As is known, every business needs a potential market, and every market needs to be tapped through a well-planned marketing strategy. Although, as everything else, devising a befitting marketing strategy is easier said than done.
The basic idea of marketing, lies in the popularly known “4 Ps”, which comprise of Product, Price, Place and People. While product, or services, remain constant, the other Ps are dynamic, and play a major role in the determination of the success of any new business idea. The place of sale of the product or service is usually guided by the industry that it belongs to. While an FMCG product like a detergent soap can only be sold at grocery stores, an electronic device such as a mobile phone can be sold at an authorised outlet, a shopping mall, a retail store or through an online shopping portal. Then again, more or less, every business has a fair idea of the demographics and other crucial details of the target consumers, which solves the people criteria.
What remains of the 4 Ps now is the “Price”. Contrary to the popular belief, the price of the product is not just a simple sum of the cost of production, the overheads and the profit margin. The price, if not always, in a significant number of cases, is also determined by the value that the given product or service creates for the end customer.
Let’s take the example of Levis, which has captured a substantial amount of urban Indian market, when it comes to apparels, especially denims. Even when every other brand offers almost similar apparels at considerably lower prices, why is that people are ready to shell all that extra money for a Levis Denim? The answer lies in a simple word, “Value”. Through its in-store experience, and the unique quality of its apparel Levis creates for its customers that sets the brand apart, leaving its close rivals far behind in the race.
However, there is something else that goes in the creation of value, which is beyond the measurable entities. It is the level of esteem that one derives from owning a given product. Let’s say a person is wearing a watch. In normal circumstances, nobody would take notice. But if it is a Swiss watch or better a Rolex, then people will pay attention. In fact, the image of the carrier of the watch will rise manifolds in the eyes of the people. This is the magic, a product can create. And it is this magic, which is called “Value”. Same can be said for an electronic device such as an iPhone. In spite of tens of brands and hundreds of varieties available in this segment, the buzz for the latest iPhone almost always manages to tip something as widespread as an epidemic, that too in no time.
In most of the examples, the concept of value creation comes up with respect to products which appeal to the upper economical classes of the society. But, this may not always be true. Let’s consider something as simple as a soft-drink! Not once does a person think before buying a 10 Rupee bottle or a 20 Rupee can of his favourite cola. And it is a very well-known fact that the cost of production of these drinks is as low as 20% of the price they are offered for. In this case, as well, the consumer is concerned with the value that the drink creates rather than the price at which it is offered.
This value creation has become important, more so in the recent times, when a wide market like India, is accepting goods and services like never before. However, in today’s world, consumer is the king. He is not just more educated and better informed, but is also highly connected with the other consumers that have similar demographics as his own. If he is happy, he has the ability to take a product to places. If he is not, even big projects with humongous amounts of money involved can go down the drain, in a day’s time. Moreover, the buying capacity of people in general is on a constant rise. At such a golden time, if it may be said so, it is the onus of genuine and innovative brands to tap the potential market using the immensely charismatic tool of value creation. Though, there has never been a fool proof formula of creating value, but yes, it can be achieved through meticulous planning and careful consideration of the market dynamics.