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Customers will buy from the firm that they see as offering the highest perceived
value. Customer perceived value (CPV) is the difference between the prospective
customer’s evaluation of all the benefits and all the costs of an offering and the
perceived alternatives.
An example will help here. Suppose the buyer for a large construction
company wants to buy a tractor from Caterpillar or Komatsu. The
competing salespeople carefully describe their respective offers. The
buyer wants to use the tractor in residential construction work. He would
like the tractor to deliver certain levels of reliability,
durability, performance, and resolve value. He evaluates the tractors and
decides that Caterpillar has a higher product value based on perceived
reliability, durability, performance, and resale value. He also perceives
differences in the accompanying services – delivery, training, and
maintenance – and decides that Caterpillar provides better service and
more knowledgeable and responsive personnel. Finally, he places higher
value on Caterpillar’s corporate image. He adds up all the values from
these four sources – product, services, personnel, and image – and
perceives Caterpillar as delivering greater customer value.