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Nov 09

Tips on Creating Value For Your Business: Quality vs. Price

"Cheapest and Best" is a good example of a confusing advert. This blog post provides some useful tips on crafting a convincing marketing message, which appeals to your target market and has a clear point of differentiation.

You do, of course, know how to define your target market and differentiate your product or service!

Explaining Bulk Water

This sign has always bothered me.  I have driven past it countless times over the years on my way to and from golf.  The sign is advertising bulk water to remote houses, businesses and farms that do not have mains water and rely on water tanks or wells. Foley's Water provides bulk water carriers with fresh water suitable for domestic and commercial use.

Only a small proportion of the people that drive by this sign are potential customers, but this is a home-made sign, presumably on the property of Foley’s Water.

Several factors are likely to be of interest to prospective customers:

  1. Price, which is likely to rise in times of water shortages.
  2. Quality, which can also suffer when there are water shortages.
  3. Availability, which also presents challenges as the demand can increase dramatically if there is a prolonged drought.

How well does this sign address these three factors?

What is wrong with “cheapest and best?”

The two components are not consistent and for most people are simply contradictory.

  • “If your water is the cheapest, how come it is the best?”
  • “If you water really is the best, why is it the cheapest?

This reminds me of a concept that was drummed into me over several years in Germany. "Preis-Leistungs-Verhältnis" means "price vs. quality relationship".  You can approach this from two angles.

  • What should the price be for a given level of quality?
  •  What quality must be offered for a price point.

Mercedes and BMW are in the same price and quality bracket. BMW and VolksWagen are not! There are several lessons to draw from this and they apply to all businesses.

  1. Make sure your message is clear and convincing. Test this to see how people respond. Not just anyone, but people who represent your target market.
  2. Have a credible value proposition that is relevant to your target market. Understand  what benefits your target market values, rather than the features of your product or service.People will naturally give and spread the word and give good reviews if you make your customers happy beyond their expectations.
  3. Have a point of differentiation, preferably one that is unique to your business and difficult to copy. This point of differentiation must be recognised and valued by you target market. Highlight the unique benefits (not features) and the results these benefits provide. The key points are UNIQUE and VALUE.

Do test all of this with prospects from your target market.  You may need to go through several iterations to get it right.  It may help to have an external person challenge your responses to these key questions:

  1. What are you selling?
  2. Who are you selling to?
  3. Why would they buy this product or service?
  4. Why would they buy from you?
  5. How much are they willing to pay?

It may also help to define your target market more tightly. Here is a simple example of the steps:

  1. Pizzas in New York.
  2. Gourmet pizzas in Manhattan.
  3. Vegan gourmet pizzas in Greenwich Village.

If you are still undecided with your marketing message, I can help you. Let's talk.

Looking at the image again, what have you seen that you find odd?

Simon Fawkes
Accredited Mindshop Facilitator
Business to Markets Ltd