September 2012 Marketing
Market Analysis & Communications for the Manufacturing Industry
Value is defined by your customers – product and service features that they are willing to pay for and that motivate them to buy from you rather than from your competitors. When designing or selecting a product to bring to market, it is important to understand the relationship between the product characteristics and customer interests. A product might have the best performance of anything in the market but if that drives the price too high, it won’t be successful — customers may not be willing to pay for the extra performance.
Every product has strengths and weaknesses and every product comes to market with certain expectations. Businesses are successful if they can find the right match and deliver what the market wants — no more, no less.
From a marketing perspective, it is important to know what the customer values. If your marketing campaign emphasizes basic characteristics of the product or service, the same things that your competitors are touting and the things that are merely “expected” from that kind of product, the marketing effort won’t grab the prospect’s attention.
What is it about your product that raises it above the competition? Assuming that it is a feature or characteristic that is of value to the customer, that’s what your ad should be about. If your product or service excels at something that is not valuable to the prospect, your efforts to promote the product are doomed. So the secret comes down to knowing what the customer values.
In some markets, low price is the differentiator, but price is not always the deciding factor. The price that’s paid, however, always reflects the perceived value that the customer assigns to the purchase. If your product truly delivers more value, then a premium price is justified and the customer will be willing to pay that higher price. But they have to recognize that higher value – and that’s the job that marketing has to complete successfully.
In most cases, one or more of these factors: lower price, higher quality, functional superiority, reliability, attractive design, and/or reputation (brand name) will attract customers and make the sale. But some of these factors are mutually exclusive (high quality and low cost, for example). Be sure you know what customers perceive to be your value before you create a go-to-market strategy that doesn’t meet expectations.