Abstract
The economy has plummeted over recent years. Managers, business bureaucrats, and even retailers need to keep on finding new ways to keep their businesses alive. Consumer behaviour has greatly changed due to unforeseeable economic trends. This has seen the concept of value coming into play. Hard economic times call for stringent measures. Economists have stressed the importance of understanding the true meaning of value and the relationship between consumer and products value. Consumers trust value when judging the quality of a product. This calls for better quality management options when pricing a products real value. Different commodities have different values to different consumers depending on their cultural and behavioural affection towards the product thus making the option of valuing products crucial. This may further be elaborated by subjective and objective opinions of consumers when it comes to valuing commodities. Marketers must be able to differentiate the two and follow a more objective approach, which they can easily convey.
Consumers do not need to buy cheap commodities but have to buy on the grounds of consumer value, that is, the gap between the company’s product benefits and its real price portrayed by the marketers. Value maps have started gaining wide audience from economists and managerial staffs who opt to reverse the situation concerning marketing. This is a new strategy, which helps assess consumer behaviour thus aiding marketing firms set balanced price points. In addition to this, a company can gain other side benefits from practicing disciplined value management practices. Improved market performance, profitability and sustainability are just but a few of them. Making a profit is no longer the issue, but setting appropriate product values has emerged as a tremendous step towards the marketing of products.
Analysis
Marketing is a trade process which tries to integrate a mix of different business plans to enhance profits, market share and consumer loyalty. The process helps create appropriate relationship with consumers to benefit both parties. Corporations have come to realise how the process can be applied through different strategies such as advertising, consumer relationship, price, product development and promotional strategies among others. All these strategies are based on one common factor, that is, customer needs satisfaction. This paper seeks to discuss the concept of value as a marketing strategy and the, misconceptions that are involved with its application in the marketing sector.
Value in the market means the ration of the total benefits attained from a particular product and the total cost bared to purchase the same product (Panda, 2007). The significance of value in marketing is that, it offers necessary information, which helps in determining the value of a property in an open market. Furthermore, it enables stock certificate owners determine the value of the stock and make a decision on whether to sell them or not. To understand what value entails, it is important to understand the following terms, which are related.
- Price-Point
This is an economic term, which involves the relationship between retail prices of a commodity and how consumers relate to it. This has made companies who produce products for retail sale and retailers interested in such good become more cautious (Marn & Leszinski, 1997). High price points make demand of goods to weaken thus rendering a loss on the retailer, but once the prices are fairly balanced, for example, lowered, Bulky retailers often benefit from a collective profit rather than individually. Standardization of prices is one effort, which is tactically employed by retailers to attract consumers.
- Cost Benefits
Marketers carry out a cost benefit analysis to determine the likely scenarios that would take place in the dawn of a new product being released to the market. This helps justify the value of the product when it finally is released for consumer consumption. Value can shift consumer’s behaviour and consumption rate if not well attended to (Albaum & Smith, 2004). If a company creates a huge sale cost for its products, the willingness for consumers to purchase them will reduce (Ronkainen & Czinkota, 2007). This helps marketers attend to all the rules of cost benefit analysis in order to set the right value on their brand.
These two concepts of value are a stepping-stone towards correcting the vaguely misunderstanding concept of value. Value pricing has commonly been regarded as a substitute for low pricing (Pride & Ferrell, 2011). The real concept of value lies on the transaction between benefits acquired by a consumer from the product and the price he or she paid for that same commodity.
Another huge contributor that has led to the misconception concerning value is that, marketers fail to adequately invest on analysis and assessment of their commodity to find out its true value before introducing it to the market. This brings about poor pricing techniques that are inferior to other competing marketers (Marn & Leszinski, 1997). Furthermore, ignoring the dynamism behind fluctuating price and benefits relationship usually haunts the value of a commodity in the market. These are some of the factors, which managers have poorly looked upon when valuing their products.
Marketing includes more than just advertising and promoting business ideas to improve on profits. Business Cooperation’s have to carefully analyse the importance of their products in the market. The best way to do this is by creating a value assessment strategy, which is vibrant due to the increased globalisation trends. After all marketing involves integrating different mix of ideas and proposals
References
Albaum, G & Smith, S. (2004). Fundamentals of Marketing Research. London, UK: SAGE Publishers.
Marn, M & Leszinski, R. (1997). The McKinsey Quarterly Report: Setting Value Not Price. Mkqpreview. Retrieved from http://mkqpreview1.qdweb.net/PDFDownload.aspx?ar=213
Pride, W & Ferrell, O. (2011). Foundations of Marketing. Mason, OH: Cengage Learning.
Panda, T. (2007). Marketing Management (Second Edition). New Delhi: Excel Books.
Ronkainen, I & Czinkota, M. (2007). International Marketing. Mason, OH: Cengage Learning.
Verma, H. (2007). Services Marketing: Text and Cases. New Delhi: Pearson Education.
