Perceived Value

5.2.1.5. Perceived Value

  In relation to the manifest variables, it is also important to review the dependent variable perceived value. It will be determined whether the variable perceived value is included in the conceptual model or should be left out. Customer expectations and customer perceived quality leads to the customer perceived value. 112

  5.2.1.5.1. Definition Perceived value relates to the value the customer experiences through the interaction with the company and its product. The consumer will compare the actual experience with the product e.g. if the perceived quality is lower than expected the consumer will be dissatisfied, and vice versa. 113 Value represents the tradeoff of the main give- and get-components. Zeithaml defines perceived value as the following:

  “Perceived value is the customer’s overall assessment of the utility of a product based on

  perceptions of what is received and what is given”. 114

  Value is very individual and the sacrifice components of perceived value can be divided into monetary and non-monetary (e.g. time and effort). 115 When the topic is WLNs, monetary sacrifice is not an issue. Since the WLN is free of charge and delivered to the door, it is mostly time that serves as the non-monetary sacrifice. It can be argued that the individual person’s preferences determine the level of perceived value. What the reader expects to receive from the WLN, compared to the time and effort the reader puts into reading the paper, is the perceived value.

  112 Martensen, Anne et al. (1998) Working Paper, pp. 30-31 113 Martensen, Anne et al. (1998) Working Paper, p. 31 114 Zeithaml, Valarie A. (1988) , p. 13 115 Rust, Ronald et al. (2004), page 268

  Consumers today are more willing to spend money than they are willing to spend time. A busy everyday life and a good economy make time a more scarce resource than money. 116 It is thereby anticipated that the attributes of the WLN contributes value to the reader, since the reader is willing to spend valuable time on getting updated on community matters.

  5.2.1.5.2. Empirical Research Disconfirmation of Expectations is the most common theory within customer satisfaction and it concerns the customers’ expectations and the perceived quality. Fornell states that when the expectations are held against the quality, the perceived value occurs. 117 The customer’s total experience with a product and the utility of the product is what determines the perceived value and in many cases the value is created from the connection between price and quality. The higher the quality, the higher the value is. But all in all, it is the individual customer’s preferences that determine if it is of high or low value. 118 However, it is according to Rust et al. more than just about value for money, value also concerns expectations (do the customer get the expected), quality and convenience (do the customer receive value in relation to the time they sacrifice). 119 This is linked to Zeithaml’s theory about give- and get- components, which is not only focused on money but also on non-monetary elements. 120

  Customer satisfaction is dependent on value and if the customer experiences value, it will lead to satisfaction. In many incidents satisfaction is dependent on the link between quality and price. 121 Creating value for the customers is the foundation for every successful business and Reichheld states that:

  “Creating value for customers builds loyalty, and loyalty in turn builds growth, profit, and

  more value” 122 .

  A company earns loyalty by consistently delivering superior value to the costumer, meaning there is a dependent link between perceived value and loyalty.

  Within the literature, it is known that perceived value has a direct effect on satisfaction and loyalty. However, in the literature there has predominantly been focus on value-for-

  116 Zeithaml, Valarie A. (1988), p. 15 117 Martensen, Anne et al. (1998) Working Paper, p. 80 118 Martensen, Anne et al. (1998) Working Paper, pp. 33-34 119 Rust, Ronald, et al. (2004), p. 268 120 Zeithaml, Valarie A. (1988) , p. 13 121 Martensen, Anne et al. (1998) Working Paper, p. 31 122 Quote: Reichheld, Frederick F. (1996), p. 3 116 Zeithaml, Valarie A. (1988), p. 15 117 Martensen, Anne et al. (1998) Working Paper, p. 80 118 Martensen, Anne et al. (1998) Working Paper, pp. 33-34 119 Rust, Ronald, et al. (2004), p. 268 120 Zeithaml, Valarie A. (1988) , p. 13 121 Martensen, Anne et al. (1998) Working Paper, p. 31 122 Quote: Reichheld, Frederick F. (1996), p. 3

  In view of the above definition and the review of preceding research i.a. from authors like Martensen et al. (1998), Zeithalm et al. (1988), and Rust (2004) the following hypotheses are set up for the latent variable perceived value:

  H 4 : There is a positive relationship between perceived value and satisfaction.

  H 5 : There is a positive relationship between perceived value and loyalty.

  5.2.1.5.3. Operationalization Perceived value can hereby be operationalized by the following four questions, in order to test the hypotheses. The research questions will combined indicate the influence that perceived value has on satisfaction and loyalty. See table 2.

  No

  Hypothesis

  Latent Variable

  No

  Research Question

  I keep updated on local matters by reading the

  Perceived

  Q 40 WLN

  H 4 Value → Satisfaction

  Q 41 The content of the WLN fits my needs for information about the local community

  Q 42 The WLN is a decisive factor for me

  H 5 Value →

  Loyalty

  Q 43 The WLN is suitable for me as an information source about the local community

  Table 2