Your small business thinks it sees a need in a market which is easily accessible to you. You survey your target market to confirm what is needed, where your contribution of value can lie and how much your market is
willing to pay for this value. You then design a product within the required price range which satisfies this need.
Traditional marketing-oriented company.
You find that your competitor across town is selling essentially the same product but at twice the price.
Not only that, he's got a bigger market share. He's probably selling perceived value.
To get at the perceived value concept, you have to analyse your market in terms of what your
customers value. For lower end market products this might be something like security or getting a good deal.
For upper end markets it might be saving time. Once you have an idea of what it is that seems valuable to your
market, besides the direct qualities of your product, you can position yourself to build additional features into
your customer relationship which provide this additional perceived value.
The key here is to do something that costs you relatively little but which seems to make life a lot easier for your
customers. It may be putting coffee and donuts in your reception area. It may be offering free same day delivery.
It may be offering in-home service or extra warranty. It should not have an extra cost to the customer attached
to it and your target market must perceive it as having value. Some of the most effective features actually have
little real value but make the customers feel good or make the purchasing experience more fun. Now you can
charge twice the going rate just like your competitor across town, make piles of money and still have satisfied
customers.
FIRST PUBLISHED AT SUITE101.COM
