TTM associates Article
7 Steps to Sustain Value to your Customer Base!
In many cases, organizations allocate time and money on their marketing campaigns, but at the end they do not achieve the desired results in sales. Usually, the problem is in defining the target market. Companies need to narrow down their target marketing definition so they can be effective. The more narrow the market definition, the more focused will be the efforts on serving the target audience and, as a result, the more effective the business results will be.
Why Is Value Mapping important?
“Value” is one of the most overused and misrepresented terms in marketing today. The real essence of value revolves around the trade-off between the benefits the customer receives from a product (tangible and intangible) and the price (total cost of ownership).
7 Steps for a focused Value Mapping:
The best approach is the product to deliver a noticeable increase in benefits (for example, greater than 20% increase) and to be priced so that it divides the value created with 1/3 for the customer and 2/3 to the company. In this case, the product is well positioned against other competitive options, its market value is enhanced and the company will have the capability to reduce prices when needed (and still stay above the price floor).
In late 2012, Apple launched the first major extension of its iPad line, the iPad Mini. In doing so, Apple entered a growing and crowded market. Analysts’ opinions varied all over the map in reference to what constitutes a fair price for the product. However, such undisciplined thinking within a company can lead to mistakes in overpricing, and mispositioning. The iPad Mini offered an exceptional array of features as well as Apple’s vaunted design elements. Yet, the price of the base model started at $329, 50% higher than some of competitors, like Nook and Kindle. At the same time, prices at the upper end of the Mini line were off the charts. Nevertheless, through the lens of the customer value analysis, Apple’s pricing and positioning of the iPad Mini models was consistent with the company’s preference and reputation for premium performance and design at premium price. The Apple 32GB Mini was priced at $429, which was very close to its true market value of $428. The pricing of this product was consistent wih the implied market value of the Minis’ performance advantages. Indeed, despite its high prices and critical indifference, the iPad Mini got off to a roaring start. In the first quarter of 2013, Apple’s tablet sales almost doubled compared to last year’s for the same period.
Drawing a meaningful Map is simple, yet difficult.
As customers’ priorities change, the product benefits they desire also change. Careful price-benefit analysis can provide an early warning for these changes. Focus usually makes the difference between a business that grows profitably and one that never gains any momentum. You can continue to hope that “next time email is going to work better” or you can develop a clear focus and a realistic strategy.