Friday, August 14, 2009

"Value for Money" Product Strategy

In the 1930's Procter and Gamble and Kellogg's invented the "value for money concept". They've continued to develop their product strategies around the only three possible B2B or B2C behavioral market segments that exist:
  1. Effectiveness shoppers want to do more with the same resources
  2. Efficiency shoppers want to do the same with fewer resources
  3. Economizers want to do less with far fewer resources
Since then America's economy has had so many growth niches, that many companies have been able to thrive with a variety of self-centered pricing strategies i.e. skimming, penetration, customary, etc. Our new economy has changed all that, so companies that do not directly address one of the three value-for-money behaviors will fail.

As we continue evolving toward the new economy, all buyers will be fully entrenched into one of these behaviors - but on an opportunity by opportunity basis, not for all of their purchases.

So, if a company is not able to address sales opportunities in this fashion, it will not be ready for the different colored light that is now visible at the end of the tunnel.