Value - we hear and use the word all the time. But do we really know what it means? Do we know how to truly measure it? And how do we increase the value of our brand?
Below is a tutorial that answers all three of these questions.
WHAT IS VALUE?
Very often in business, we are confronted with the question, "What is value?" And just as often, the answer is usually, "I can't put it into words, but I know what value is when I see it." This is a dangerous way of approaching value, or any business question. If you can't articulate what value is, then you truly don't know what it is. If you don't know what value is, how on earth will you be able to increase it? And if you can't increase the value of your product, how will you stay competitive?
Simply put, value is the difference between a brand's benefits and its costs. We can represent it with the following equation:
Value = benefits - costs
So then, measuring value is as simple as measuring a brand's cost to the consumer, measuring the benefits, and subtracting. Simple, right?
It's not that easy.
While we can easily measure the costs - dollars, time, driving miles - we really have no concrete way of measuring a product's benefits. Benefit is a subjective and abstract concept by nature; attaching hard numbers to it is fruitless.
C. Whan Park is the Robert E. Brooker Professor of Marketing at USC's Marshall School of Business. He is co-author of a recent book on brand admiration, which blends years of best-practice thinking from academia with the real-world practice of marketing. He is internationally recognized as one of the most frequently cited researchers in the area of consumer behavior.