The Consumer Value Framework and Its Components

As outlined in the textbook, the consumer value framework (CVF) is a consumer behavior theory that determines the value associated with consumption. All of the elements in the model are related and consist of the following elements:

Table 1.1. Components of the Consumer Value Framework

Internal influences	External influences	Consumption process	Value	Relationship quality
Consumer psychology Learning Perception Implicit memory Information processing Memory Categorization Attitudes Personality of consumer Motivation Personal values Personality Lifestyle Emotional expressiveness	Social environment Acculturation/enculturation Culture and cultural values Reference groups Social class Family influence Situational influences Atmospherics Time/timing Conditions	Needs Wants Exchange Costs and benefits Reactions	Utilitarian Hedonic	CS/D Switching behavior Customer share Customer commitment

^{Source: Adapted from Babin & Harris (2011)}

Customer Relationship Management

A term used to describe this relationship that has gained popularity over the years is customer relationship management (CRM). According to strategic marketing experts Cravens and Piercy (2012), “CRM aims to increase the value of a company’s customer base by developing better relationships with customers and retaining their business. CRM can play a vital role in market targeting and positioning strategies. Since CRM is an enterprise-spanning initiative, it needs to be carefully integrated with marketing strategy." As such, internal infrastructures like policy and operations must support and enhance all customer touchpoints to build and maintain quality relationships.

Your textbook describes relationship quality as "the connectedness between a consumer and a retailer, brand, or service provider." 
 

The Consumption Process

The consumption process contains many factors, which can be divided into internal, external, and situational influences.

Internal Influences: The Psychology and Personality of the Consumer

Watch the following video about the psychology of consumer behavior.

Video 1.3. Psychology of Consumer Behavior

Some points from the video include the following:

• Learning, perception, memory, attitudes, and group behavior are used by marketers to influence buying decisions.
• Perceptions from marketers and consumers affect buying behavior.
• Possessions influence the way we feel about ourselves and others.

Internal influences constitute the psychology of the consumer. For example, how will customers react to a price increase from $30 to $50? Does it matter whether an item is priced at $29.99 or $30.00? The psychology of the consumer involves both cognition and affect.

Individual differences are the traits, including personality and lifestyle differences, that help determine consumer behavior. This is the personality of the consumer. So a consumer with a serious personality may enjoy spending time in the library in comparison to the outgoing person who can’t sit still. Thus, internal influences consist of the following:

1. Psychology of the consumer
   • Cognition: how consumers process and store stimuli and information that then becomes knowledge
   • Affect: how consumers feel when experiencing activities, including those associated with consumption.
2. Personality of the consumer
   • Individual differences: include things like personality and lifestyles

Social Environment and Situational Influences

Have you ever wondered why consumers have such varied tastes in clothes? Those tastes are “fed” by external influences, which include consumers’ social and cultural environment.

• The social environment refers to the people and groups who shape consumers’ attitudes and beliefs. For example, the clothes we purchase could be shaped by our families, our friends or coworkers, or even groups of which we aspire to be a part (green consumers or affluent consumers, for example).
• Your textbook describes situational influences as those that "include the effect that the physical environment has on consumer behavior." For example, some people choose their clothes only from stores that have a “cool” vibe, like specialized boutiques or maybe Abercrombie and Fitch, whose stores offer music, scents, and lighting that some consumer markets find exciting (Khan, 2014). Other consumers may like the situational atmosphere of a high-end department store where personalized attention is provided by the sales staff.

 

Value and Two Basic Types of Value

Table 1.2. What You Get Versus What You Give

What you get	What you give
Benefits Quality Convenience Emotions Prestige Experience Other factors Scarcity Nostalgia	Sacrifices Time Money Effort Opportunity Emotion Image

^{Source: Adapted from Babin & Harris (2015)}

Your textbook describes value as "a personal assessment of the net worth obtained from an activity." Consumers are never willing to sacrifice value, but they are often willing to sacrifice one or more of its components in the name of value. Another way to look at value is as a balance of price (in money, time, and/or effort), quality, and satisfaction. For example, on one day a consumer may dine at their favorite restaurant and pay more in money and time to do it because its value—a reward after a hard week at work or school, or time spent with a good friend—is "worth it.” On another day, this same consumer may sacrifice the satisfaction of service and ambience for a less expensive restaurant, because they really just need a decent meal and don't feel like cooking. Finally, perhaps on another day, they are willing to sacrifice virtually all quality and culinary satisfaction by driving through a fast-food restaurant because they have barely enough time to eat between work and their child’s sporting event. A way of quantifying this value is through the value equation. Think of it as a formula:

Figure 1.4. Value Formula

Value = (What you get) minus (What you give)

• What can a consumer get? Quality, convenience, prestige, and nostalgia to name a few. For Ahmed, when he bought his car, he got freedom, great gas mileage, and the ability to travel to college.
• What can a consumer give? Time, money, and/or effort are most often the price consumers pay. For Ahmed, this was the time he took to research cars, go to the car lot, and pay for the car.

The value that each individual consumer places on an activity or product, including purchases, is derived from motivations that manifest themselves in needs and desires. In order to better understand the concept, let’s look at the types of value that result in motivations, needs, and desires.

Types of Value

Utilitarian value is a value assigned to something designed to help complete a task. An example of utilitarian value is the value Ahmed receives by having the ability to drive from one place to the next in his new car.

Hedonic value is the immediate, usually emotional, gratification as a result of a product or activity. An example of hedonic value is the value that Ahmed receives from the fun experiences he enjoys while driving his car.

It should be noted that consumers can derive both a utilitarian and a hedonic value from the same experience. For example, if you buy a blender to make smoothies, then the utilitarian value you get is simply that it performs the task you intend: the blending of food into a smoothie. If you want that smoothie to lose weight, bulk up, or regularly eat breakfast on the go, then the emotional satisfaction you get from working toward that goal is the hedonic value.