Customer's mental process of judging value:
1. The customer assigns weight age for each benefit; different benefits gain different weight age, depending on the priority assigned to them by him.
2. The total weight thus assigns to a given product offer, indicates the total value that the customer attributes to it. It is also called the total customer value. It represents his personal estimate of the total benefits he would gain from the product.
3. Now the cost of securing the product. Price of the product is just one element of the cost (through the major element) to the customer. For the firm, the price is fixes may cover all its costs or most of it, but for the customer, over and above the price, several other costs are to be reckoned. He may have to place an order for the product and wait, the after sales service location may be far off the service cost may be high and the spares may be difficult to get. The customer allocates a cost of the each such item. The price of the product plus all such incidence of costs make up the total cost for the customer. It is called the total customer cost.
4. Total customer value minus total costumer cost is the delivered value to the customer; it is termed as customer delivered value. It is the customer's net value gained from the transaction. Lesser the cost for the customer It is the delivered value for him.
5. For the same product offer, different customers arrive at different estimates of the value. In the matter of the cost too. The estimates of the customers differ. This is what makes the market's task challenging.