Demand-side perspective on value creation: Beyond the value-price-cost framework
Demand-side perspective on value creation: Beyond the value-price-cost framework

Summary/Abstract: The concepts of value and value creation are fundamental to economic sciences. Despite their pivotal role, consensus on the meaning and nature of value is conspicuously lacking, and our understanding of value creation processes remains limited. Traditionally, value creation has been conceptualized as an exclusively supply- side phenomenon. The paper sheds new light on the nature of value by taking the demand-side perspective on value creation and building on it to include insights derived from cultural studies. It proposes that value resides in three locations – the product, the individual consumer, and the culturally constituted world. This proposition is relevant for both supply-side and demand-side views on value creation. On the one hand, it is highly consequential for innovation and market development strategies (and relevant literatures) as it recognizes market development capacity of culture, which should not be overlooked in times of accelerated social and technological change. On the other, it enriches and complements experiential and means-end (i.e. demand-side) perspectives on value creation by adding a new and powerful factor affecting consumer choices, experiences and their evaluation. As such, it can contribute to the theory of consumption, should one emerge.

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