Value marketing is a marketing approach that pre supposes that people make purchases because they view an inherent value in an offering. They see the value of the offering as being higher than the value of the money or time they have to give in exchange for the offering. In other words, we will only make a purchase if we feel that we will come out on top in the end. People don’t want to end up even in the exchange, they want to enjoy a net profit from the exchange. In order to create and enhance the value of our offerings we look into four key areas; creating value, exchanging value, communicating value and delivering value.
What about the four Ps of marketing?
Most business people can recite the four Ps, product, price, promotion and placement. And at first glance that seems to be a pretty good template for marketing success. The four Ps rely on a few outdated conventions and don’t take into account business goals that are made possible by new technology. For example, let’s look at Product. The idea of developing and defining a product starts to fall apart when you provide a service rather than a tangible product. There is also the case where a business is looking for an interaction (share, like, comment, etc) on social media rather than handing over a product for money.
Creating Value in Marketing
Creating Value is where we define how the customer will benefit from doing business with us. In some cases this will be centered around a product, other times it will be a service, and at other times it may be centered around a reputation exchange. Part of creating the value is setting the price, whether that price be expressed in monetary terms, time investment or even an email address. Creating value is one of the areas where marketing cooperates the most with other departments in a company. It may take engineers to create a product, shipping will look into receiving the raw components and logistics for roll out, accounting tallies the total cost, etc. Regardless of what the other departments put into a product, it will be marketing’s job to make it have the value it needs to appeal to the masses.
Communicating Value
The Four P model has promotion as one of it’s components. Promotion suggests a one-way communication model. A company puts up signs, buys airtime on TV or radio, or sends out a mass mailing. With the advent of social networks, discussion forums, bloggers, and vloggers the one-way communication style does not work. Now communication has to be both ways. Snack food companies are starting to ask customers for flavor ideas, letting people vote on flavors gives them a sense of ownership, which inherently grants value. Fast food companies are becoming social media stars, which creates a sense of kinship with their customer base.
Exchanging Value
In most cases people exchange money for a product or service. But as mentioned above there are times when a company will want the customer to give them something else instead of money. Have you ever bought plane tickets with frequent flyer miles? Then you exchanged value with the airline without using money. You “bought” airfare with your loyalty to their brand. Businesses are seeing more and more value in information, so they are willing to trade a product or service in exchange for a person’s contact information or a social share or like.
Delivering Value
Today deliver value is much more than simply handing over a product or completing a service call. Buyers want to know that the product will be delivered quickly, so shipping becomes part delivering value. Buyers want to know that they will get support in learning how to use a product and that they will be protected if the product fails for some reason. Some buyers buy things because they feel that their purchase will make them be part of a community or movement. The company must consider the full value of their offering and make sure that the buyer gets it.
A New Wider View
In the end Value Marketing is a wider view of doing business, it’s part science and part art form. It takes more thought and more dedication than the “old” way of doing business with the four Ps, but the rewards are also much greater too. Tetravive can help you use value marketing to increase your company’s profits and to drive out competitors who aren’t as savvy. Get in touch with us to start getting the help you need.