Richard van Hooijdonk

Think about a unique product proposition!

It's not always easy to change or improve our core product. And yet, we need a product proposition that differentiates us, to get one up on the competition. At my seminars, I often show powerful examples from IKEA, whose 'Billy book cases' sell in huge numbers. IKEA supports its core product with the IKEA Club community, a restaurant, playpens for kids, excellent delivery and montage services and a keen stock policy.

The customer is happy and perceives IKEA as offering very complete service packages at very reasonable prices. They barely notice spending lots of money on the family lunch, extra furniture and its montage or the delivery services. That's the key secret that has hundreds of thousands of people enjoy their weekend visits to the Swedish furniture giant, it's the key secret to IKEA's ever increasing customer value. Having discussed the example of IKEA, it's your turn to develop a unique product proposition, developing it using four different elements.

The first element is having a strong core product. This product can be expanded with the second element: modules or add-ons, allowing us to enrichen the product and raise customer value. The third element is to couple online services to the core product. These online services support and differentiate the core product proposition. Fourth, there's the element of extra's: presents and other incentives for your client to make that final purchasing decision. When developing your unique product proposition, you can use the MarketingMonday Proposition Model. I'll cover this model in one of our future publications.

Idea Exchange: succesful portal for bright ideas

Two years ago, supplier of webbased CRM software SalesForce launched Idea Exchange. On this website, consumers submit their ideas on how to improve specific products. These ideas are then ranked by fellow users who click on the promote-button. By voting on ideas they value, popular ideas are ranked higher.

 

The portal SalesForce has set up has been running succesfully for a while now, giving the company the opportunity to study the trends and results. One of their observations is that ignoring popular ideas has an outspoken negative effect. To prevent damage to their image, companies must act on popular suggestions from Idea Exchange.

 

Co-creation is on the rise but it's still not easy for a brand to portray transparency, openness and involvement. Idea Exchange gives consumers a voice that can be heard, bringing producer and consumer closer together. This also increases customer involvement with a brand. Idea Exchange is apparently a good idea: a clear example that brands would do well to follow.

Brand value and brand equity essential to healthy brand strategy

The long term value of a brand, brand equity, has direct added value for a company's financial results. Consider brand equity the water level of a lake. It's a supply of cash flow that's been acquired, but cannot be found in the financial results.

Besides brand equity there's brand value. Brand value is the value a brand offers a client with every product or service he buys. In this case, value can be considered the properties customers appreciate in a product or service. Every service and every product contains certain measurable or unmeasurable qualities, such as warranty, delivery services (very measurable), trust or image (less measurable). All the aspects that differentiate a product or service from its competition, form the brand value. As such, brand value is the sum of all product properties, sales channels, pricing and brand equity. This sum of brand values plays a key role in customer decision processes.

To gain insight in the status of a brand, the relationship between brand value and brand equity can be shown graphically. That way, the added value of every unique element can be found. With such a graphic outline it's much easier for companies to form a healthy brand strategy.