Value For Money Pricing Strategy
In
the 1930's Procter an Gamble and Kellogg's invented the value for money
concept. They continue to develop their product strategies around what
they consider to be the only three possible B2B or B2C behavioral market
segments that exist:
- Effectiveness buyers want to do more with the same resources
- Efficiency buyers want to do the same with fewer resources
- Economizers want to do less with far fewer resources
In
the prior economy companies matched the product lifecycle stage with a
variety of company-centric pricing strategies such as skimming, penetration,
customary, etc. In our new economy all buyers will be driven by one of these three behaviors on an
opportunity by opportunity basis, not for all of their purchases.
In order to be ready for the different colored light that is now visible at the end of the economic tunnel, successful companies must develop the competency for addressing the respective value-for-money behavior for each opportunity that enters their sales funnel.