Question

We have discussed 5 different types of economic value in class. Please give a personal example of each type of value based on your life experiences over winter holidays. Which of the 5 values can be observed in markets? How can we reflect our values for the things you listed that are not observed in markets?

Answer 1

Economic Value is the maximum price a person is willing to pay for the product, service, experience or any materialistic asset.

There are five different types of economic value as :

• Quality of Life : Materialistic or Non-materialistic things purchased by an individual to improve the quality of his life. For instance, in order to go for winter holidays, a person might purchase new dresses, good quality camera, choose a good hotel to stay in. Such things ar being purchased to improve the quality of life.
• Experiences : In order to get a good experience, high amount is being paid by the individual. For instance, people pay hefty amount to have a good experience by spending winter holidays in Switzerland or in an Amusement park at Universal Studio in Singapore.
• Brand Value : Few brands are well recognized and have a good image in the eyes of the customer. Such expensive brands are being used by the customer. For instance, Mariott Hotels has high brand value in the eyes of the customer. A customer pays heavy amount to spend his winter holidays in Radisson Hotels.
• Information : A customer pays money to get the information about best tourist destinations, place of stay and main tourist attractions while going for a holiday.
• Safety : Safety is also an important issue. While on winter holidays, a person hires a safe car such as Volvo, take a safe bus and safe hotel and pay heavy amount.

5 Values which are observed in markets :

• Consumer goods
• Brand Value
• Capital
• Assets
• Information

In the market, Service industry such as Salon, Hotels, and Doctor's clinic tangible consumer goods cannot be seen or observed. So in order to provide tangibility , they provide an experience. A theme based restaurant, music being played in the salon and doctor displaying his experience certificate, awards and degrees can offer an experience to the customer and help him in taking appropriate decision of spending his money. A customer is ready to pay high amount in a five star Branded hotel because of the Brand Image it has in the eyes of the customer.