Woodruff's value hierarchy model

While trying to come up with a methodology for conducting research in service science, I realised that I have to scour the literature on value. With the magic of Google Scholar I stumbled upon a paper by Woodruff (1997) entitled Customer Value: The next source for competitive advantage. It is a heavily cited paper. At the time of me writing this piece, it stands at 1309 citations. I also noticed that Prof Irene Ng's paper (the one she talked about during her visit here to UKM) also cite and heavily leverage on Woodruff's work.


Woodruff's paper is a very good read and it presents a hierarchical model that connects three levels (dimensions) of customer value. The lowest is attribute base value, followed by consequence based (in use) value and finally at the top most is goal based value. Woodruff explains the interconnections between the values and how each level leads to the other and vice versa. He pointed out that most customer research (at the time of him writing the paper) are geared towards the narrow point of view where value are usually associated with product attibutes*. In doing so other customer value dimensions such as use value and goal based value are left out. It is my contention that these are the dimensions that service science is concentrating on. Talking about goal based value, Prahalad and Ramaswamy (2002) highlights some of these (I have put some in the figure) in his paper (The Co-creation Connection).

* A lot of co-creation techniques are still concentrating in this area. Here customers are encouraged to give their input on how they would want their products to look like and how the products should perform. They are given the opportunities to co-create/produce/design/construct the products with the manufacturers via virtual tools like the 'co-creation lab' or the 'concept lab'. These type of co-creation will produce desired product attributes and product performance according to user needs.