The Marketing Bureau


Specialist Marketing & Communications Resourecs

07

Jul

Have I Got A Deal For You!


By Brian H Meredith
From the NZBusiness Magazine"Marketing Maestro" Archive.
First published September 2002


Question: How many products & services do you, in your professional and/or personal life, choose solely (or even primarily) on the basis of price?

Answer:  I am pretty sure I am right when I speculate that your answer is “not many”.

 

Question:

Why is it, then, that so many products or services vie for your attention, interest and, ultimately, purchase, on the basis of price alone?

Answer:

Because, quite simply, a frighteningly large number of businesses simply don’t have:

An adequate understanding of the marketing concept

An adequate understanding of where and how “price” fits into the marketing mix

The faintest idea what the “marketing mix” is anyway

The ability to truly understand the real needs and wants of their customer and prospect base


The necessary understanding and skills to enable them to work with the value equation that their customers and prospects will (often sub-consciously) apply to their purchase selection processes and decisions.

The Result?

A marketplace that is flooded with price offerings that have little or nothing to do with the real value of the product or service solution being offered

A marketplace that is consistently sub-optimising its true revenue potential

A marketplace that, as a direct result of that sub-optimisation, is failing to properly invest in infrastructure, product development, Human Resource Development, Service, Safety  etc.

A marketplace that, as a direct result of that lack of investment, reaches saturation in its many sectors, sometimes slowly but always surely, with a resultant lack of new customers to feed on which then results in the sector beginning to feed on itself (which it does through even more intense price competition)

A marketplace that becomes a shadow of its former self with poorer quality offerings made to ever smaller & smaller segments of that market and the acceleration of a downward spiral of business performance, sector re-investment and consumer confidence and satisfaction in its dealings with that sector .

As this process continues, customer expectations are driven in an ever downward direction simply because they have come to expect less than satisfactory product & service performance and a certain fatalism takes over that means it gets easier and easier to exceed customer expectations because those expectations have been driven so low.

Think, for example, of how easy it would be to exceed a customer’s expectations of retail banking performance? And on the subject of retail banking, another question:

If the levels of service and overall customer care and relationship management were outstanding in that sector, do you think we would be subjecting every 10 cent charge to the critical scrutiny that we currently do?

We are facing an economy that is moving dangerously towards one where the Lowest Common Denominator prevails and where price dominates purchase decision making processes not because a customer has asked for it to be that way but because they have been offered no alternative on which to base those decisions; because the marketplace in which they are making those purchasing decisions has educated them to behave in that way.

It could be argued that The Warehouse, for example, has done great things for the New Zealand economy. But ask yourself– is that really true? Or has The Warehouse simply contributed to the further incursion of the Lowest Common Denominator into our national psyche? And has it, as many would claim, contributed to an overall social & economic decline in, most especially, provincial New Zealand,  through the decimation of the retail sector in those places?

The answer, in fairness to Mr T, is neither easy nor is it uni-dimensional. But the question is an intriguing and fundamental one. The Warehouse offers us all a bargain but does its’ dominance of the retail sector force us to live bargain lives? Or is the responsibility really that of the retail sector that has failed, to respond to The Warehouse with a truly competitive offering that is broader based in its market offering and customer proposition than price alone? Do we, as is claimed in the case of governments, get the products & services that we deserve?

The Solution?

As is so often the case, the solution lies in a greater understanding and application of sound, long-established marketing principles. Unless, of course, it is a fact that, as a colleague once commented to me “New Zealanders know the price of everything and the value of nothing”.

 

Brian H Meredith

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07

Jan

Have I Got A Deal For You!



By Brian H Meredith

From the NZBusiness"Marketing Maestro" Archive
First published November 2012 


Question:   How many products & services do you, in your professional and/or personal life, choose solely (or even primarily) on the basis of price?  

Answer:   I am pretty sure I am right when I speculate that your answer is “not many”.

Question:

Why is it, then, that so many products or services vie for your attention, interest and, ultimately, purchase, on the basis of price alone?

Answer

Because, quite simply, a frighteningly large number of businesses simply don’t have:

An adequate understanding of the marketing concept

An adequate understanding of where and how “price” fits into the marketing mix

The faintest idea what the “marketing mix” is anyway

The ability to truly understand the real needs and wants of their customer and prospect base

The necessary understanding and skills to enable them to work with the value equation that their customers and prospects will (often sub-consciously) apply to their purchase selection processes and decisions.

The Result?

A marketplace that is flooded with price offerings that have little or nothing to do with the real value of the product or service solution being offered

A marketplace that is consistently sub-optimising its true revenue potential

A marketplace that, as a direct result of that sub-optimisation, is failing to properly invest in infrastructure, product development, Human Resource Development, Service, Safety  etc.

A marketplace that, as a direct result of that lack of investment, reaches saturation in its many sectors, sometimes slowly but always surely, with a resultant lack of new customers to feed on which then results in the sector beginning to feed on itself (which it does through even more intense price competition)

A marketplace that becomes a shadow of its former self with poorer quality offerings made to ever smaller & smaller segments of that market and the acceleration of a downward spiral of business performance, sector re-investment and consumer confidence and satisfaction in its dealings with that sector .

As this process continues, customer expectations are driven in an ever downward direction simply because they have come to expect less than satisfactory product & service performance and a certain fatalism takes over that means it gets easier and easier to exceed customer expectations because those expectations have been driven so low.

Think, for example, of how easy it would be to exceed a customer’s expectations of retail banking performance? And on the subject of retail banking, another question:

If the levels of service and overall customer care and relationship management were outstanding in that sector, do you think we would be subjecting every 10 cent charge to the critical scrutiny that we currently do?

We are facing an economy that is moving dangerously towards one where the Lowest Common Denominator prevails and where price dominates purchase decision making processes not because a customer has asked for it to be that way but because they have been offered no alternative on which to base those decisions; because the marketplace in which they are making those purchasing decisions has educated them to behave in that way.

It could be argued that The Warehouse, for example, has done great things for the New Zealand economy.  (Or at least that could have been argued until relatively recently when its performance took a bit of a dive.) But ask yourself– is that really true? Or has The Warehouse simply contributed to the further incursion of the Lowest Common Denominator into our national psyche? And has it, as many would claim, contributed to an overall social & economic decline in, most especially, provincial New Zealand, through the decimation of the retail sector in those places?

The answer, in fairness to Mr. T, is neither easy nor is it uni-dimensional. But the question is an intriguing and fundamental one. The Warehouse offers us all a bargain but does its’ dominance of the retail sector force us to live bargain lives?

Or is the responsibility really that of the retail sector that has failed, to respond to The Warehouse with a truly competitive offering that is broader based in its market offering and customer proposition than price alone? Do we, as is claimed in the case of governments, get the products & services that we deserve?

The Solution?

As is so often the case, the solution lies in a greater understanding and application of sound, long-established marketing principles. Unless, of course, it is a fact that, as a colleague once commented to me “New Zealanders know the price of everything and the value of nothing”.

 

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