From the choices usually available in a marketplace, customers determine which supplier offers the best value. Different customers have different needs, different wants, different desires. Hence, multiple competitors may well exist in the same marketspace. However, seldom do competitors have the same market share. Typically, one company wins the vote for "best value" from a plurality (or majority) of potential customers
In a nutshell, customers determine value by which supplier offers the best benefits at the optimal price.
Value = Benefits/Price
Great value, super bargain!: the benefits greatly exceed the price ... Value = ++
Good value: the benefits outweigh the price ... Value = +
Fair value: the benefits match the price ... Value = OK
Bad value: the price outweighs the benefits ... Value = -
Rip off!: the price greatly exceeds the benefits ... Value = --
To increase value, either add benefits or decrease price.
The "quick and dirty" way to enhance value is to have a "Sale!" ... "50% off, limited time only!"
Customers make their buy decisions primarily based on their perceptions of value, comparing the options offered from several sources. How many sources are included is a customer decision, and not always entirely logical. One of the key values of a brand is to make the buying decision easy for the customer ... "I'll just by an Apple computer rather than explore other options."
Some benefits are determined objectively ... fit, form, function, feel, features, performance ...
Some benefits are determined subjectively ... color, smell, brand name, shape ...
Some aspects of the price are direct ... the cost ...
Some aspects of the price are indirect ... warranty, convenience of purchase ...
Ways to deliver value to a customer:
- Product: performance, quality, features, brand, selection ...
- Price: fair, visible, consistent, reasonable
- Access: convenient, location, nearby, at-hand
- Service: ordering, delivery, return, check-out
- Experience: emotional, respect, ambiance, fun, intimacy ...
- Process: ways of doing business that are consistent and comfortable
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