Consumer Sovereignty and Subjective Value: A Demand-Side Perspective

Abstract

Value is a critical concept in management research. Yet its conceptualization has been lacking in clarity, substance, and meaning due in large part to the abstract and conflated definitions which it has attained in modern language. Upon close scrutiny and examination of the usage of the value construct in management research, we believe that a reevaluation of the concept is warranted. We find the demand-side approach to strategy and the consumer sovereignty perspective from economics to be most illuminating in conceptualizing the nature and origin of value, and respond to a recent call for clarification to this end (Levitas, 2013). Specifically, we suggest that product value is not created, but only becomes defined in the subjective experience of consumption, which may be facilitated by firms’ value propositions in the form of products and services. This reconceptualization of value has significant implications, both in the research and practice of business management, which we briefly explore.