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| Dec 13, 2004 6:34 pm |
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re: re: re: re: Unique selling propositions are not strategic |
Jim Masen
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Mary,
Wal Mart advertises price, but it really is focused on having a product available in sufficient quantities and it almost doesn't care what the product is. If they can't get Dr. Pepper at the price point they want, they'll substitute Dr. Bob and use their merchandising skill to get that off the shelves. I am not underestimating the importance of price, but understand how Wal Mart works. Wal Mart is rarely the lowest cost provider when consumer costs are appropriately calculated.
Oh, I do not need or want an emotional relationship with Gillette. I'll take any razor that preforms adequately, priced fairly, and distributed seamlessly and easily.
I think you misunderstood my statement about costs and price. If the market will only bare a 5 cent item and it costs 10 dollars to produce, then I believe we both will agree the product will yield a net loss. I mentioned it was a chicken and egg scenario, because it's difficult to say which should come first. Oh, hot brands can be sold rarely at below cost for any length of time (e.g. market penetration strategy).
Your Fadsofwizards site was interesting. The only part of the transactional versus relationship dichotomy that I didn't see much about was utilitarian expectation of the product or service. I understand there is only so much they can discuss in a limited amount of space. I think it's fair to repeat the article's final words that a product/brand manager needs to understand whether their customers view their services as transactional, commodity, or worthy of forming a relationship. This is even truer in an increased Buyer Beware legal, ethical, and political environment.
Jim
> Nancy Fraser wrote:
> Jim,
>Everything is not emotionally drive.....brands are emotionally driven. You can't form a long term relationship with a customer who is motivated on price alone, unless you always sell at the lowest price. Wal-Mart's, so called loyalty, is based on their pricing strategy, you talk about that in your response. This holiday season Wal-Mart decided it would not cut the price on some key, hot items. It's been all over the business news that their sales after US Thanksgiving were lack lustre. They have restated their earning expectations. Others cut the price on those items and got the sales.
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>If you build a brand on a certain premise and are not true to the brand, consumers won't trust you. Brand loyalty is based on the trust that you are going to be consistent day in and day out; that the consumer knows what their experience will be when they do business with you.
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>See today's Monday Morning Memo from www.wizardofads.com for an explanation of transactional and relational shoppers and the value of each.
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>Your statement that production costs can't be too high or no one will buy the product assumes that there is a set relationship between production cost and sales price..there isn't. An examination of brand name production cost in relation to sale price and off brand production cost and sale price puts an end to that argument.
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>Hot brands are sold at whatever the market will bear and one person's reasonable price has no relation to what another considers reasonable.
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>Please do not read into this that I think prodcution cost is unimportant, because I am definitely not saying that.
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>Nancy
>Nota Bene Consulting
>www.notable-marketing.com
> Private Reply to Jim Masen (new win) |
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