COMPETITIVE VALUE AND DIFFERENTIATION

COMPETITIVE VALUE AND DIFFERENTIATION

Why should someone do business with you instead of your competitor?

Answer: Because you offer something of value the competition doesn't.

There are two important elements in that statement. One is, you're different from your competitor.The other is, you offer value. Just being different isn't being competitive. The advantage comes from offering competitive value.

Each buyer has an objective (measurable) or subjective (personal) means to measure the presence of valuable elements in everything available for purchase. And, she assigns relative importance to each element of value. The process of selecting a purchase is one of setting priorities and determining which available item has the most of what she's looking for - matching the priorities with the perceived presence of "valuable" elements.  

Here are seven elements of value. Consider how you'll use them to select your next car or truck.

Function: You need reliable transportation. But, reliable for what? What do you need the car to do? Almost any car will get passengers from origin to destination for most in-town trips. How well will it complete a cross country journey? Can it haul lumber or pull a trailer? How many passengers will it hold?

Safety: This is obviously a desired feature for a car. But, how safe is safe enough? Assuming you knew how "safe" each car was - given that the more expensive cars are generally safer -  how much are you willing to spend for safety?

Comfort: Air conditioning and heating are high on most people's list of required features in a car. What about heated and cooled seats? Leather? 

Aesthetics: For a large portion of the population the status of the car reflects the self image of the driver. Are you a mini van or a Corvette or a used pickup? Do you want a flashy red or a blend-in white? Brand choice may say a lot about what we want to convey about ourselves. Mercedes vs Hundai?

Economy: This element is often first to mind when considering value in "big ticket" items. Often, the first consideration is the purchase price. But, other components of economy are fuel and repair costs.  In the case of modern hybrid and electric vehicles a higher initial cost is (at least partially) offset by lower operating costs. But, some bigger vehicles cost more to purchase AND to operate. In that case, other elements of value are given substantially more weight.

Convenience: Is it easy to use? In the case of a car, does it have electric windows and standard transmission?  How about electric door locks, cup holders, a navigation system and a USB port for an MP3 player?

Availability: You really wanted that SUV in red. But, red was a special order item that might take weeks. So, you settle for white. Availability was more important than color.

So, how well do you know your target customer and what he considers valuable? How well do you cater to his most important decision elements? How well does your marketing message communicate the value that differentiates and makes you competitive?

Bottom Line: Survey your customers to make sure you know their value set. Then assess your business based on these seven criteria. How does that fit your customers and compare with your competition?

Posted by Peter on 11/22/2013 12:37:53 PM