The Importance of Value Mix

( * - the word 'product' can be substituted to mean 'service' too; and vice versa )

Every consumer looks at maximizing value accrual while engaging in act of purchase of products* or services*. Marketing as a domain plays a very important role in influencing a purchase. This influence is aimed at convincing the consumer of the value inherent in the product or service they market. Post purchase evaluation is when the consumer evaluates in real terms the value that he/she derived from the purchase. This is when every company must score with the consumer. If it does not, the consumer moves on to a competitor's product or service. The success of a product or service lies in its ability to manage the value mix as seen by the consumer. Every company must be careful in deciphering the components of value as perceived the consumer and what is more important, is for it to understand the value component mix.

Value Mix

Every product or service when sold, delivers value from three perspectives, otherwise termed the dimensions of value, namely functional, economic and psychological. Every product or service is perceived by the consumer from these three perspectives. What is to be noted, however is that the quantum mix among the three dimensions varies from one product to another. In addition within a certain product category too, the mix varies from one brand to another. Consider the first difference in the value mix across products. All products that feature under the 'commodity' tag, tend to score heavily on the functional and the economic dimension. This is not to say that the psychological dimension is absent in commodities. Take the case of a commodity such as 'rice' bought for consumption. Do most consumers evaluate this commodity in terms of how good it is for cooking and how much they have to pay to buy a kilo? Sure they do! This is what might dictate their choice in terms of buying a certain category of rice. But is the psychological component completely absent in this purchase? Surely not. The choice of the store to buy the rice from, could be dictated by the psychological dimension that makes a buyer comfortable in a particular store. This 'comfort' could, for example be the perception of quality and customer service attached to a store, which could again be guided by the 'brand pull'. This could be one of the reasons why there is a beeline to buy groceries from branded retail outlets such as Big Bazaar and Food World ( in South India ). Though this psychological pull towards a certain store cannot be attributed, as a dimension, directly to the purchase of a certain category of rice, it certainly points to an indirect connection.

Consider the dimension quantum mix across brands in the same product category. A Reebok or a Nike shoe can sell for a sum of seven thousand rupees ( $ 160 ) in India, because the buyer in this case is evaluating the product from the psychological dimension. The quantum of this dimension in the mix ( for the branded shoe ) is high as compared to the other two. Similarly if the purchase were of the brand Bata, the dimensions that play a prominent role would be economic and functional in that order towering over the psychological dimension.

An understanding of the value mix is rather a necessity for sellers and marketers. This understanding has to be built for each market segment targeted. The design and development and the marketing of any product must be dictated by the value mix applicable to a certain segment. A flaw in this understanding can result in a faulty product design or even faulty marketing initiatives.

Functional Dimension

The functional dimension is about what a product or service does in fulfilling the utilitarian need that drives the purchase made by a certain segment. The utility provided by a product is driven primarily by product performance, ease of maintenance and servicing. More than others, products that are not differentiated and meant for the mass consumer need to deliver consistently on this dimension.

Economic Dimension

The economic dimension is the price of the product. The price for every product or service, must justify the value perceived. As a rule of thumb, for any product targeted at the niche consumer, the psychological dimension scores heavily in the value mix, and therefore will be priced on the higher side. The utilitarian value derived would be high, but would not be actively considered by the buyer during the time of purchase. The utilitarian value derived would almost be a default assumption. On the other hand any Mass Consumer product must be priced at lower or competitive rates, to provoke trial and purchase. Considering the product from a financial perspective, pricing, in most cases would be 'cost driven' for Mass Consumer products and 'market driven' for Niche Consumer products

Psychological Dimension

The psychological dimension decides the 'esteem' appeal of a product. Most of the products that lean on this dimension to influence purchase are highly differentiated with a unique selling proposition. These products use the 'positioning' tactic to create imageries that are unique and occupy a distinct position in the minds of the consumer. They are definitely brands! Whether they last long would depend on how well this positioning tactic can score with the niche consumer. If they last long, and can hold on to their position, they even become iconic.

Value Mix across categories

Goods and Services can be broadly classified into four categories, namely, Convenience, Shopping, Preference and Specialty. Each of these categories has a distinct Value mix that dictates delivery of value. For example, Convenience goods score heavily on the functional and economic dimensions whereas Speacialty scores in the psychological category. Every business firm must clearly understand the value mix as applicable to the products or services that they sell. This helps them come up with the right design of the product and the right marketing strategies to communicate the inherent value in them. This is a sure guarantee of business success.

http://www.alliancebschool.org

move in cleaning service Glencoe ..

In The News:

Fake airline texts claiming flight cancellations are targeting travelers with convincing scams. Learn how cybercriminals steal personal data and credit card info.

Discover how iOS 26's new Adaptive Power feature automatically extends iPhone battery life by learning your usage patterns and adjusting performance intelligently.

New TikTok malware campaign tricks users into running PowerShell commands that download Aura Stealer, which steals credentials and authentication tokens.

Gaia Family offers fixed upfront pricing for IVF cycles with unlimited embryo transfers and financial protection, partnering with over 100 U.S. fertility clinics.

The Jetsons Act aims to position Pennsylvania as a leader in advanced air mobility by establishing regulations for hybrid ground-air vehicles.

Fake Geek Squad invoice emails are targeting users with convincing charges and urgent phone numbers to steal personal information and money.

Fox News Digital's artificial intelligence newsletter digs into a robot in Russia that faceplanted, George Clooney's alarm and OpenAI's rivalry with the New York Times.

Major data breach at Conduent exposes personal information of 10+ million people. Government contractor hit by cyberattack affecting Medicaid, child support systems.

Texas startup Janta Power raises $5.5M for innovative vertical solar towers that generate 50% more energy than traditional panels while using just one-third the land.

NASA's twin ESCAPADE spacecraft launched aboard Blue Origin's New Glenn rocket Thursday afternoon from Cape Canaveral, beginning their journey to Mars with arrival expected in 2027.

Learn how to set email reminders on iPhone and Android so you never forget to reply again. Simple built-in features help you stay organized and on top of messages.

Discover how Apple's passkeys revolutionize Mac security by replacing vulnerable passwords with biometric authentication and encryption for ultimate protection.

New survey reveals 78% of parents fear AI scams targeting their kids, yet nearly half haven't discussed these threats. Learn why this dangerous gap exists.

Chrome now autofills passport and driver's license info automatically. Google's latest browser update adds official document support with encryption and user control.

Scammers impersonate Department of Veterans Affairs employees claiming veterans owe money, but real VA communications only direct to VA.gov or official channels.

The AltoVolo Sigma hybrid-electric aircraft flies 500 miles at 220 mph while operating 80% quieter than helicopters, featuring safety systems and compact design.

Google search scam alert: fake customer service numbers can give scammers remote control of your phone. Learn how to spot these traps and protect yourself.

Electric vehicles overtake gas cars in total CO2 savings after just two years of driving, with emissions benefits growing over time as power grids get cleaner.

Louvre Museum reportedly used "Louvre" as password for surveillance system during $100M jewel heist. Learn how weak passwords put even famous institutions at risk.

Bipartisan AI jobs bill from Sens. Hawley and Warner would require companies to report AI-related layoffs and hiring to Department of Labor quarterly.

Joe A. from Shelton, Connecticut, lost $228,000 to a ZAP Solutions cryptocurrency investment scam after his divorce, highlighting rising online fraud.

AI-powered autonomous trucks from Waabi and Volvo target U.S. freight driver shortage with Level 4 self-driving technology and NVIDIA computing platform integration.

Survive flight disruptions with expert travel tips: Book early morning flights, download airline apps and know your refund rights during service cuts.

Apple's iOS 26.1 update delivers major security fixes, performance boosts and enhanced privacy controls for your iPhone. Discover why updating now protects your data.

Russian hackers use fake CAPTCHA tests to spread dangerous malware targeting governments and journalists. Learn how to protect yourself from these deceptive attacks.

The Importance of Value Mix

Strategic Planning