The difference between the perceived benefits gained by a customer who purchases a firm's products or services and the full economic cost of these products or services is the (Note: Porter was deleted from this edition)
A) value proposition.
B) cost advantage.
C) economic value.
D) competitive advantage.

Question

Quizplus · Accepted Answer

Economic value is the difference between the perceived benefits of a product or service and its cost. It is the amount that a customer is willing to pay for a product given the benefits he or she perceives from it. This economic value can be used as a basis for creating a value proposition or competitive advantage, but it is not the same as those concepts themselves. Cost advantage is a type of competitive advantage that arises when a firm is able to produce a product or service at a lower cost than its competitors, while a value proposition is a promise to deliver a particular set of benefits to customers.

The Difference Between the Perceived Benefits Gained by a Customer