It’s value, not price

The amount of value meals being offered in the marketplace today indicates that the name of the game is value and not price. I have always advised entrepreneurs to avoid the price game. Under present economic circumstances, what is an overriding concern is "value for money" or what, in the vernacular, can be succinctly described as sulit.

There is a difference between sulit and mura. Cheap is mura. But mura is not sulit. Often, what is mura can be harang or robbery. In other words, something may be cheap but definitely not worth it. As such, there is no value for money.

A sulit state happens when the value of the product or service received by the customer is equal to the monetary value given by the customer. A harang state happens when the value of the product or service received by the customer is less than the monetary value given by the customer. A sulit na sulit state happens when the value of the product or service received is much more than the monetary value given up. The value of the product or service is compared to the needs/wants being sought after by the customer.

Be intimate with the customer

The sulit game cannot be played if the wants and needs of the customer are not known (a.k.a. customer intimacy). As previously discussed in this column, the first step is: Listen, observe, and understand the customer. What is important is that we understand and intimately know the customer.

Find the need-attribute fit

Secondly, the product/service attributes must fit the customer needs and wants. If the customer needs/wants is to relax, then the product/service attributes must assure the 100% delivery of the desired relaxation. If the customer needs/wants the product/service to be flexible, these must flex to the extent the customer wants. Choose, develop, source products/services that will meet the customer needs/wants. No more. No less.

On the one hand, a product/service that does not have the attributes the customer is looking for can never be made up for by a great marketing plan. On the other hand, a product/service that exceeds customers’ wants/needs is not all that good. If the customer is unwilling to pay for the additional cost of exceeding the needs/wants, the product/service is not going to be sulit for the entrepreneur either. What is important is that the product/service meets the customer needs.

Communicate with customers

After ensuring the product/service attributes and customer needs/wants fit, the next step is to communicate with the customer. Here, we must keep the three Ms in top of mind.

The first M is for the key message: Your product/service is the only one that is sulit while others are not comparable and must be perceived as harang. This message must be clearly communicated. Tell the customer about your product/service attributes that matter most to them. Tell them that the exchange value of your product/service attributes that meet their needs differentiates you from the rest.

Note that it is not enough to be different. Your difference must be the product/service attribute that will be rewarded by customer choice and, therefore, purchase. A product/service that is simply different and has no fit to customer wants/needs will simply be noticed but not purchased. The content of the message to the customer must, therefore, clearly convey that your product/service is sulit because it is the only one that can give the best value for money.

The second M is medium. The manner in which the message is communicated is equally important. It must be in a language the customer understands. To adopt customer lingo is to use words the customer uses and, therefore, understands. For example, if the customers are people who love basketball, it may be best to use basketball jargon. If the customers are high school students who are looking for a place to have a great meal with the barkada or gangmates, then use their lingo.

The third M is media or the channel used to send the message. There are many options available here. Some of the traditional tri-media approaches via TV, radio, and print may not give good value for entrepreneurs. There are many non-traditional channels today that may give better value to entrepreneurs such as direct mail, posters, leaflets, text message via cell phone, banners, fax, e-mail, and web page.

Notwithstanding these new modes, do not forget an age-old, tired and tested medium-word of mouth (a.k.a. the buzz). Even this must be differentiated further. There is the traditional uncontrolled process of just simply spreading the word. The other is a deliberate process of using "influentials" to communicate to the customers. Whatever media is used, it is important that the message is sent through a media that the customer listens to – to ensure that your message gets across effectively.

In summary, make sulit or value (not price) the basis of sustainable competitiveness. But this can only be done if there is customer intimacy and product/service fit. In addition, the perfect fit of product/service attributes with customer needs/wants must be clearly communicated to the customer in a language that is understood and via a medium that is listened to.

(Alejandrino Ferreria is the dean of the Asian Center for Entrepreneurship of the Asian Institute of Management. For further comments and inquiries, you may contact him at: ace@aim.edu.ph. Published "Entrepreneur’s Helpline" columns can be viewed on the AIM website at http//: www.aim.edu.ph).