Value Does Not Always Have to Equal Low Price

Value- it's the mantra marketers chant to persuade buyers to select their offerings. We like to assume we have a good understanding of what customers expect when it comes to value. A tendency exists to equate value with low price. The judgment that a product provides "good value for the money" even suggests that our brand does not have to be the lowest priced option to be perceived as a good value. But, price too often is the measuring stick used to make determinations of value. Even in difficult economic times, price need not be the lone source of customer value.

Value judgments are based on a comparison of benefits offered by a product or service with the sacrifices required to acquire it. Managing customer value from this perspective suggests we have but two options to enhance value: increase benefits or decrease sacrifices. Again, the tendency is to decrease sacrifices (i.e., lower price) because who wouldn't want to pay a low price? That assumption overlooks that value can come from reducing other sacrifices (e.g., fast delivery or favorable credit terms) or strengthening benefits offered.

An example of delivering value via benefits comes from Kraft. It is charging 99 cents for its iFood Assistant iPhone application. Giving the app away could be a way to encourage more users, but Kraft believes the value the app delivers as a resource for consumers via a mobile platform justifies charging a nominal price. Value is correlated with relevance. A brand that is relevant to consumers delivers value. Before succumbing to the temptation of creating value through low price, consider all other sources for enhancing value so that it is not created at the expense of profits.

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