Market Value

To the residential real estate agent, market value is the price at which a house will sell in 60 to 90 days. To the financial analyst, market value is the sum of a company' total shares of stock outstanding multiplied by the per share price of that stock at a given point in time. To the small business owner, market value is what his or her business may be worth to a prospective buyer based on the business' combined tangible (inventory, buildings, equipment, and so on) and intangible (brand value, customer loyalty, goodwill, and so on) assets.

To the health care marketing professional, market value is no less important but often more difficult to define. Although a financial definition of market value can certainly apply in the health care setting—the value of a health care company' stock or the selling price of a local not-for-profit hospital, for example—when applied to the discipline of marketing, the term market value is generally thought of in terms of the intangible assets of the organization or brand that appeal to customers rather than a whole business valuation.

Market value can be thought of as a collection of strengths or attributes consumers use to differentiate one brand from another or the total value consumers place on a particular brand. This value may be quantified objectively in terms of measurable attributes (price, service, quality, clinical outcomes) or subjectively in terms of perceptions or feelings. Put another way, market value is the potential of a product or service to satisfy customers’ needs and wants.1

[Page 354]Although an organization may attempt to define the appropriate attributes of its market value and even influence consumer' awareness, understanding, and acceptance of those attributes, ultimately the marketplace decides what the market value is for a given industry or product. Marketers cannot create market value in a vacuum.

For example, the rapid growth of outpatient diagnostic and treatment options is resulting in a shift of consumers’ awareness and desire for ambulatory care services versus traditional inpatient services. Although much of this is fueled by new technologies and changes in how medicine if performed, the rate of change is also being accelerated by the demand sustained by educated health care consumers.

Value analysis is a popular research method for determining a particular product' value equation and a specific brand' value proposition among key customer groups. Value analysis is an important tool for understanding what value characteristics consumers use to choose a specific service or product and mapping these attributes against competing products. For a business to succeed, it must deliver superior customer value, which requires an emphasis on the competitors who set the performance standard.2

It is important to note that market value is typically dynamic and often changes over time as a result of changes in the marketplace, changes in consumers’ needs, competitors introducing new or different products, and new technologies. What may be important or thought of as valuable today for consumers may not be in 10 years. Value analysis can also be an effective tool for tracking changes in consumers’ perceptions of market value for an industry, a specific product or a given company.<>

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