Two Things You Need to Know about Creating Value

March 13, 2012 in Critical Success Factors, Customer Behavior, Demand Generation, Differentiation

By one estimate, three out of ten products fail because of poor value proposition. In other words, 30 percent of products don’t provide consumers with enough value.

Three out of ten might not sound like much, but for the product developers behind those products, it is a crushing defeat. Understanding what “value” means to their target consumers might have saved their products.

Customers measure value based largely on two things: price and benefit.

PRICE is the amount a consumer is asked to spend on a company’s product. A product must live up to its price. To claim value at any price point, a company must make a customer find enough worth in its product.

BENEFIT is the “worth” that the consumer must associate with your product. Your customer must be able to justify paying a product’s asking price, and this justification is determined by the product’s perceived usefulness and benefit.

To create VALUE for your target customers, you must strike a balance between the price of your products and the benefits they will provide. Find this balance and avoid a product failure!

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Trying to Catch Up in a Changing Market

March 6, 2012 in Competition, Customer Behavior, Demand Generation, Differentiation, Processes

Because of fragmented segments and increased digitization, category lifecycles are getting smaller. This could affect your business for the following reasons:

• Your customers are looking for the latest and greatest thing.

• Your product development could always be trying to catch up.

• Your products could enter the market too late, meaning your innovations have missed the boat before they even had a chance to take off.

The best way to maximize returns in a market that currently moves and changes at the speed of the internet is to enter the market early. Enhancing product development efficiency and getting your products in front of consumers before your competitors will gain your company a huge competitive advantage.

The key to increased profits and maximum returns is to set the market rather than chase it and watch it dwindle away. Adapting to fragmented segments and product digitization could make the difference between a large profit or a huge loss.

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Marketing Lessons Learned from Wal-Mart

February 24, 2012 in Demand Generation, Differentiation, Measurement, Processes, Product/Market Fit

• Don’t change your company’s image.

Your customers develop associations with your company and its products and services. Drastically trying to change those associations can alienate your target customers—the ones who helped to get your business where it is today.

• Use consumer data research to your advantage.

The Wal-Mart company has mastered the art of utilizing consumer data research to determine the shopping habits of its target consumers. Little information is more valuable than merely knowing where your target customers are shopping and what they are looking to purchase.

• Make your marketing techniques and product development sophisticated—but not too sophisticated.

Much like with your company image, you do not want to over-improve your marketing techniques and product development. Always strive to maintain a connection with your target consumers. By all means, improve upon your message and your product innovations. But always be mindful of who is listening to your message and purchasing your products.

Source: Suzanne Kapner, “Wal-Mart Enters the Ad Age”, Fortune, August 18, 2008, Page 30

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