Price Vs Value Marketing

So the higher the perceived benefit and or the lower the price of a product the higher the customer value and the greater the likelihood that customers will choose that product. For example consider a person selling gold bars for 5 a piece.

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We will return to this later exhibit 1.

Price vs value marketing. The most important distinction between price and value is the fact that price is arbitrary and value is fundamental. This is because most customers compare the entire marketing offering and do not simply make their purchase decision based solely on a product s price. More precisely customer value equals customer perceived benefits minus customer perceived price.

In other words a stock s actual value is whatever someone is willing to pay. Rather price is one of several variables customers evaluate when they mentally assess. A stock s trading price represents the number that an arm s length willing seller and willing buyer find agreeable to each party.

For most customers price by itself is not the key factor when a purchase is being considered. However many occasions come up where a stock s price or the amount at which it trades on the open market is quite different than its value.

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