WMG Full-Time Master’s Programmes

Strategic Marketing

Values and customer value

Dr Susan Wakenshaw

September 2019
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 What is marketing?

Marketing is the activity, set of institutions,

and processes for creating, delivering, and
exchanging offerings that have value
for customers, clients, partners and society at
large (AMA, 2007).
Learning outcomes

By the end of today’s session, students would

be able to:
 Understand values, values and consumer
behaviour, and value of objects in
philosophy
 Understand value and customer value in
marketing
 Understand customer value for firms such
as Customer life value
Session 1: Values and value
By the end of this session session, students would
be able to understand:
 Values
 Values and consumer behaviour
 Value of an object in philosophy
 Consumer value
Imagine it is a hot day…

VERY hot…
How could you make yourself feel
cooler?
6
 Enter Text and
Press Send

How could you make yourself feel cooler?

On a hot day, which would you prefer to
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have with a meal at a restaurant?

1. Cold water
49.12%
2. Hot water
14.04%
3. Room Temperature Water
36.84%

30
Definition of values

“values as desirable, trans-situational goals that

vary in their importance as guiding principles
in people’s lives” (Schwartz, 1992).
The nature of values
 Beliefs: linked inseparably to affect. When values are activated, they become infused with
feeling. E.g. independence …

 Desirable goals (about desirable end states or behaviour)

that motivate action. E.g. social order, justice, and helpfulness [terminal vs instrumental]

 transcend specific actions and situations. For example, Obedience

and honesty are values … distinguish values from norms and attitudes that usually refer to specific
actions, objects or situations.

 standards or criteria guide the selection of actions, policies, people and events.
People decide what is good or bad, justified or illegitimate, worth doing or avoiding based on the
possible consequences for their cherished values.

 are ordered by importance relative to one another. People’s

value form an ordered system of priorities that characterise them as individuals .. Achievement or justice,
novelty or tradition … this hierarchical feature also distinguish values from norms and attitudes. The
tradeoff among relevant, competing values guides attitudes and behaviours (Schwartz, 1992, 1996). Values
influence action when they are relevant in the context and important to the actor.
(source: Schwartz, 2012).
 Values as criteria/standard are important to evaluate:
 what is good and bad,
 what is ‘important in life’ (Dewey, 1922)
 anything of ‘interest’ (Perry, 1954)
 ‘ways to live’ (Morris, 1956)
 ‘Desirable end states or behaviours (Schwartz and Blisky, 1987).
 Three levels of Human Values…
The goal types terminal values
are the enduring ‘ends’ that
individuals seek in their lives and
their instrumental values are the
means of getting there)
Specific to Individual Inherited & Learned
Personal

Interests values served:

Individualistic vs collectivistic
Specific to Group Culture Learned

Motivational domains in which a

set of universal human requirements
are expressed. Universal Human Nature Inherited
 Basic human values
Understanding, appreciation, tolerance, and
‘ Creativity, freedom, choosing own goals, curious,
protection for the welfare of all people and
independent) [self-respect, intelligent , privacy]’
for nature

helpful, honest, forgiving,

‘a varied life, an exiting life, daring’ responsible, loyal, true
friendship, mature love) [sense
of belonging, meaning in life, a
spiritual life]

‘pleasure, enjoying life,

self-indulgent’ obedient, self-discipline,
politeness, horning parents
and elders [loyal,
responsible]
ambitious, successful, capable, influential)
[intelligent, self-respect, Respect for tradition, humble,
social recognition]’ devout, accepting my portion
in life [moderate, spiritual
Social power, life]
authority, wealth

social order, family security,

national security, clean,
Source: Roccas et al (2002); Schwartz (2012).
reciprocation of favours [healthy,
moderate, sense of belonging]
Motivational domains

To us the most
interesting, facet in the
definition of values is the
motivational domains:
the universal types of
motivational concern
that values express.

Schwartz, Shalom and Bilsky, Wolfgang (1987)

Toward a universal psychological structure of human values
 Specific to Individual Inherited & Learned
Personal
Cognitive
Development
Specific to Group Culture Learned

Universal Human Nature Inherited

Interests values served
 Values may serve individualistic interests (e.g.,
pleasure, independent), collective interests (e.g.,
equality, responsible), or both types of interests
(e.g., wisdom).
 Individualism/collectivism is a major dimension
of value differentiation at both societal levels and
individual levels.
Cultural values

…describes cultures  Cultural values represent the implicitly or explicitly shared

in which the person abstract ideas about what is good, right, and desirable in a
is viewed as an
entity who is society (Williams, 1970).
embedded in the
collectivity and
– the bases for the specific norms that tell people what is
Žfinds meaning in appropriate in various situations.
life largely through
social relationships,
– The ways that societal institutions (e.g. the family,
through identifying education, economic, political, religious systems)
with the group and
participating in its
function, their goals and their modes of operation,
shared way of life  For example, in societies where individual ambition and success are
(Schwartz, 1999) highly valued, the organisation of the economic and legal systems is
likely to be competitive (e.g. capitalist markets and adversarial legal
proceedings). In contrast, a cultural emphasis on group well-being
is likely to be expressed in more cooperative economic and legal
systems (e.g. socialism and mediation).
– Imparted/instructed to societal members through
everyday exposure to customs, laws, norms, scripts, and
organisational practices … (Bourdieu, 1972; Markus &
Kitayama, 1994).
Cultural values

Define the nature

of the relation Conservatism: emphasis on maintenance of the status quo, propriety, (social
between the order, respect for tradition, family security, wisdom).
individual and the
group. Autonomy: the desirability of individuals independently pursuing their own ideas
and intellectual directions

Guarantee
responsible Egalitarianism: recognise one another as moral equals who share basic interests
behaviour that will as human beings.
preserve the social Hierarchy: relying on hierarchical systems of ascribed roles to ensure
fabric. socially responsible behaviour.

Guarantee Mastery : to master and change the world, to assert control, bend it to our
responsible behaviour will, and exploit it in order to further personal or group interests.
that will preserve the
Harmony : accept the world as it is, trying to fit in rather than to change or exploit
social fabric.
it.

Source: Schwartz (1999)

Cultural values

Define the nature

of the relation Conservatism
between the
individual and the
group. Autonomy

Guarantee
Egalitarianism
responsible
behaviour that will
preserve the social Hierarchy
fabric.

Guarantee Mastery
responsible behaviour
that will preserve the
Harmony
social fabric.

Source: Schwartz (1999)

Source: Schwartz
(1999)
Source: Schwartz (1999)
Hofstede’s Cultural Value Dimensions…
Dimension Description
Hofstede (1980, p.
individualism- The degree of interdependence a society remains among its
25) defined culture collectivism members. [1980]
as “…the power distance “the extent to which a society accepts the fact that power in
collective institutions and organizations is distributed unequally”
(Hofstede, 1980b, p. 45). [1980]
programming of uncertainty “the extent to which a society feels threatened by uncertain and
the mind which avoidance ambiguous situations and tries to avoid these situations [1980]
distinguishes the masculinity- The society will be driven by competition, achievements and
members of one femininity success. [1980]

human group Time perspective: Long-term orientation refers to future-oriented values like
long- versus short- persistence and thrift, while a short-term orientation refers to
from another.” term orientation). past- and present-oriented values like respect for tradition and
fulfilling social obligations. [1988]

Indulgence – Allowing gratification of basic drives related to enjoying life and

restraints having fun vs. regulating it through strict social norms. The
extent to which people control their desires and impulses.
 Compare cultural values
https://www.hofstede-insights.com/product/compare-countries/
 China UK
power distance
Power distance
China: A society believes that inequality in society is a society believes that
acceptable; subordinate-superior relationships; Inequalities among people should be minimised. A sense
Individualism of fair play …
China: A highly collectivist culture where people act in the Individualism
interest of group and not necessarily themselves; A highly individualistic and private people. ‘Me’
Masculinity Masculinity
A masculine society
China: A masculine society- success oriented and driven;
Uncertainty avoidance
Uncertainty avoidance
Comfortable in ambiguous situations-’ muddling through’
China: Comfortable with ambiguity. Adaptable and Long term orientation
entrepreneurial no dominant preference
Long-term orientation Indulgence
China: Very pragmatic culture; adapt traditions easily to Indulgent: willingness to realise their impulse and desires;
changed situations… a strong propensity to save and invest, enjoying life and having fun; positive and optimism
thriftiness and perseverance in achieving results
Indulgence
China: a restrained society; have a tendency to cynicism and
pessimism
Source: https://www.hofstede-insights.com/product/compare-countries

07/07/2024 24
Specific to Individual Inherited & Learned
Personal
Socialisation/
internalisation
Specific to Group Culture Learned

Universal Human Nature Inherited

Personal values: Terminal vs instrumental

 Values can be classified by representing with

terminal goals (end states; e.g., equality, wisdom)
or instrumental goals (modes of behavior; e.g.,
capable, obedient).

– Conceptually, the distinction between ends and

means is not clear-cut; an end can readily become a
means and vice versa (Dewey, 1957).
Value systems
Evaluative
beliefs Specific to Individual Inherited & Learned
Personal

Domain specific
values
Specific to Group Culture Learned

Global Universal Human Nature Inherited

values

Vinson et al (1977)
Values and consumer behaviour

Values have only indirect
effect on consumer
Values function as behaviour through less
grounds for abstract mediating factors
consumption such as
behavioural decisions - Value –attitude-
behaviour
(e.g. Carman, 1977;
(Homer and Kahle, 1988).
Williams, 1979). - Values and choice criteria
Value of an object in philosophy
• Define value from axiological perspective (Bengtsson, 2004)
– Valuable properties of objects
– Human agents ‘ascribe value’ to these properties
– ‘Goodness’, defined in evaluative beliefs, which are related to
your values based on your experiences and depend on the
motivational justification.
What is the value of a chair?

Grandma’s Antique chair

chair
Value of an offering
Positive value types Negative value types
Convenience Price
Excellence Time
status Effort
Self-esteem Privacy risk
Enjoyment Security risk
Aesthetics Performance risk
Escapism Financial risk
(spirituality)
Personalization Physical risk

Control Ecological costs

Novelty Societal costs
Relational benefits
Ecological benefits (source: Leroi-Werelds, 2019)
Societal benefits
Session 2: value in marketing

By the end of this session, students would be able to

• Understand value in marketing
• Understand customer value in marketing
Value (singular) in management

• A multitude of perspectives
• labour theories, accounting, economics, strategy,
organisational theory, sociology and psychology
(Wilson & Jantrania, 1994; Woodruff, 1997; Payne & Holt, 2001)
•Firm perspective (e.g. utility, worth, perceived
satisfaction of the customers)
•Customer perspective (e.g. net benefit, mean-end,
phenomenological experiences) (a summary by Ng and
Smith, 2012)
Customer value in marketing
- Utility: perceptions of what is received and what is given
- perceived worth in monetary units: the set of economic, technical, service and social
benefits received by a customer firm in exchange for the price paid for a product
- a tradeoff between the quality or benefits they perceive in the product
relative to the sacrifice they perceive by paying the price
- perceived quality adjusted for the relative price of the product
- emotional bond established between a customer and a producer
- perceived preference for and evaluation of those product
attributes, attribute performances, and consequences arising from use that facilitate (or block)
achieving the customer's goals and purposes in use situations
- preference and experience . A result of assessment/judgement of the offering
conducted against the evaluative criteria in terms of the fulfilment of values
Three Perspectives on Value (Ng, 2012):
1) Value-in-Exchange
• A utility, based on value embedded in a resource and as an output of a labour
process, that exists as a singular entity at a given point of time and can be
exchanged for the other utilities (or for which the customer is prepared to pay)
(Gronroos and Voima, 2012)

• Value is what the customer gives for something (purchase) and is measured in
relation to what is promised by the supplier (Grönroos and Voima, 2013)

Think: “That was good value for money!...But

according to whom?”
2) Value-in-Use
• The value of a product/service is only realised
through being used by the customer and is
measured in relation to the customer’s expectation
of the experience (Woodruff, 1997)
• The customer as the user, creates value, and is the
creator of value (Gronroos and Voima, 2012)
• Think: “A pen’s value is in writing with it… but is it
always the same value?”

Fulgor Nocturnus By Tibaldi- $8 million Bic Cristal by Société Bic $0.10-$0.20

3) Value-in-Context
• The value of a product/service depends on
where, when and how it is being used and
by whom (Vargo & Lusch, 2016).

Beautiful Mind

- John Nash, a Nobel

Laureate in Economics
Context includes:
• Physical Environment (e.g. objects, weather,
time)
• Social Environment (e.g. laws, relationships)
• Knowledge, Skills, and Values of the User
Can be represented as a network or
assemblage (DeLanda, 2006) of these factors
Why does context matter?
 Traditionally, the only way to gain regular access to the use of
something was through possession/ownership of goods.
– For example, music -> Vinyl Records, Cassette Tapes,
CDs, Minidisks, MP3s
• Often due to context, there are limits as to what can be done
with goods
Goods do not (usually) change if the context
changes!
The value of good changes if the context
changes.
Value in context
The Context of Driving a Car
Fuel
The ability to drive

Driver Car
Driving Music

Knowledge of local
driving laws
Weather
Somewhere
To Drive
Context and New Product Development:
The case of Haier (Backaler, 2010)
Haier received a complaint from a farmer about
their clothes washing machine – build-up of dirt in
the plumbing is causing it to break.
Technician discovered dirt is from
washing sweet potatoes!
Haier created a washing machine that
washes vegetables.
Identifying the context in which products/services
are being used can lead to the development of new
products/services to better serve the context.
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 What is it that they (the
customer) value?
Is it the same as what you
(the consumer) value?
44
 Three different value ‘states’

• espoused (professed) value in terms of what

individuals say value is (Cognitive)
• felt or in-use value in terms of what an individual
actually does value (experiential)
• real or appropriate value in terms of what the
reasonable bystander would think value should
be on the basis of what is in an individual’s best
interest (third party)
(Rescher, 1993; Meglino & Ravlin, 1998)
Further complications…
Three different value interests:
• what individuals consider value to be at the present
time
• what individuals will regard as value when the time
comes in the future
• what individuals would value if individuals knew
more, deliberated more carefully and managed to
make certain changes personally or in social entities
(Rescher, 1993)
46
Fundamental characteristics of customer value
Characteristics Description
Interactive Involves an interaction/relationship between a subject and an object
(e.g. a product, service, store, technology, activity)
A trade off A trade off between the benefits and costs of an object
Relativistic It reflects a comparison of one object with another; it differs between
one person and next
Situational Depends on the situation in which the evaluation occurs.
Personal It is subjectively determined by the customer
A preference Embodies a preference
Experiential Not inherent in an object, but in the customer’s experience derived
from the object
Multidimensional Multidimensional and consists of multiple value types

Co-created co-created by the customer by means of resource integration

(Source: Leroi-Werelds, 2019; Holbrooks, 2005)

In summary there is no universally accepted definition of value

However value appears to be:

• an unique higher-order construct that is
perceptual, situational and temporally bound
• created by consumption or possession or both
as a trade-off amongst various benefits and
sacrifices
• and requires explication and validation in
terms of risk reduction of sought
consequences
48
 British Standards Institution
(BS EN 12973:2000 p13)
“Value is the relationship between the
satisfaction of need and resources used in
achieving that satisfaction…”
“…it is not absolute, but relative, and maybe
viewed differently by different parties in different
situations...generally achieving good value
requires balancing a series of conflicting
parameters to arrive at an optimum position.”
49
Customer Value Misconceptions…
“It is extremely
important to remember
that it is customers who
define value and that it Added Value
only exists when the
customer decides that it
does and on the
customer’s terms
reflecting the customer’s Value of the Superior
priorities and Customer Value to
preferences… for the the
firms customer
…therefore it is
important for suppliers
to know what value of
the offering actually
means to customers” Suppliers cannot deliver value… they can
(Piercy, 1997)
only make value propositions
Suppliers ‘Customer Value Propositions’…
Value All Benefits Favourable Points of Resonating Focus
Proposition (promised/suggested) Differentiation
‘There is no
A list of all the benefits All favourable points of The one or two points of
agreement as to Consists of:
that a customer will difference a market offering difference (and perhaps a point of
receive from a market has relative to the next best parity) whose improvement will
what constitutes a offering alternative be valued by the customer for the
customer value foreseeable future

proposition – or
what makes one
Why should our company/I Why should our company What is the most worthwhile
persuasive’ Answers the
customer purchase your offering? purchase your offering (benefits, consequences,
question: instead of your sacrifices) for our company to
competitor’s? keep in mind about your offering
(Anderson et al, 2006)

Points of parity
Requires Knowledge of own market Knowledge of own market Knowledge of how own market
supplier to have: offering offering and next best offering realises value-in-use for
alternatives customers compared with the
Points of next best alternative
differentiation
Has the Benefit assertion Value presumption Requires extensive voice of the
Points of contention potential pitfall: customer value research

Similar value propositions appeal to similar groups of people or

organisations. Also know as ‘market segments’.
Session 3 customer value for the firm
 By the end of this session, students would be
able to understand
– Customer life value
– Strategies for maximizing CLV
– Customer value for the firm
Customer value to the firm
Backward-looking Forward-looking
Recency-frequency-monetary value (RFM) Customer life value (CLV)
Present value of future profits generated
Past customer value (PCV) from a customer over his or her lifetime with
the firm.
Share of wallet (SOW) Customer equity of the firm (CE)

Tenure/duration
taking into account past activity of a forward looking metrics taking into account
customer. the variable nature of customer behaviour
Outdated information being used for and enables firm to treat individual
customer selection and resource allocation. customers differentially and distinctively
from each other depending on their
contributions to the firm.
Strategies for maximizing CLV

 CRM playbook of an organisation

– Customer acquisition
 WOM referrals
 Shipping fees
 Market channels
Making marketing decisions using the response probability,
initial order quantity and duration is not enough.
Companies should select prospects to acquire according to
their lifetime contribution: CLV or CE
Strategies for maximizing CLV
 Customer retention
– when a firm should aggressively and actively pursue
his or her retention.
 Monitoring a customer’s purchasing and attitudinal
behaviour
– Who and when to retain
 Determining how much to spend on a customer
 Accounting for customers’ responsiveness to retention
efforts
 Nurture their cross-buying behaviour
Strategies for maximizing CLV
 Customer churn
– When are the customers likely to churn?
– When and how much spend on churn prevention
 Customer win-back
– Give the customers a second life
 Second life-time value
Customer value for the firm
 Customers contribution to the firm profitability
– Directly: purchase
– Indirectly: non-purchase reactions and engagement
 Referring potential customers
– Customer referral value (CRV): the net present value of the future profits of
new customers who purchased the products as a result of the referral
behaviour of the current customer.
– Individual customer’s referral value
 Influencing current and potential customers in their social network
– The value of an individual’s WOM (customer influence effect CIE and
customer influence value CIV)
 Offering review/feedback for improvements
– Customer knowledge value (CKV)
 Net Promoter Score
“How likely is it that you would recommend our
company/product/service to a friend or colleague?”

Promoter: (score 9 or 10) likely to exhibit value-creating

behaviours, such as buying more, remaining customers for
longer, and making more positive referrals to other potential
customers.

Detractors: (score 0-6) and they are believed to be less likely to

exhibit the value-creating behaviours.

Passives: (Score 7 or 8) behaviour falls in the middle of

Promoters and Detractors
Net Promoter Score
Appendix
 Basic values
Basic values Definition Exemplary values Sources
Self direction Independent thought and (creativity, freedom, choosing …Organismic needs for control
action –choosing, creating, own goals, curious, and mastery and interactional
exploring independent) [self-respect, requirements of autonomy
intelligent , privacy] and independence

Simulation Excitement, novelty, and (a varied life, an exiting life, … organismic needs for variety
challenge in life daring) and simulation in order to
maintain an optimal positive,
level of activation.

Hedonism Pleasure or sensuous (pleasure, enjoying life, self- …organismic needs and the
gratification for oneself. indulgent) pleasure associated with
satisfying them

Achievement Personal success through (ambitious, successful, … demonstrating competence

demonstrating competence capable, influential) in terms of prevailing cultural
according to social [intelligent, self-respect, social standards, obtaining social
standards recognition] approval
Basic values Definition Exemplary values sources
Power Social status and prestige Social power, authority, The functioning of social
control or dominance over wealth institutions … interpersonal
people and resources relationships : a dominance
/submission dimension;
… focus on social esteem.

Security Safety, harmony, and stability of social order, family security, … the basic individual and
society, relationships, and of national security, clean, group maintenance
self reciprocation of favours
[healthy, moderate, sense of
belonging]

Conformity Restraint of actions, obedient, self-discipline, Emphasize self-restraint in

inclinations, and impulses likely politeness, horning parents everyday interaction, usually
to upset or harm others and and elders [loyal, responsible] with close others
violate social expectations or
norms.
Basic values Definition Exemplary values Sources
Tradition Respect, commitment, and acceptance of respect for tradition, Groups develop
the customs and ideas that one’s culture humble, devout, practise, symbols,
or religion provides. accepting my portion ideas, and beliefs that
in life [moderate, represent their shared
spiritual life] experiences and fate.
They often take the
form of religious rites,
beliefs and norms of
behaviour

Benevolence Preserving and enhancing the welfare of (helpful, honest, … the basic
those with whom one is in frequent forgiving, responsible, requirements for
personal contact (the ‘in-group’) loyal, true friendship, smooth group
mature love) [sense of functioning and from
belonging, meaning in organismic need for
life, a spiritual life] affiliation

Universalism Understanding, appreciation, tolerance, (broadminded, social … survival needs of

and protection for the welfare of all justice, equality, world individuals and groups.
people and for nature at peace, world of
beauty, unity with
nature, wisdom,
protecting the
environment) [inner
harmony, a spiritual
life]
 Cultural values
Conservatism A cultural emphasis on maintenance of the status quo, propriety, and restraint of
actions or inclinations that might disrupt the solidary group or the traditional order
(social order, respect for tradition, family security, wisdom).
Autonomy Intellectual Autonomy: A cultural emphasis on the desirability of individuals
independently pursuing their own ideas and intellectual directions (curiosity,
broadmindedness, creativity). Affective Autonomy: A cultural emphasis on the
desirability of individuals independently pursuing affectively positive experience
(pleasure, exciting life, varied life).
Hierarchy A cultural emphasis on the legitimacy of an unequal distribution of power, roles
and resources (social power, authority, humility, wealth)
Egalitarianism Egalitarianism: A cultural emphasis on transcendence of selfish interests in favour
of voluntary commitment to promoting the welfare of others (equality, social
justice, freedom, responsibility, honesty).
Mastery Mastery: A cultural emphasis on getting ahead through active self-assertion
(ambition, success, daring, competence).
Harmony Harmony: A cultural emphasis on fitting harmoniously into the
environment (unity with nature, protecting the environment, world of
beauty).
Value from management foundation (Ng and Smith, 2012)
Firm centric Customer centric

Utility Net benefit

Value is Utility (U) i.e. the total satisfaction received by a Value is net benefit (NB) i.e. difference between the
consumer from consuming an offering that, while benefits and the costs or sacrifices perceived to be
acknowledged to be unmeasurable directly, is able to be associated with acquiring and consuming an offering.
measured relatively across persons and through revealed
preferences, tradeoffs and willingness to pay. A foundation
of economic science.

Worth means-end
Value is the economic worth of the customer to the firm. Value is the perceived preference for and evaluation of
those products attributes, attribute performances and
consequence arising from use that facilitate (or block)
achieving the customers’ goals and purposes in situations’
(woodruffe, 1997, p.142).

Perceived satisfaction Phenomenological experiences: i.e. it resides, not in an

Superior value is often equate to exceeding customer object, a product, or a possession, but rather in the use
Universal Motivational domains of value
Sources Exemplary values

Enjoyment domain Every organism must satisfy its physical Pleasure, a comfortable life, happiness
needs and derive pleasure from doing it. and cheerful

Security domain Every organism needs to survive Inner harmony, family security, national
physically and to avoid threats to its security and a world at peace
integrity.

Achievement domain The need to develop and use skills to Capable, ambitious and social
obtain from the physical and social recognition
environment those resources required
to thrive.

Self direction domain Intrinsic desire to explore and Autonomy, self-sufficiency,

understand reality and to experience independence, and intellectualism;
themselves as effectively controlling imaginative (daring creative)
events…

Restrictive-conformity Individuals need to restrain unruly Obedient, polite, clean and self-
domain impulses and inhibit actions that might controlled
hurt others’ interest.

Prosocial domain A positive, active concern for the Altruism, benevolence, kindness, or
welfare of others .. love; helpful, forgiving, loving and
equality.

Social power domain Needs for dominance, status, influence, Power, leadership, and authority
social control or power
Dimension Description (Updated)

POWER DISTANCE INDEX The degree to which the less powerful members of a society accept and expect that power
(PDI) is distributed unequally.
How a society handles inequalities among people.

INDIVIDUALISM VERSUS Loosely-knit social framework (individuals are expected to take care of only themselves
COLLECTIVISM (IDV) and their immediate families) versus tightly-knit framework (individuals can expect their
relatives or members of a particular ingroup to look after them in exchange for
unquestioning loyalty).
People’s self-image is defined in terms of “I” or “we.”

MASCULINITY VERSUS A preference in society for achievement, heroism, assertiveness, and material rewards for
FEMININITY (MAS) success versus a preference for cooperation, modesty, caring for the weak and quality of
life.
In the business context: “tough versus tender” cultures.

UNCERTAINTY AVOIDANCE The degree to which the members of a society feel uncomfortable with uncertainty and
INDEX (UAI) ambiguity.
Should we try to control the future or just let it happen?

LONG TERM ORIENTATION Maintain some links with its own past while dealing with the challenges of the present and
VERSUS SHORT TERM the future. Societies prioritize these two existential goals differently.
NORMATIVE ORIENTATION Future focus versus maintaining time-honoured traditions.
(LTO) In the business context, this dimension is referred to as “(short-term) normative versus
(long-term) pragmatic” (PRA).

INDULGENCE VERSUS Relatively free gratification of natural human drives related to enjoying life and “having
RESTRAINT (IND) fun” versus suppressing gratification of needs through strict social norms.
 Cultural values
Conservatism A cultural emphasis on maintenance of the status quo, propriety, and restraint of
actions or inclinations that might disrupt the solidary group or the traditional order
(social order, respect for tradition, family security, wisdom).
Autonomy Intellectual Autonomy: A cultural emphasis on the desirability of individuals
independently pursuing their own ideas and intellectual directions (curiosity,
broadmindedness, creativity). Affective Autonomy: A cultural emphasis on the
desirability of individuals independently pursuing affectively positive experience
(pleasure, exciting life, varied life).
Hierarchy A cultural emphasis on the legitimacy of an unequal distribution of power, roles
and resources (social power, authority, humility, wealth)
Egalitarianism Egalitarianism: A cultural emphasis on transcendence of selfish interests in favour
of voluntary commitment to promoting the welfare of others (equality, social
justice, freedom, responsibility, honesty).
Mastery Mastery: A cultural emphasis on getting ahead through active self-assertion
(ambition, success, daring, competence).
Harmony Harmony: A cultural emphasis on fitting harmoniously into the
environment (unity with nature, protecting the environment, world of
beauty).
Hofstede’s Cultural Value Dimensions…
Dimension Description

individualism- The degree to which people in a country prefer to act as individuals rather than as
collectivism members of groups” (Hofstede, 1994, p. 6). [1980]
The degree of interdependence a society remains among its members.
power distance “the extent to which a society accepts the fact that power in institutions and
organizations is distributed unequally” (Hofstede, 1980b, p. 45). [1980]
uncertainty avoidance “the extent to which a society feels threatened by uncertain and ambiguous
situations and tries to avoid these situations by providing greater career stability,
establishing more formal rules, not tolerating deviant ideas and behaviors, and
believing in absolute truths and the attainment of expertise” (1980b, p. 45). [1980]
masculinity-femininity “the extent to which the dominant values in society are „masculine‟ – that is,
assertiveness, the acquisition of money and things” (Hofstede, 1980b, p. 46) and
femininity defined as the opposite of masculinity – that is, dominance of such
feminine values as “preference friendly atmosphere, position security, physical
conditions, [and] cooperation” (Hofstede, 2001, p. 281). [1980]
The society will be driven by competition, achievements and success.
Time perspective: long- Long-term orientation refers to future-oriented values like persistence and thrift,
versus short-term while a short-term orientation refers to past- and present-oriented values like
orientation). respect for tradition and fulfilling social obligations. [1988]

Indulgence –restraints Allowing gratification of basic drives related to enjoying life and having fun vs.
regulating it through strict social norms. The extent to which people control their
desires and impulses.
Values, traits, attitudes, beliefs and norms
value

Traits Traits are tendencies to show consistent patterns of thought, feelings, people who exhibit a trait
and actions across time and situations. may not value the
corresponding goal and
those lacking a trait may
value the corresponding
goal highly.
Attitudes Attitudes are evaluations of objects as good or bad, desirable or Values underlie our
undesirable. Attitudes can evaluate people, behaviors, events, or any attitudes; they are the
object, whether specific (ice cream) or abstract (progress). basis for our evaluations.
Beliefs Beliefs are ideas about how true it is that things are related in
particular ways. General beliefs that people hold about how the world
functions are called social axioms (Leung & Bond, 2004).
Norms Norms are standards or rules that tell members of a group or society Our values affect whether
how they should behave. we accept or reject
particular norms.
Customer value in marketing
- Value is the consumer's overall assessment of the utility of a product based on perceptions
of what is received and what is given. (Zeithaml 1988, p. 14)
- Value in business markets [is] the perceived worth in monetary units of the set of economic,
technical, service and social benefits received by a customer firm in exchange for the price
paid for a product, taking into consideration the available suppliers' offerings and prices.
(Anderson, Jain, and Chintagunta 1993, p. 5)
- Buyers' perceptions of value represent a tradeoff between the quality or benefits they
perceive in the product relative to the sacrifice they perceive by paying the price. (Monroe
I990, p. 46)
- Customer value is market perceived quality adjusted for the relative price of your product.
(Gale 1994, p. xiv)
- By customer value, we mean the emotional bond established between a customer and a
producer after the customer has used a salient product or service produced by that supplier
and found the product to provide an added value. (Butz and Goodstein 1996, p. 63)
- Customer value is a customer's perceived preference for and evaluation of those product
attributes, attribute performances, and consequences arising from use that facilitate (or
block) achieving the customer's goals and purposes in use situations (Woodruff, 1997,
p.142).
- Holbrook (1999) defines customer value as ‘‘an interactive relativistic [comparative, personal,
and situational], preference and experience’’ (2005, p. 46). [axiology] A result of
assessment/judgement of the offering conducted against the evaluative criteria in terms of
the fulfilment of values (Holbrook, 1999).
Fundamental characteristics of customer value
Characteristics Description
Interactive Involves an interaction/relationship between a subject and an object
(e.g. a product, service, store, technology, activity)
A trade off A trade off between the benefits and costs of an object
Relativistic It reflects a comparison of one object with another; it differs between
one person and next
Situational Depends on the situation in which the evaluation occurs.
Personal It is subjectively determined by the customer
A preference Embodies a preference
Experiential Not inherent in an object, but in the customer’s experience derived
from the object
Multidimensional Multidimensional and consists of multiple value types

Co-created co-created by the customer by means of resource integration

(Source: Leroi-Werelds, 2019; Holbrooks, 2005)

• Value proposition
The sum total of all benefits a seller’s offering
delivering to a target customer.
Three types of value proposition elements are:
- Point of parity: elements that are the same as the best alternative;
elements that are mandatory for a brand to be considered a
legitimate competitor in its specific category.
- Points of differentiation: elements that makes your brand unique,
i.e. elements that are superior or inferior to the next best
alternatives; what makes your brand unique
- Points of contention: elements which the buyer and the seller
disagree on to the value; what people argue over