2.1.5.1 Four types of value

Woodall (2003) reviewed the extensive literature on perceived value, or as he calls it ‘value for the customer.’ He used a historical perspective to describe how value has been treated in the fields of economics and philosophy. He distinguished four types of value;

1. Intrinsic value,
2. Exchange value,
3. Use value,
4. Utilitarian value.

Based on whether the value assessment is subject-based or object-based (i.e. individual vs. collective), and on whether value should be seen in light of market characteristics and/or consumer sacrifices.

Intrinsic value

Intrinsic value refers to the objective-based value that resides within the product, independent from market circumstances. This objective value assessment is made when people analyze the intrinsic product characteristics before, or during use. In this respect, Frondizi (1971) argued that all objects have ‘qualities’ but if a quality is not valued, then it remains a quality. If it is valued, then it becomes an intrinsic value.

Exchange value

Exchange value is also object-based, but influenced by market circumstances. For example, people attribute value to oil through an economic constant, which largely depends on the market circumstances (e.g. scarcity).

Use value

Use value is subjective-based and is perceived as individuals evaluate the product during, or just after use. It is associated with the rewards persons individually derive from using the product, and is thus highly subjective.

Utilitarian value

Finally, utilitarian value is also subject-based, but now refers to the point when intrinsic value and/or use value are compared with the sacrifice the person made in order to experience those forms of value. According to Woodall (2003), the utilitarian approach is to balance ‘all the good and the bad.’ Here value is seen as the outcome of a personal comparison of sacrifices and benefits, an outcome that is essentially utilitarian in nature. The utilitarian approach assumes that the value derived by one individual is likely to be different from the value derived by another, because of the personal attribution of value. Value is here solely determined by the individual consumer (Woodruff 1997; Holbrook 1999), and only exists on the consumers’ terms (Piercy 1997).

Figure 7 shows Woodall’s (2003) conceptual model, which represents the different types of values and the impact of human values on these types of value. It is assumed that human values (e.g. quality of life, belongingness) guide consumers in their daily decision making by affecting the criteria by which value judgments are made. As such, human values are seen as influencers of value (Woodall 2003). The four types of value illustrate the diversity in meanings of value, and the difficulty of conceptualizing the concept of value (cf. Zeithaml 1988). Woodall complicates the issue of what constitutes value by arguing that “value is neither use, nor exchange; it is neither object-based, nor subject-based; it is neither my view, nor your view, it is all of these things.” He proposes that the types of value may play a more (less) substantial role in the formation of value, according to the situation itself and the individual consumer’s value system.

Figure 7 Intrinsic, exchange, use and utilitarian value.