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VALUE, you can't and never could get the most for the least.

Recently, while awaiting the departure of my flight out of a large Midwest airport, I could not help but overhear a closeby conservation between what had to be a salesman and his manager. The discussion was apparently about a sales call the salesman had made earlier that day. The manager had asked the sales fellow how the presentation had gone. "Fine. Great," the salesman said. The manager echoed, "Great. Did the customer understand the differences between our product and the competition, especially our quality and performance advantages?" "Absolutely," answered the salesman. "Do you know if the customer sees good benefits from those differences?" the sales manager persisted. "Yes. Definitely. They even named several of them before I left and seemed very pleased that we could perform at that level." "Do you know how we stand on price?" asked the sales manager. "We're higher," the sales fellow replied. "How did you leave it?" the sales manager asked. "The ball's in our court...they said if we can match the price of our competitor, we've got the order," the salesman said. There was a rather long silence before the sales manager replied, "If these people really understand the differences between what we're offering and what the competition is offering, it looks like you've probably succeeded in differentiating our product okay. Unfortunately, you have not yet established the value of our product relative to the competition...and until we do that, we won't take the order." More silence and the sales manager added, "It usually costs more money to make a product that's of higher quality and works better than its competition. You need to remember that. "It's related to that old cliche' 'you get what you pay for' and should be at the heart of your thinking on every effort you make to establish product value with your customers. If we were to take that order under the condition offered, we would, in effect, be saying that the competition is our equal and the advantages of our product, which these folks acknowledge to be of solid benefit to them, are of no real value, after all."

Even though those fellows spoke openly, I felt a little uncomfortable having listened to their conservation, so with an effort I resisted the strong temptation to see what they looked like. That being said, since then I have thought a great deal about that brief conversation because in the rough-and-tumble reality of today's business environment, incredible distortions, claims, counterclaims, and the like occur almost routinely, and it's very difficult for folks to separate truth from fiction and value from a slick hoodwinking. Ultimately, it is the value a person sees in a product, service, or effort which, above all else, drives the decision-making process...value must be established with the customer.

We happen to be in the food processing industry, but throughout this great country and throughout general industry, the question of value has begun to dictate the virtual restructuring of how we do business, the changes occurring in our political system and leadership, and in our everyday lives. People are looking for and expect value in the products and services they buy, from the leaders they elect, and in the relationships they build. People expect and are willing to expend resources in the form of time, effort, and money to obtain the value they want. Perhaps it has taken the exposure of things like the awful spectacle of the profiteering frenzy during the past decade where huge sums of money were made on deal-making, with virtually no enhancement to products or services, to awaken us to the value issue, but awake we're becoming! Actually, I think we're really re-awakening to the worth of value in our lives. Value, as sought by our forebearers was always important, but somehow the "least expensive," "the cheapest," and "the most economical" seemed to have replaced its worth for a time. I have begun to sense a return to the importance of value. Words such as quality, accountability, and pride are returning to the language of business; words which reflect superior performance, standing strongly behind your product or service, and a solid sense of satisfaction for a job well done.

Some time ago, pinned to wall behind the desk of a business associate was a sign which read, "Price, Quality, or Service. Pick any two." Sensing my interest when I first saw the little sign, we discussed its meaning for several minutes, arriving at the conclusion that what the sign meant to us was really a statement about relative value: it is what folks are willing to pay for or give up in a product or service that determines its ultimate value to them. Clearly, one cannot have the best quality, with the best service for the best price; not in today's business setting. Quality products derived from state-of-the-art research and development and the building of a customer support organization committed to total customer satisfaction is the result of investment and represents solid value to the clientele of that company. And value can be accrued over the long haul in the form of reliability, consistency, superior performance, both from the company's people and the products it offers to the marketplace; people and products you can rely upon.
COPYRIGHT 1992 Frozen Food Digest, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:relationship between price and value of a product
Author:Olsson, Claes
Publication:Frozen Food Digest
Date:Oct 1, 1992
Words:877
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