Innovating ‘Value’

The significance of the term ‘value’ when considering marketing cannot be underestimated and signifies the association in the mind of the prospect organisation of the vendor’s 'total marketing offering' against its cost and will most likely be compared to similar direct competitive offerings as well as some indirect offerings in the marketplace. The key term here is ‘total marketing offering’ and implies that it is not just the product or solution itself which will be judged but the reputation of the organisation, the methods of engagement before and after the sale as well as the product/service benefits.

What typically tends to happen however is competitors tend to try to match or beat their rivals and get caught up the benchmarking trap. As an example, this could propagate itself as the addition of even more product features. But such strategies in themselves only seek to drive the typical ‘me too’ strategic convergence rather than truly create truly differentiated offerings that are deemed of superior value to end consumers. What actually ends up happening is that competitors create offerings that, on the surface, have more similarities than differences. All this does is make it more difficult for the buying organisation to comprehend what make your organisation unique.

Well that is the symptom and diagnosis. What then is the remedy? Kim and Mauborne pioneered the concept of 'value innovation' whereby you examine radically what constitutes real value for customers by asking fundamental questions such as:

What factors should be reduced well below or eliminated from the industry standard (because they do not constitute real value for customers) and
what new factors should be created or raised well beyond the industry standard.

The point of such an analysis is to look at all the elements of the product, service and delivery process and challenge previously held assumptions of what real value means. It actually implies bypassing the traditonal way of competing against your rivals and looking at the world through a different lens.

The suggestion is organisations should look at additional frameworks to think out of the conventional wisdom and look across substitute industries, across strategic groups, across complementary product and service offerings, across the functional-emotional orientation of an industry and even across time. If you can relate to this topic and see competitive convergence in your chosen space, I highly recommend you read the article below:


http://harvardbusinessonline.hbsp.harvard.edu/b02/en/common/item_detail.jhtml;jsessionid=QFL0W2MLDFHMIAKRGWCB5VQBKE0YOISW?id=R0407P&referral=7855