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Factors Affecting Perceived Value of Customer in Logistics Companies

Paper Type: Free Assignment Study Level: University / Undergraduate
Wordcount: 2747 words Published: 26th Oct 2020

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Background of the study

Since 2001, especially after Vietnam joined the WTO, the logistics services market in Vietnam has many positive changes with an enormous number of enterprises operating in the rapidly developing field of Logistics at a high rate of growth. Quantity, quality, time and the price of the service are used to be seen as significant factors to a logistics company ‘s success. However, this seems to change due to the appearance of many new theories.

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Recently, customer perceived value has become an interested and highly regarded element by researchers and scholar whereas everybody can see its benefits in forecasting customer buying behavior and gaining competitive advantages. There has been many studies conducted to get a better look in Customer perceived value thus many models are created in this matter. Although previous studies addressed many sectors, no research in customer perceived value to Logistics service in Vietnam has been found whereas a need to increase this perceived value was highly raised in Vietnamese logistics companies. Therefore, Huber & partners  asserted that creating a better customer perceived value is a key factor in ensuring a company‘s success(Huber, Herrmann and Morgan 2001). Thus, in the current increasingly competitive logistics services market with the participation of new competitors, customer perceived value appears to be a key issue for a logistics company to elevate competitive on the market. Stemming from the fact, I chose the research topic “Analytics on the factors affecting the Perceived value of customer to the services of logistics companies in Vietnam”.

Objective of the study

  • The topic focuses on measuring the perceived value of customer (export-import companies) for Logistics service by measuring factors that are likely to affect the perceived value of the customer.
  • Build and test the factors that affect the perceived value of the customer in Logistics service, from then the author can evaluate the importance of these factors.
  • From the results of the study, the authors proposed recommendations and suggested solutions to maintain and improve the ability to attract customers.

Necessity of the research

In the past and to the present in Vietnam, the number of research topics about customer perceived value is very little. Among these researches, most are aiming to study about certain type of products. Based on that reason, this study can bring freshness by having a more thorough look into service section: Logistics service.

Moreover, this is aimed to be a survey-based study so it will be able to reveal a few patterns in customer habit. Thus, the study benefits Logistics company with competitiveness in this rising market.


This study is based on the compilation of articles from numerous sources, such as: Curtin library database, emerald insight (webpage), researhgate.net…These articles are assembled following the search terms: Customer behavior, customer perceived value, logistics, perceived value on logistics service, research model on customer perceived value.

Most of the previous study on customer perceived value are focused on tangible product aspect. Thus, many ideals are not included in this paper. The articles that are handled in this study are exercised in mainly service industry.


Logistics service in Vietnam

Vietnam currently has 1,300 enterprises, including foreign-invested enterprises, operating in this field. Domestic companies only account for 25% of the market share while foreign companies, only 5% of the total number, account for the remaining 75%. According to a survey, logistics is one of the fastest growing industries in many countries in the world. In Vietnam, according to official information released by the government, the average growth rate of logistics services is 25% per year, and in fact, there are many companies that are growing at a rapid pace.

In Viet Nam, Logistics is defined as commercial activities whereby traders organize one or more jobs including receiving, transportation, storage, customs clearance, paperwork, packing, marking, delivery or other services related to the goods as agreed with the customer for compensation.

Generally, logistics operations are categorized as following:

-          Supply Chain Management Logistics Service.

-          Transportation Management Logistics Service.

-          Warehousing Inventory Management Logistics Service.

Finally, logistic service is a perfect tool to help companies manage their business better and especially those that want to expand their market to other countries.

Since Logistics service covers a huge amount of activities in business term. In this study, the author will approach these logistics company in field of transportation as in import-export industry.

Customer perceived value 

Strong development of market at the 20th century with mass-organizations, enterprise draws its first breath in more and more severe competition, customers are increasingly interested in. Thus, the concept of “customer perceived value” has been focused by researchers all over the world due to its recognized role as the source of competitive advantage, and business success (Patterson and Spreng, 1997; Woodruff, 1997). So in what way value is recognized, Patterson and Spreng argue that value is an abstract concept with meanings that vary by context (Patterson and Spreng 1997). According to Zeithaml ‘s study, responses categorize value definition into four groups:

  • Value is low price
  • Value is whatever I want in a product.
  • Value is the quality I get for the price I pay
  • Value is what I get for what I give.

Following on these results, Zeithaml came up with the definition of perceived value: “Perceived value is the consumer’s overall assessment of the utility of a product based on perceptions of what is received and what is given”(Zeithaml 1988). This is considered to be the most commonly accepted definition of perceived value.

Since perceived value are evolved according to changes in consumer’s behavior, different definitions of perceived value seem to display a variety of meanings. To acknowledge customers perceived value from two aspects, three group of researchers have three different approaches, Cravens and Piercy argue that perceived value consists of “the benefits and costs resulting from the purchase and use of products”(Piercy, Cravens and Lane 2003). On the other hand, lglesias and Guillen, proposes their own version: “an exchange of what is received and what is given”(Pedraja Iglesias and Jesus Yagüe Guillén 2004). Lastly, Keller states that “consumers combine quality perception with cost perception to arrive at an assessment of the perceived value”(Keller, Parameswaran and Jacob 2011).

To understand more thoroughly about customer perceived value, we can approach it from two distinctive perspectives: benefits and costs, clients’ feeling about service.

Perceived value: Benefits and costs incurred:

+ Monroe considered customer perceived value as the exchange value between the benefit which customer receive in a product compare to the price they have to pay for it (Monroe 1990).

+ Ulaga & Chacour determines the overall customer rating of product utility based on perceptions of what is received and what is offered (Ulaga and Chacour 2001).

+ The perceived value is measured in the monetary unit of a set of economic, technical and social services received by the. This is taken in comparison with the price paid as the offered price from the supplier (Anderson and Sullivan 1993). In this definition, the monetary cost is is believed to affect consumer perception significantly.

+ Slater and Narver come to a much simpler definition. In their study, customer perceive value is the result of benefits minus costs. Moreover, they stated that customer perceived value is created when the benefits that a consumer gains from a product or service are greater than the long term costs a customer is expected to pay for it (Slater and Narver 2000).

+ Nilson suggests the definition of customer perceived value is that they compare the tangible and intangible benefits of the product with the total cost of using the product (Nilson 1992). This shows that consumers only notice positive things and the cost here is the cost of money.

Perceived value: client's feeling about service:

+ According to Butz & Goodstein, with perceived value of the customer, if an added value is introduced after the customer has experienced a product or service, it will constitute emotional relationship between customer and supplier (Butz Jr and Goodstein 1996).

+ Woodruff proposes that customer perceived value is a customer perceived preference and assessment of utility, features and performance coming from the product that help customers to fulfill their objective (Woodruff 1997). This concept combines the desired value and customer reviews to define the concept of customer perceived value.

Perceived value always changes, it is different between customers, culture, time (Sanchez et al. 2006). Although there are many different concepts but there are some common concepts about customer perceived value:

  • There is a unified certainty that perceived value is a subjective concept with each individual rather than that is identified in an objective way by seller.
  • In addition, perceived value is comparison between what customer received (benefit) and what they are paid (sacrifice) to get product or services.

There are also different points in definition about perceived value:

  • There is a difference about positive factors (benefits) and negative factors (costs) of perceived value. In which quality of the product is on top of the list in positive factors while price, time, effort and cost of psychological is introduced regularly in negative factors.
  • There are many different views in standpoint about nature emotions – awareness of value.

Factors affecting customers perceived value

Customer perceived value is mostly seen as a tradeoff between benefit components and sacrifice components. Customers perceived value equal benefit components subtract sacrifice components. Other researchers think perceived value is not only one simple subtraction. According to them, perceived value is affected by many factors and these factors may have impact on each other, so far this argumentation is recognized by many researchers. This study also stands on school of multidimensional structure to study customer perceived value with Logistics service.

Categorizing factors affecting customer perceived value

Customer perceived value is defined in many ways depending on the context. However, there seem to be only one promising approach, customer perceived value is simply the tradeoff between benefit components and sacrifice components. Factors affecting customer perceived value often fall into  two components: sacrifice and benefit (Sanchez et al. 2006).

Benefit Components:

  • Economic benefits: monetary savings when customer purchase services.
  • Emotional benefits: added value gained by consumer after purchasing product or service.
  • Social Benefits: consumer prefer service as it is recommended by others.
  • Relationship benefits: a state when consumers consider service providers as reliable source that always comes up to their expectation.

Sacrifice Components:

  • Price sacrifices: monetary costs as perceived by consumer.
  • Time sacrifices: the amount of time consumer have to spend in the process of receiving service.
  • Effort sacrifices: involves the physical energy consumer use to navigate around the process of acquiring service.
  • Risk: probability of negative outcome of purchasing a service.


Definition of customer perceived value

In conclusion, customer perceived value is comprehended as the disparity between benefit components and sacrifice components. Total benefit components are benefit that consumers expect in product or service. Total sacrifice components are cost customers pay in said  products or services. Moreover, perceived value is different with each person regarding the same product or service. Each person has different living situation, seeing differently about impacts and cost that they pay for the product or services. Moreover, customers evaluate differently about the same product and service. Many manufacturers believe that when they spawn a quality product or service with reasonable prices, consumer will choose to buy. However, a product or service is good only when customers rate it good, good price is only interested when customers think it matches the benefit that they are received when they use the product or service.

Limitations of the research

Since this study is aimed to be a quantitative research, there may be a lot of limitations need to be considered for this reason:

  • A limit time and poor conditions (data gathering process) that make the study limited. The analysis results are therefore not generalized.
  • The study was only based on customers who using logistics service of export and import companies, so it is hard to demonstrate every aspect in logistics service.


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