The Price Isn’t
Right: Fallout
from the Great Recession
Price Is In the Eye of the Customer is Not Cliché
“Price is in the eye of the customer” is not as cliché as the fact that
most people do not understand what it means. Price is in the eye of the
customer means the total experience a buyer has with a company weighed
against the price of the purchase the buyer made or makes over a period
of time. Total experience means every interaction the buyer has with a
company. From the sales process to ordering, delivery, installation,
implementation, customer support, billing, trade show experience, and
so on. Even a company’s stock performance is part of the total
experience the buyer weighs against the price of the purchase.
For example, if a buyer purchases $10 million in core-routers from a
company and at least one core-router crashed every week. The buyer’s
total experience has been affected negatively and will diminish the
value of the purchase. Furthermore, if the buyer contacts the technical
assistance center of the company and cannot get timely help to resolve
the weekly crashes, the lack of timely support will further negatively
affect the total experience of the buyer with the company. Therefore,
it is crucial for product managers to inspect every interaction a buyer
will have with the company before, during, and after the purchase of
their product.
Michael
Porter on The Value Chain and Buyer Value[1]
“A
firm lowers buyer cost or raises buyer performance through the impact
of its value chain on the buyer’s value chain. A firm may affect the
buyer’s chain by simply providing an input to one buyer activity.
Frequently, however, a firm’s product will have both direct and
indirect impacts on the buyer’s chain that go beyond the activity in
which the product is actually used.”
While
it would be difficult to achieve perfection across all
interactions with a prospect or customer, since most often these
interactions involve interfacing with a human being who the product
manager has little control over, the creation of best practices for
interacting with prospects and customers could reduce the number of
unpleasant experiences they may encounter.
Winning at Pricing, How High-Tech Product
Managers Can Avoid Common Mistakes That Defeat Pricing Strategies revives
the old saying "price is in the eye
of the customer" from
being a cliché and
provides meaning for product managers on its importance.
Incorporating excerpts from Michael E. Porter’s Competitive Advantage:
Creating and Sustaining Superior Performance, Winning at Pricing uses a
blend of new strategies and established practices to create a
definitive resource for product managers. Professor Porter, a leading
authority on the competitiveness and economic development of nations,
states, and regions and the application of competitive principles to
social problems such as health care, the environment, and corporate
responsibility, is the foremost expert on competitive strategy.
[1] Michael E. Porter, Competitive Advantage Creating and Sustaining Superior Performance (New York: The Free Press, 1985), 132
Is
It Difficult Doing Business With Your Company? The
packaging of a
product is instrumental to the marketing strategy and the purchase of a
product. As a topic of discussion, packaging is very broad since it
covers
everything from consumer goods to industrial, commercial, and
institutional
products. In any case, packaging is responsible for achieving several
goals:
establish the brand, communicate the features and benefits, promote and
sell
the product, differentiate the product from other products, and provide
protection and safety for the product. Most importantly, the overall
goal for product managers is to make the packaging of their product
attractive to its
buyers. High-tech
products are industrial products; they are goods and
services
purchased for use in the production of other goods and services or used
to
conduct business. Additionally, high-tech products for the most part
are
customizable, so the purchase is more complex since it involves
multiple
components; therefore, how the product manager packages a high-tech
product for
its buyers can be a fortunate or regrettable experience. If the sales
order
process is too complex, it can change a buyer’s decision to make a
purchase. Cumbersome
sales order processes frustrate buyers because of the impact it has on
the
buyer’s value chain. Hence, to avoid unattractive packaging, the
product
manager should take into consideration the complexity, attractiveness,
and
clarity of the packaging strategy for his or her product. Failure to do
so will
diminish the value of a product making the buyer more reluctant to pay
a
premium price. Is Your Product Revolutionary
or
Evolutionary? At
a high level, there are fundamentally two categories of products:
revolutionary products and evolutionary products. Revolutionary
products jump to the next generation. The benefits are so significant
that change happens in a short period of time and on a large scale. The
entire product category transforms. A good example would be the jump to
cell phones from landline phones, since the significant benefit of cell
phones is mobility; being able to take them anywhere and everywhere you
go. On the other hand, evolutionary products take incremental steps to
the next generation of products over a long period of time. For
example, music players have evolved over the years from the
introduction of the phonograph in 1877 to today’s small digital devices
that fit in your pocket and have the tracks stored in the “cloud.” As a
result, the approach to making value obvious for a revolutionary
product will be different from the approach for making value obvious
for an evolutionary product. Understanding this distinction is critical
for a firm to be uniquely able to create competitive advantage for
buyers. Product managers should not get caught in the differentiation
trap of only positioning their product by using words that do not
establish real value for the buyer. For a product to be a successful,
the product manager needs to create competitive advantages for its
buyers and make the value obvious in the positioning of the product by
communicating how the product will lower the buyer’s costs or raise the
buyer’s performance. Learn more in Winning at Pricing, How High-Tech Product
Managers Can Avoid Common Mistakes That Defeat Pricing Strategies. Pricing
High-Tech Products with Insights from Michael Porter is a WIN! Kaleah
Publishing is pleased to announce Dawn Pugh’s new book Winning at PRICING: How High-Tech Product
Managers Can Avoid Common Mistakes That Defeat Pricing Strategies. The
book
features contributing excerpts from Michael
E. Porter’s Competitive Advantage:
Creating and Sustaining Superior Performance. Improving
a marketing strategy for products in the high-tech industry
involves positioning the product in a way that demonstrates value while
emphasizing
the advantages buyers will experience. However, establishing value in
product
positioning is not as easy as one might think. With this groundbreaking
new
book, product managers will be able to establish value and uniquely
create
competitive advantage for buyers in a way that utilizes time-tested
strategies
with non-traditional pricing tactics. Instructional and educational,
this
invaluable book offers high-tech industry professionals expert guidance
on how
to win at pricing. Written
specifically for high-tech product managers, the book instructs
readers how to win at pricing by teaching them to avoid the common
mistakes
that defeat pricing strategies. A fantastic resource for product
managers,
sales representatives, and executives in the high-tech industry, Winning at Pricing expertly guides readers
toward the creation of competitive advantage that will make buyers less
reluctant to pay a premium price. Michael
E. Porter, a leading authority on the competitiveness and
economic development of nations, states, and regions and the
application of
competitive principles to social problems such as health care, the
environment,
and corporate responsibility, is the fore
most expert on
competitive strategy. Combining time-tested strategies with innovative
ways to
establish value and create competitive advantages, this priceless
resource is a
must read for anyone in the high-tech industry. Published
and distributed in the United States and Internationally the
book can be purchased on Amazon.com, Amazon.co.uk,
Amazon.de, Amazon.fr, Amazon.it, Amazon.es, the
CreateSpace eStore, and at thousands of major online and offline
bookstores and
retailers.
Winning at Pricing, How High-Tech Product
Managers Can Avoid Common Mistakes That Defeat Pricing Strategies addresses the importance of an
attractive
packaging strategy for high-tech products by revealing the harms
unattractive
packaging strategies will create for a firm and its buyers. Incorporating
excerpts from Michael E. Porter’s Competitive
Advantage:
Creating and
Sustaining Superior Performance,
Winning
at Pricing offers a blend of new strategies and established
practices
to
create a definitive resource for product managers. Professor Porter, a
leading
authority on the competitiveness and economic development of nations,
states,
and regions and the application of competitive principles to social
problems
such as health care, the environment, and corporate responsibility, is
the
foremost expert on competitive strategy.
For
additional information, please
contact
kaleahpublishing@gmail.com or visit Dawn's author page.
All rights reserved and copy written
2013 Winning at PRICING: How High-Tech Product Managers Can Avoid
Common
Mistakes That Defeat Pricing Strategies including Contributing Excerpts
from Competitive
Advantage: Creating and Sustaining Superior Performance. ###