Value is simply “bang-per-buck.” In this case, “bang” is just the number of benefits you are able to enjoy by virtue of purchasing the given product, service, transaction or event. The “buck” is rather self-explanitory.
So, the phrase “bang-per-buck” can be heuristically expressed as: Value = Benefits / Cost. For example, let’s say a certain type of product has 10 core benefits per unit. We’ll also say that the customer must pay $5.00 per unit to recieve and enjoy those core benefits. Thus, the Entitlement Unit Value (EUV) would be: EUV = Benefits / Cost = 10 / $5.00 = 2 Benefits per Dollar. In this case, the term “entitlement” is a rightful level of expectation often determined by negotiation.
However, its entirely possible that only a fraction of the total benefits can be realized (i.e., partial benefit). For example, the aforementioned product may have one or more deficiencies (of one type or another) that only allows 80% of the EUV to be enjoyed. Thus, the Realized Unit Value (RUV) would be: RUV = Q x EUV = .80 x 2 = 1.6 Benefits per Dollar. The difference between the EUV and RUV is “lost value.” The is the value that has been paid for, but not received.
The aforementioned explaination is at the highest level of generalization and understanding. Granted, there are a near infinite number of mitigating circumstances; however, at this level of discussion, such myopic factors need not be weighted into the discusion (at the risk of loosing sight of the central concepts).