Price versus value, cost versus value- Part 2

Positioning, Value, value proposition

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!!!

Perception- III

differentiation, Marketing, Positioning, Product Management, Sales

These parts on marketing are short because I like to get a bite size idea across in the time while you wait in the line at Tim Hortons or Starbucks – max two minute read.

In the first post on this topic, I spoke about why perception about your product or service can make such a big difference in the premiums you command and the profitability you can make.

In the second post I wrote about the downside of taking a position in the market especially when there’s a major technology shift – from horse carriages to automotive.

One of the key agendas of marketing is to attract customers to you. But there’s an unsaid implication in that statement.

Marketing should help you attract the customers you want and repel those you don’t want.

Like the red egg above in the picture,  people who don’t like to have red eggs will get repulsed by it and will not buy it. However the people who love red eggs will go to any length to get them.

You may sell a much smaller volume than the white eggs, but you could be making much larger volume. So many iconic brands like Harley Davidson, Apple, don’t have a large market share in terms of volume but they lead in terms of profitability.

Whatever perception you want to create however cannot be at the cost of the quality of the products or services. Good marketing is not a substitute for a poor quality product.

If you have an excellent quality product or service and then you choose a narrow market and create a perception of being different then you can take home a much higher profit.

Till next time.

Carpe Diem!!!