One thing many people overlook is the psychology of Price and how different pricing structures say different things.

I have a free eBook called Pricing for Profit at

http://www.philsforum.com/pdf/Pricing%20for%20Profit%20Freebie.pdf

Feel free to download it, share it, use it. We have been using these techniques profitably for years.

To the women buying the services or the product, price is relevant because she is likely on a budget. But, women of substance (find them, they exist, they are all powerful) consider quality and price and they opt for quality most of the time. If I had a nickel for all the times I rushed through a store and bought on price (not taking time to consider quality or value, as you say Michele) and then…a month later, had nothing to show for my purchase, I’d not be rich, but I’d have enough for a really nice weekend in NYC!

And, as you’ve pointed out – we’re different types of customers at different times for different things. For example, I buy my reading glasses at the dollar store – since I leave a trail of them everywhere (and no “value” statement is going to change that.) On the other hand, I just spent a large sum of money on tires for my Jeep – the value is that: they’re the “best” (rated by Consumer Reports) and will serve me well for years. I DIDN’T make my buy decision on price.

As for the books – The big boxes are doing that to attract people to buy other things. A hardcover (these days) is a luxury item; those buyers are far more likely to buy something else while they’re there.

My expertise is home furnishings. Over 80% of the purchasing decisions are made by women.

Price has been, is, and will always be a real concern in the purchase cycle. It’s dead wrong to think otherwise.

Company wide training focusing on PE (personal experience) is a way to change the value equation.

Here is how it works, the factors:

PE- personal experience
P- price
V- value

PE-P=V or PE>P=V or V=PE-P

This formula is explained easily to retail employees throughout any organization.

Simply stated, when the personal experience exceeds the price you are asking value is created.

When value is created MONEY MOVES.

Unfortunately many retails believe the only way to create VALUE is to lower the PRICE.

They often forget increasing the PERSONAL EXPERIENCE will have the same effect and create larger profits.

Does your new product solve a problem that beer drinkers (or maybe non-beer drinkers) have? Are they willing to spend money to buy your product to solve that problem? How much? And what’s the total cost for them to change…not only in dollars but in non-financial dimensions? Will they pay all the costs required to enjoy your new product?

I think too often we rely on our perceptions as owners and managers as to what the customer needs and/or wants and will pay money to have.

Do you have a group of “consumer advisers” or can you do research to find out their needs? That will lead you to the best value propositions.

In about 6 months we are going to release a brand new beer, so I wonder.
Does anyone have suggestions for value propositions with regards to canned beer?

This is a hot topic with the small business owners I’m talking with these days.

In today’s economy, the value discussion often defaults to “low price.”

My research brings me to the conclusion that there are three kinds of value propositions that consumers recognize: 1) lowest prices; 2) never-ending product innovation; 3) customized, unique customer service and experience.

Wal-Mart’s value proposition is lowest prices. They will never be known for product innovation or outstanding customer experience.

Apple never offers the lowest prices but they’re well known for never-ending innovation and product superiority. That’s their value.

Zappos and Nordstrom’s are known for their outstanding customer experience, not low prices or superior innovation.

I think the key issue here is choosing the right one for your business. If you’re up against a Wal-Mart type, you probably shouldn’t choose the “lowest price” value. They will kill you.

While you have to keep at least one eye on all three, the key to success is choosing and becoming known for the right value proposition, and that choice depends on your market and the business environment you’re in.

Where’s the “Value Void” in your market?

I think the answer to that question will help small business owners define their winning value proposition.