The former, as identified earlier, can be associated with the author's notion of 'value for the customer' (VC), whilst the latter is conventionally called 'customer lifetime value', or CLV (e.g. Grant and Schlesinger, 1995; Pfeifer, 1999). This paper is concerned only with the former, however, and is rooted in the assumption that future VC research will only have 'pragmatic validity' (Kvale, in Miles and Huberman, 1994, p. 280) if all researchers have a shared concept of what this means.

Recent empirical studies concerning demand-sided perceptions of value (e.g. Caruana, Money and Berthon, 2000; Chapman and Wahlers, 1999; Lemmink, de Ruyter and Wetzels, 1998; Patterson and Spreng, 1997; Spreng, Dixon and Olshavsky, 1993) are predicated on different, albeit related, constructs. This means that direct comparison of output from such studies is, at least, problematic. Perhaps the greatest contribution made by Parasuraman, Zeithaml and Berry (PZB) has been to fix the conceptual realm (Teas and Palan, 1997) of 'service quality' (PZB, 1985, 1988) within coherent linguistic and physical realms of meaning. Thus, although there may be little consensus regarding what service quality really is and how it might truly be measured (see, for example, Buttle, 1996), we do have a universally recognized point of departure. And when considered within a PBZ-defined frame of reality we know, precisely, what 'service quality' is.

We are perhaps some way to achieving a similar framework regarding satisfaction (see Oliver, 1997; and Giese and Cote, 2000) but consensus regarding the nature of VC still appears distant. Witness, for instance, the current lack of unanimity concerning measurement. Gale (1994), perhaps the first to attempt quantification of value in a marketing context, uses a mapping process that enables a supplier to benchmark the 'value' of its market offering with that of its competitors through a comparative review of customer's perceptions regarding both product price and quality. Tzokas and Saren (undated), however, argue that "Customer value is a dynamic and transformational higher level construct which should not be reduced to a low-level operational measurement" (p. 13). Such criticism would bring about a robust exchange from Anderson and Narus (1998) for whom VC is stated simply in terms of dollars and hours, but would align more easily with a Woodruff and Gardial (1996) perspective that relies on excavatory means-end laddering techniques to unfold evidence of consumers' deepest desires.