intangible value

When determining the value of a good or service a consumer compares the total benefits with the total costs of the product. These costs and benefits are either of a tangible or an intangible nature (Kotler & Keller, 2012). From this it follows that the value of a good or service is also either tangible of intangible. The tangible value can be determined from the attributes of the product, such as its performance and durability. On the other hand, the intangible value is the added value of products and services due to, for instance, their appearance, comfort and safety (Palmroth, 1991). The intangible value of products might be the reason why people in a rich and affluent society tend to spend huge amounts on luxury goods and services, while these products do not always seem to have superior performance. Therefore, one could argue that in a prosperous society, value is predominantly of an intangible nature.

Firstly, consumers buy the products of which they believe that will offer them the highest value (Kotler & Keller, 2012). However, these consumers cannot know before purchase what a product is exactly going to offer them. Therefore, consumers have to rely on promises of the selling company. These promises are invariably more than the tangible products themselves, focusing on the intangible benefits attached to the product rather than its distinctive features. In other words, the company concentrates its marketing activities on the intangible value of the product. In that way the company is able to get customer appeal for its products, and differentiate from its competitors (Levitt, 1981). Logically, because the intangible value is the main focus point of companies and of consumers in their purchase decisions, value has to be pre...

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