Consumers' formation of expected value

Although the axiological value dimensions are very beneficial in classifying the possible costs and benefits, they are rather abstract and do not show how consumers form judgments of expected value. Past research also tried to explain how consumers form value expectations of buying and using their products (cf. Woodruff 1997; Zeithaml 1988). Consumers are expected to purchase their products in order to help attaining their end goals or human values, such as quality in life, world at peace, and social recognition (cf. Rokeach 1973). Consumers form expectations of value based on lower-level abstractions in a means-end way: concrete attributes are the means to achieve the more abstract consequences, which are used to achieve the human values or end goals (cf. Howard 1977; Gutman 1982; Woodruff 1997; Zeithaml 1988).

Customer value hierarchy model

Figure 8 Customer value hierarchy model (woodruff 1997)**


Figure 8 shows that goals are organized hierarchically with the consumer's end goals or human values at the highest level, the consequences in the middle, and product attributes at the lowest level (Parasuraman 1997; Woodruff 1997). Attributes are the concrete descriptions that show what the product entails/possesses. Consequences refer to the outcomes from these product attributes. These outcomes refer to what the product or object can do for the consumer; they can be both negative and positive (Woodruff and Gardial 1996). Values refer to the most abstract end goals or human values, and are linked with the consequences. Consumers have their own personalized set of human values, which guide them in their daily shopping behavior (Rokeach 1973; Woodall 2003). For instance, a consumer that scores high on being kind to the environment may refrain from buying a particular brand that is harmful to the environment.

The studies of Woodruff (1997) and Zeithaml (1988) concentrate on the formation of value for products. In accordance with this means-end approach that explains how consumers evaluate products in terms of value, consumers also link lower-level store attributes (e.g. opening hours, navigation perceptions, information availability) to more abstract consequences such as service quality, merchandise quality, and perceptions of value (cf. Baker et al. 2002; Kerin, Jain and Howard 1992). These consequences refer to the perceived costs and benefits of shopping online or offline, and may help consumers attain their personalized set of human values. The next section tries to classify the main costs and benefits consumers consider when purchasing.

**Although perceived quality and perceived value both belong to the desired consequences, perceived value is considered to have a higher abstraction level than perceived quality (Zeithaml 1988). Multiple levels of abstractions may exist within each of the three stages; the basic idea remains that consumers organize information in a hierarchical manner.