Title: Real Value Definition
Headings: Real Value
Real Value
What Is Real Value?
Key Takeaways
Understanding Real Values
Real Value vs. Perceived Value

Content: Real Value vs. Perceived Value
Real value is fairly easy to measure. A business must account for the costs of labor, raw materials, shipping, marketing, and product development, which allows it to calculate the product's real value. Perceived value isn't as easy, since many factors that play into it aren't tangible or precisely measurable. Factors such as scarcity (including artificial scarcity), marketing efforts, novelty, and brand associations all play into perceived value. For example, two businesses may sell similar cars that cost the same amount to produce, giving them identical real values. However, one car will likely have a higher perceived value if its maker has a reputation for reliability and if the car is the center of a national marketing campaign that successfully builds buzz. The impact of real and perceived values, and the differences between them, become real in sales numbers and in the pricing of products. A higher perceived value will lead consumers to think that a product is better than other items with the same real value selling for a similar price. At the same time, the price can impact the perceptions of value. For example, businesses that release special limited editions of existing products can sometimes create a sense of a higher perceived value, due to exclusivity and novelty, even if the product has the same real value as an existing item that sells for a lower price.