Summary: In marketing, remember one of your goals is to optimise value. Just as competitors may have value creators that help them deliver better value, these can equally work against them when meeting other consumer value lines.
To illustrate optimisation of value, let’s look at Easy Jet’s buyer segment – what they want from the product of air travel is cheap prices above all else. The standard airways find it hard to deliver this because the segments they target buy based on other criteria.
EasyJet has to tailor its offering in the best way possible, and in ways that ensure it can deliver optimum value. This doesn’t mean succumbing to all customer wishes. For example, if consumers say they want free meals – Easyjet would have to raise prices significantly, which in turn would lower the actual value delivered to the customer because price is such an important factor to them!
You should never ever reduce costs at the expense of value to the customer, unless the payoff in price reduction is greater! Banks and foreign call centres spring to mind here. None of us seem to have benefited in anyway from what we have to put up with… which leads you to ask… who exactly has benefited from the cut costs? If you are going to reduce costs then the price savings you pass on must outweigh any loss of value.
Enjoyed this article?
Subscribe to our RSS feed, follow us on Twitter or just simply recommend it.
Further Discussion
Leave a Response
Make sure you enter the * required information where indicated. Responses are moderated so please no link dropping, no keywords or domains as names; do not spam, and do not advertise!