CHAPTER 2 LITERATURE REVIEW
2.7 Theories and Concept about Perceived Value (PV)
interpreting the behavior of tourists because of the beauty of the environment or atmosphere (Fiore et al., 2007; Oh et al., 2007). That referred to a good interior, colorful dishes, a sense of harmony, and lovely decoration of the festival’s destination. The esthetic experience includes perceiving, appreciating, and attending to a body-for-itself in terms of fundamentally somewhat products; for example, colorful of the dish, decorations of restaurants, a bottle of wine, or a chair; can be considered as the art objects and valued accordingly. In this common sense, entirely merchandises relate to a particular esthetic dimension in its design, interior, packaging, and environment (Dewey, 2005; Holbrook, 1981; Mintz, 1956).
In conclusion, several reviews are devoted to considering the tourist experience; the concept of experience economy has confirmed the relevance of the tourist’s experiences and is constructed as the framework to understand food tourism.
Furthermore, the experience economy of Pine and Gilmore has been employed and measured in other tourism-related research, especially food tourism. Therefore, this study will apply the experience economy of Pine and Gilmore to the local food festivals.
In the modernity of business management, value refers to a permanent belief about what is appropriate; value may be in the form of ideology and involve decisions daily.
Cravens, Holland, Lamb Jr, and Moncrief III (1988) and Age (1985) supported that value refers to the trade-off or ratio between price and quality that is monetary value conceptualized. While value also defines the customer’s inclusive assessment of the consumption of goods based on what they are received and given onto their perception, she defined it as “get and give” (Zeithaml, 1988). Perception is explained as the state of the processor being attractive mindful of something through the sensation of the consumers (Wolfe et al., 2006). Understanding the value perception as a brand context is key to determining customer motivation in purchasing (Olshavsky, 1985).
Therefore, perceived value is the development of consumer loyalty that can increase the frequency of purchasing or using the service consequently moreover;
perceived value can create a competitive advantage (Ashton, Scott, Solnet, &
Breakey, 2010; Rust & Oliver, 1994). Butz Jr and Goodstein (1996) explained that value is perceived by the customers’ emotions, products, or services after the customers receive them. Therefore, evaluating perceived value is a high individual customer behaviour that depends on the consumers and products. Commonly, the food and service are the essential consideration of the restaurant experience that affects customer perception, restaurant quality, satisfaction, and intentional behaviour (Holbrook & Corfman, 1985). Moreover, Holbrook (1999) described perceived value as an interpersonal relationship and products or services gained from the post- experience using the products or services. Another definition of perceived value will be judged in the comparison stage with the other products by the customers (Carlson, O’Cass, & Ahrholdt, 2015) to this topic, as shown in table 2.6.
Table 2.6 The Development of Perceive Value Studies
Authors, Years Area of Study Value Perception
Dimensions/Approach Sheth, Newman,
and Gross (1991)
Consumption values and market choice
- Conditional value - Emotional value - Functional value - Social value - Epistemic value Groth (1995) Important factors in the sale
and pricing of services.
Management Decision
- Internal - External
- Cognitive: perceived utility - Psychological
De Ruyter, Wetzels, Lemmink, and Mattson (1997)
The dynamics of the service delivery process: A value- based approach
- Logical dimension - Emotional dimension or intrinsic value
- Functional dimension or extrinsic value
Grönroos (1997) Value-driven relational marketing: from products to resources and competencies.
- Emotional (psychological) - Cognitive
Sweemey, Soutrar, and Johnson (1999)
The role of perceived risk in the quality–value
relationship: a study in a retail environment
- Functional value (quality /performance)
- Functional value (value money/
price)
- Functional value (adaptability) - Social value (acceptance) - Emotional value
Sweeney and Soutar (2001)
Consumer perceived value:
The development of a multiple item scale
- Functional value (performance/
quality)
- Emotional value
- Functional value (price/value
Authors, Years Area of Study Value Perception Dimensions/Approach for money)
- Social value (enhancement of social self-concept)
Sanchez, Callarisa, Rodriguez, and Moliner (2006)
Perceived value of the purchase of a tourism product
- Functional value: price - Emotional value - Social value
- Functional value: installations - Functional value:
professionalism
Note: Perceived Value Development
According to table 2.6, to narrate and understand the relationship between perceived value and behavioral intention in tourism, the researcher investigated and reviewed past related studies.
Perceived value was considered interesting research to predict customer buying behavior (Chen & Dubinsky, 2003). According to table 3 from the previous studies. Many researchers investigated the perceived value in three aspects: emotional values, which referred to feeling, fun, love, pride, sympathy, hate, joy, and willingness (Holbrook & Hirschman, 1982). especially feeling toward festival products and convenient facilities (Lee, Lee, & Choi, 2011), functional values that refer to quality (products), performance, price (money), adaptability, and social values, including acceptance (De Ruyter et al., 1997; Sánchez-Garcia, Moliner-Tena, Callarisa-Fiol, & Rodríguez-Artola, 2007; Sheth et al., 1991; Sweemey et al., 1999).
However, good organizational operation management and human resources management to achieve business success. The customer has perceived value measures success after using service in terms of social and economical, and the benefits include price, time, effort, safety, and comfort. Therefore, the activities, services, and products are a fundamental element contributing to the difference and the competitive advantage between the competitors (Carlos Fandos Roig, Sanchez Garcia, Angel
Moliner Tena, & Llorens Monzonis, 2006). The customers are aware of the value;
therefore, creating and maintaining the value of perception by creating appropriate values should be concerned in the marketing to differentiate from the rivals (Kotler &
Armstrong, 2010).
The review of past studies is reviewed as a holistic view of perceived values that relates to the festival, including emotional values that are principally critical to the festivals in which the emotional advantages (escapist, entertainment, diversities, and uniqueness) are significantly involved in the visitor’s making decision and functional values that provide utilitarian (Crompton & McKay, 1997). Twenty-one pieces of research related to perceived value in the area of festivals. The frequencies of the studied factors were founded on 1) emotional value and 2) functional value.
Fourteen studies examined emotional value, including festival products, convenient facilities, and environment (Akhoondnejad, 2016; Andersson, Armbrecht, &
Lundberg, 2017; Eid & El-Gohary, 2015; Holbrook & Hirschman, 1982; Lee et al., 2011; Lee et al., 2008; Poulsson & Kale, 2004; Ryu, Lee, & Gon Kim, 2012; Sanchez et al., 2006; Sherman, Mathur, & Smith, 1997; Wiedmann, Hennigs, & Siebels, 2009;
Yang & Peterson, 2004; Yoon et al., 2010; Yüksel, 2007). Functional value was studied included festival programs and informational services, there were (Akhoondnejad, 2016; Andersson et al., 2017; Eid & El-Gohary, 2015; Gallarza, Arteaga, Floristán, & Gil, 2009; Gentile, Spiller, & Noci, 2007; Gursoy, Spangenberg,
& Rutherford, 2006; Jamal, Othman, & Muhammad, 2011; Lee et al., 2008; Oh et al., 2007; Poulsson & Kale, 2004; Sanchez et al., 2006; Song et al., 2015; Tanford &
Jung, 2017) in table 2.7 as below;
2.7.1 PerceivedValue Factors
Table 2.7 The Perceived Value Factors
Authors, Year Emotional
Value
Functional Value
1 2 3 4 5
Andersson et al. (2017) * * * *
Tanford and Jung (2017) * *
Akhoondnejad (2016) * * * * *
Eid and El-Gohary (2015) * * * * *
Song et al. (2015) * *
Ryu et al. (2012) * *
Jamal et al. (2011) * *
Lee et al. (2011) * *
Yoon et al. (2010) * *
Gallarza et al. (2009) * *
Wiedmann et al. (2009) * *
Lee et al. (2008) * * * * *
Gentile et al. (2007) * *
Oh et al. (2007) * *
Yüksel (2007) * *
Gursoy et al. (2006) * *
Sanchez et al. (2006) * * * *
Poulsson and Kale (2004) * * * *
Yang and Peterson (2004) * *
Sherman et al. (1997) * *
Holbrook and Hirschman (1982) * *
Note: * 1. Emotional Value; 1) festival products 2) convenient facility 3) environment 2. Functional Value; 1) festival program 2) informational service
There are three perceived value components in table 2.7: emotional, functional, and social values that positively influence the experience economy and behaviors intention of food tourists (Ryu et al., 2012). For example, some consumers have perceived value when has a low-price campaign, while a balanced price and quality happen when the consumers have perceived value (Sanchez et al., 2006).
2.7.2 The Relationship Between Perceived Value and Experience Economy Factors………
The relationship between perceived value and experience economy factors from the reviewed literature found that there were two aspects 1) emotional value and 2) functional value. The two factors of the perceived value of the tourists who visit the festival are because the emotional value is the significant factor that comes from the feelings of the tourists individually. The emotional value includes festival products, convenient facilities, and environment (feeling; willingness or hedonic) that positively influences the experience economy (Lee et al., 2008). Another vital factor, functional perceived value (utilitarian; money, benefits, programs, or activities), consists of the festival program and informational service, which also influences the positive experience (Zeithaml, 1988).
The researcher hypothesizes that value is a multidimensional construct, including emotional (hedonic) and functional (utilitarian) measurements, and that emotional value is critical in enhancing experience economy. Therefore, the hypothesize is as follows figure2.3;
H1: perceived value has positive influences on experience economy (figure 2.3)
Figure 2.3 The Relationship Perceived Value and Experience Economy of Local FoodFestival
In the tourist area, perceived value is extensively researched (Song et al., 2015). Investigating the roles of functional and emotional values in festival assessment. In particular, value behavioral intentions and satisfaction in the festive tourism context, perceived value is used for product differentiation and evaluation (Williams & Soutar, 2009). Moreover, perceived value is underlined because of the strengthened worldwide competition. Finally, perceived value has been used for attendees’ attitudes evaluation toward the festivals.
Several past tourism kinds of research present that the perceived value influences experiences (Chen & Chen, 2010; Jin, Lee, & Lee, 2015; Prebensen, Woo, Chen, & Uysal, 2013). The attendees tend to accept the high value of products offered to create valuable experiences. Pine and Gilmore (1999) explained that economic value comes from well-staged experiences. In this research, local food festivals offer entertainment, education, escapist, and esthetics experiences which create the perceived value of tourism products. Therefore, this research will adopt the perceived value’s functional and emotional value dimensions.
H1
Experience Economy (EE) - Entertainment
- Education - Escapist - Esthetics Perceived Value of
the local food festival Emotional Value
- Festival Product - Convenient Facility - Environment
Functional Value - Festival Program -Informational Service
2.7.3 The Relationship Between Perceived Value and Behavioral Intention………..
There is another value-conscious; the managers or entrepreneurs need to understand where they have to emphasize the customer’s intention (McDougall &
Levesque, 2000) to achieve in the competitive market and the customer’s value (Eggert & Ulaga, 2002; Woodruff, 1997). Table 4 summarizes holistic research in the past decade that focuses on perceived value related to purchasing intention in a wide range, especially marketing. Various researches have been examined the relationship between purchasing intention and the perceived value that used the functional value approach as a majority. The functional value includes performance (quality) (Sweemey et al., 1999; Sweeney & Soutar, 2001), price (value money) (Sanchez et al., 2006; Sweeney & Soutar, 2001), extrinsic (De Ruyter et al., 1997), versatility (Sweemey et al., 1999), installation and professionalism (Sanchez et al., 2006) and personnel value (Sánchez-Garcia et al., 2007). The next perceived value component was studied in the social value (Sanchez et al., 2006; Sheth et al., 1991; Sweemey et al., 1999; Sweeney & Soutar, 2001). Most researchers found the perceived value has the positive influences that may present a fundamental part of a long-term assessment of the consumers’ purchasing intention (Ryu, Han, & Kim, 2008). Therefore, the hypothesize is as follows figure 2.4;
H4: Perceived value has positive influences on behavioral intention (figure 2.4)
Figure 2.4 The Relationship Perceived Value and Behavioural Intention of Local Food Festival
Behavior intention (BI) - Internal
(Motivation, attitudes, and personal norms)
- External
(Society and culture) Perceived Value
of the local food festival
Emotional Value - Festival Product - Convenient Facility - Environment
Functional Value - Festival Program - Informational Service
H4
2.7.4 Conclusion of Perceived Value
Perceived value is a powerful tool that can measure the overall assessment of tourists; both products and services are based on perception from the tourists who are received and provided (Zeithaml, 1988). Many research articles recommend that perceived value can predict behavior intention, satisfaction, loyalty, quality, and repurchase (Besermenji, Pivac, & Wallrabenstein, 2010; Cronin et al., 2000;
McDougall & Levesque, 2000; Oh, 2000). The research evidence discovered that the consumers who receive what they perceive (value of money) are higher satisfied than the customers who do not receive what they want (value of money) (Zeithaml, 1988).
Moreover, the relationship between perceived value and future behavioral intentions has been studied in the marketing literature on products or services. Further intentions are defined as a part of perceived value (Bolton & Drew, 1991). However, customers’ willingness is considered what they perceive, a possible making decision investigates the perceived value contributions, and they lead to the future intentions primarily (McDougall & Levesque, 2000).
2.7.5 The Conclusion of the Experience Economy
The four realms’ experiences differ from consumers’ passive and active immersion and absorption in the experience. Both passive and active participations entail consumer involvement in the creative experience. The 4Es are differentiated by the context of consumer involvement, as presented in figure 2.1. The passive participation or absorption of the customer into experience offered by the characteristic business as entertainment and esthetic elements; in contrast, the active absorption is identified as education and escapist experiences. The consumers are in the experiential setting, or the activity may not directly affect the experiential contributions, whereas the active participants may personally influence the setting and activities. The customers “absorb” educational and entertainment experiences and
“immerse” in escapist and esthetic experiences. The absorption brings the experience into the “mind,” and the immersion becomes virtually into itself experience (Pine &
Gilmore, 1999).
The researcher studied the four factors of experience economy from 31 papers.
The researcher found that most of the experience economy was investigated in four
realms, such as entertainment, education, escapism, and esthetic dimensions, using Pine and Gilmore’s (1999) experience economy model. Therefore, this research will apply the experience economy model into this research to examine the positive influence on the others, such as value perception (VP), behavioral intention (BI), and tourist loyalty (TR) in food tourism, local food festivals to this topic, as shown in table 2.8.
Table 2.8 The 4 Es’ Factors of Experience Economy (EE) Studies
Authors, Year 1* 2 3 4
1. Thanh and Kirova (2018) * * * *
2. Sotiriadis (2017) * * * *
3. Ali, Ryu, and Hussain (2016) * *
4. Zhang, Song, and Park (2016) * * * *
5. Radder and Han (2015) * * * *
6. Song et al. (2015) * * * *
7. Ali et al. (2014) * * * *
8. Loureiro (2014) * * * *
9. Manthiou et al. (2014) * * * *
10. Chen (2013) * * * *
11. Falk, Ballantyne, Packer, and Benckendorff (2012) * * * *
12. Kang and Gretzel (2012) * *
13. Quadri (2012) * * * *
14. Song, Choi, and Lee (2011) * * * *
15. Mehmetoglu and Engen (2011) * * * *
16. Santinia, Cavicchib, and Canavaric (2011) * * * *
17. Gelter (2010) * *
18. Park, Oh, and Park (2010) * * * *
19. Jurowski (2009) * * * *
20. Atwal and Williams (2009) * * * *
21. Oh et al. (2007) * * * *
22. Williams (2006) * * * *
Authors, Year 1* 2 3 4
23. Poulsson and Kale (2004) * * * *
24. Ali-Knight and Carlsen (2003) * * * *
25. Stamboulis and Skayannis (2003) * * * *
26. Holbrook (2000) * * * *
27. Zarem (2000) * * * *
28. Schmitt (1999) * * * *
29. Pine and Gilmore (1999) * * * *
30. Pine and Gilmore (1998) * * * *
31. Arnould and Price (1993) * * * *
Note: * 1, Entertainment 2, Education 3, Escapist 4, Esthetic
2.7.6 Conclusion of the 4Es’Factors of Experience Economy (EE)
To sum up, EE factors in food tourism is examined into four elements with both active and passive participation. Most studies initially investigated four realms, as seen in table 2.1. However, few studies focused on two dimensions: education and escapism of experience economy (Ali et al., 2016; Gelter, 2010; Kang & Gretzel, 2012). Therefore, the researcher considers that the 4Es of the experience economy model (Pine & Gilmore, 1999) will be applied to the local food festivals. Therefore, the 4 Es’factors of Pine and Gilmore (1999) can be concluded for each phase in table 2.9.
Table 2.9 The Developed Study of 4Es in Experience Economy
4 Es’Factors Description Active – Passive Participation
Absorption – Immersion Entertainment
Experience
Customer’s attention is engaged by the business proposing
Customers observe activities or performances of the others passively
Customers absorb, but they are not be a part of activities or performances Education Experience Customer increases
knowledge and skills
Customer participates actively over interactive
Customer absorbs the business
4 Es’Factors Description Active – Passive Participation
Absorption – Immersion concluded absorbing
information expressed in an interactive approach
commitment of his/her body and/or mind
contributions
Escapist Experience Customers are the active players or participants who shape the events
Customers have the
involvement in the activities or events actively
Customers are immersed in a virtual or actual environment
Customer appreciates
just being in a sensory-rich surrounding
Customers do not alter a nature of atmosphere measurably and passively appreciate
Customers are immersed in or surrounded by the atmosphere
According to Pine and Gilmore (1999), the description of the 4Es may be found in table 2.9. They presented four types of customer experience, including entertainment, education, escapist, and esthetic, as “4Es” that differ between inactive, passive participation and absorption, immersion elements that overlap to create quadrants. For example, active and passive participation involves customers’ level of involvement in establishing the experience-producing offering, while the active participants affect directly through the offering, which produces the experiences. The absorption refers to inhabiting one’s attention by conveying the experience into the customer’s mind, and the immersion refers to the physical.