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Marketing 101: Customer Perceived Value
Categories: Marketing 101

Benefits

  • Product: At the time of its release, Star Wars was one of the most innovative movies made. It was ground-breaking in its use of special effects, unconventional editing, and science fiction/fantasy storytelling.
    Though it was mistaken for a kiddie flick in its production stage, promotions helped in overturning that perception to an extent. After that, strong word of mouth helped its ticket sales.
    Audiences experienced not just unparalleled visuals, but also witnessed hitherto unseen worlds. “A long time ago in a galaxy far, far away,” indeed.
  • Image: Soon after its release, Star Wars became the new ‘it’ thing. People who hadn’t seen it were forced to watch it because of peer pressure. There was a certain prestige attached with having seen the movie.
    Even to this day, Star Wars as a brand evokes much critical and fan love. It’s been a regular feature of must-watch movie lists (like the AFI movie list). The logo is instantly recognizable.
Star Wars Logo
The iconic Star Wars logo

Costs

  • Monetary: Ticket price.
  • Time & Energy: Movies, in those days, were viewed in the cinema, and not at home. So these two costs often tilted the balance.
    Time refers to the time spent acquiring the ticket, and then watching the movie. One also needs to factor in the time spent commuting.
    Energy refers to the effort taken in actually going to the hall.
  • Perceived risks: Questions about the unknown. Especially, about the quality of the film. Questions like, “Is it entertaining enough?”, “Will I understand it?”, “I hope it isn’t too mature for my children” (or conversely, “I hope it isn’t too kiddish for me”).

A purchase decision is made only when the perceived benefits outweigh the perceived costs. The consumer has to benefit from the transaction, after all.
In the case of Star Wars, innovators and early adopters got more influenced by the product benefits, while the laggards only experienced the movie when the image benefit (especially peer group ridicule) ended up outweighing any reservations they might have had.