Industrial Marketing — A Value Oriented Perspective

Abstract

Value lies at the heart of marketing and is receiving increased attention from business marketers and scholars. The Merriam-Webster’s Collegiate Dictionary (2001) defines value as: 1. a fair return or equivalent in goods, services or money for something exchanged, 2. the monetary worth of “something”. It is clear that value involves money or its equivalent and an exchange of something of worth to the participants in an exchange. There are a number of definitions of value in the literature. Anderson, Jain and Chintagunta (1993) define value in terms of the monetary worth of benefits that customers receive for the price paid. The authors discuss nine methods that have been used to measure value, ranging from an internal engineering assessment that measures the value of the product through laboratory tests within the supplier’s firm, to conjoint or tradeoff analysis. We will use the definition suggested by Anderson and Narus (2004). They define value as “the worth in monetary terms of the economic, technical, service, and social benefits a customer firm receives for the price it pays for a market offering” (Anderson/Narus, 2004, p. 6). The authors emphasize that value is expressed in monetary terms. Further, they state, “we can conceptually represent any market offering as a set of economic, service and social benefits a customer firm receives. By benefits, we mean net benefits where any costs a customer incurs in obtaining the desired benefit, except for purchase price are also included” (Anderson/Narus, 2004, p. 6). The third point the authors stress is that market offerings are defined by value and price. Value considerations take place within some context, where it is possible that customers may decide to make the product themselves. Value requires a price to be set for the market offering to a buyer. If the price is set too low, the buyer gains value and the seller leaves money on the table. If the price is set too high, the value to the buyer shrinks, and the chances of the going to another supplier increase.