Price versus value, cost versus value- Part 2

Apple is a perfect example of value in the mind of the user.

In my last post on this topic I had written about how value like beauty is in the eyes/mind of the user.

No one knows to exploit this better than Apple. You have seen photos of people queuing up in front of Apple stores hours before the opening to buy the newest iPhone to be launched.

I am not an iPhone user but we do use Apple computers at home. And when my last MacBook Air’s battery started giving me problems I decided to buy a new one. This was October last year. When we started looking, the first thing we noticed that Apple was intending to come out with a new processor based system soon. This processor would reduce battery usage by a fraction and performance was atleast 2 times more. So instead of immediately buying the readily available product we decided to wait because we saw value in that. Eventhough we also knew the price points would be much higher.

The M1 chip MacBook was launched sometime November last year in the US, but it was not available in India till April this year. And then the second wave of Covid hit India and everything was in lockdown. So again we waited. Finally we got our new Apple M1 MacBook Air in June end.

If you can create a position in the minds of the target audience, then cost becomes a secondary factor, it is the value that the customer perceives which makes all the difference.

Till next time then.

Carpe Diem!!!

Price versus value, cost versus value

differentiation, Marketing, Positioning, Product Management, Value, value proposition

This is a pertinent question in marketing or sales. I keep getting the statement – the price is too high – compared to what?

Does anyone going to a Ritz Carlton or a Four Season hotel say the price of the room is too high. Does anyone who is buying a Roll Royce or Lamborghini ever say the price is too high. For a lot of people the Mona Lisa is just another painting, but for a lot of others it could have huge value hence its kept under so much security unlike another painting in the Louvre museum.

I think its the marketing and sales teams’ responsibility to position the offering that they have, correctly. This does not mean that there won’t be competitive situations. Especially in technology marketing where the entry barriers are very low, the competition heats up very fast.

Even in technology companies though you will see that there are disruptors who come in and take away a large share of the market suddenly but companies like IBM , Oracle and others who continue working on giving more value to their customers and charging a distinct price differential.

The key point that needs to come out is Value. Like beauty lies in the eyes of the beholder, value is specific to the buyer. Unlike Gold which has a fixed value defined, most other things like houses, shares etc. all have relative value. For one person who is selling a share the value is less than the price he is selling it at, while the buyer is seeing more value than the price she is paying for it, hence she is buying it.

Similarly if the customer see the value that you offer for your product same as what someone else offers, then the only differential is price that the customer can work on.

One of the best ways to reduce the cost/price value argument is to educate the customer so she sees you as the authority on the subject. I have shared multiple posts on how education has eliminated the price discussion from the buyer’s mind altogether.

Other ways off course include things like the ecosystem – if you are part of a proprietary ecosystem than you have very little competition – IBM Mainframes , Apple and others have very strong ecosystems and the discussion on just price does not take place.

The key for any marketing or product management person is simple they have to be able to build the value of the product or service in the minds of the customer preferably through education. For the sales person its important to identify and understand the value that the customer is looking for before easing time on a deal.

As I said earlier “VALUE” lies in the mind of the person buying.

Till next time then.

Carpe Diem!!!

Solving problems – only focus on your Unique Abilities

Unique Ability, Value, value proposition

Today’s post is going to be short. Today has been an overdose of problems to be resolved.

Some problems were with vendors to get a better price point, some with the internal teams and some with customers.

I have observed that while I can handle customer and marketing related problems quite well, I am generally not very good at interacting with vendors and negotiating contracts. I have a feeling when dealing with vendors I tend to get a little soft and don’t keep all the commercials in control, so I have to put an amazing amount of effort to even go through a small transaction.

On the other hand when I am dealing with customers or dealing with marketing related challenges with the team I am more alert and tend to be more creative.

Dan Sullivan has this concept of Unique Ability that he talks about a lot. As per him when you operate in your unique ability not only are you more energised to do things, you are also more creative and get less tired.

On the other hand when you are doing things where you don’t have the necessary ability, you tend to have to spend more time and energy. His view is that you should have people around you who complement you on your unique ability so that the areas where they have a unique ability can cover the areas where you are weak. This way every one enjoys all the time because they only do the work which suits their Unique Ability.

What’s your view. Will love to hear your comments

Till next time

Carpe Diem!!!

Technology Adoption- Part 2

Product Management, Value, value proposition

In my last post I spoke about the different kinds of resistance when you take a new technology product or service you take to the market.

Today I will talk about how the product management person will have to keep the “value” issues related to adoption.

If your company is seen to be a price leader in the market then you cannot come out and position a product under your company’s brand as a premium product.

Never create a confusion in the market. Your product or service may have the best features and benefits, but if it’s perceived as expensive and you are the price leader then it will not get any traction.

There are two ways I have found companies solve this issue. They create a new company or create a completely new brand. To create a new brand is a very expensive affair and companies have to ensure a long branding strategy for this.

The other value position in the technology world is related to product innovation. If you’re seen as a innovation leader then you have to ensure that each new product you come out with has a WoW factor with it.

On the other hand if you’re products are seen as unreliable then you have a major challenge to be able to show value.

So we need to keep the customer value perception always in mind if you have to get your product successful.

Till next time then.

Carpe Diem!!!