Value Above Cost: Driving Superior Financial Performance with CVA

4. Perceived Value

Perceived value is the ceiling on price. It is the maximum the customer is willing to pay for the product or service and depends on what benefits the customer believes they are receiving from the product or service. It almost always can be expected to be below actual value just because a customer rarely understands all the benefits that they receive (Exhibit 4.1).

Exhibit 4.1 Customer Value Added

Reprinted with permission from “How Marketing Affects Shareholder Value,” The Arrow Group, Ltd.^®, New York, NY, 2008.

Managing perceived value is the purpose of marketing. This chapter focuses on how to manage and measure perceived ...