Gloria was excited about finally purchasing a smartphone. She was looking forwar

Question

Gloria was excited about finally purchasing a smartphone. She was looking forward to talking, texting, and looking at pictures from her grandchildren. After talking with a sales representative for two hours, Gloria was frustrated and confused. Even though the price of the smartphone was reasonable, she did not understand all the additional features that the sales representative kept explaining to her, such as gaming, music streaming, and activity trackers. Gloria left the store without a smartphone. (i) Describe the components of the total cost of the smartphone from a customer-perceived value (CPV) perspective and (ii) discuss how they pertain to Gloria.

Explanation / Answer

(i) Customer Perceived Value is the difference between the prospective customer's evaluation of all the benefits and all the costs of an offering and the perceived alternative. Total customer value is the perceived monetory value of the bundle or economic, functional and psychological benefits customers expect from a given market offering. Total customer cost is the bundle of costs customers expect to incur in evaluating, obtaining, using and disposing of the given market offering. Customers usually compare the value that hey derive after using the product or service and end up paying more. During the purchase of smartphones, total cost may differ for different ages. Like young generation may want to buy smartphones with additional features like gaming, chatting, video calling, live music streaming and that too at a less price. So they may look for a smartphone having less price but having many features. Further, old age generation may not like to buy smartphones with additional features as they would not understand the said features. They may not end up purchasing smartphones. ALso, some people may like to buy high end smartphones as it will look good for maintaing their status.

(ii) Gloria's expectations from a smartphone were just talking, texting and looking at pictures from her grandchildren. According to her age, she was not much accustomed to gaming, music streaming and activity trackers. She only wanted to enjoy basic features provided by a smartphone. So, when she went to purchase the smartphone she ended up buying none as the additional features that the sales representative tried to explain her could not be understood by her. She thought that buying such a phone will put unnecessary addtional monetory burden on her. She thought that buying such a phone will be useless as according to her the pricing of the smartphone was too high.

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