November 21, 2008

Of Market Research - II

All this while, doing market research, if you have been hunting answers for the "what-the-customer-wants" question, I can give you the answer. Here it comes. The envelope please...

Your customer wants a superior product that delivers unique benefits and excellent value.

Simple, huh? Let’s look at the word value.
Value is a function of the benefits, features, and quality that are built into a product versus the price of the product. The more benefits, features, and quality a product can deliver at a low (or reasonable) price, the more value the product has.

“… the more value a product has” Actually, that perfectly-reasonable sounding phrase is misleading. A product does not so much have value as the consumer perceives value in that product. It would be quite convenient if you could simply pour value into a product as you pour a few litres of oil into your car. But value is not an absolute quantity. It is relative. It is a perception.

The fact is, no one knows value. Only the customer knows it. (At least he knows it sometimes and about some things. It is actually more a perception, a feeling, a sense.)

A nice-PM understands that during market research, it is his job to find out what the customer defines as value in a particular product or a class of product. Some questions that our nice-PM needs to ask that relate most directly to his products value would be:
1. What do you look for in product X?
2. What criteria go into making your investment decision?
3. How important is performance and robustness to you?
4. How much are you willing to pay for high performance and robustness?
5. What tradeoffs are you willing to make to save money? What features or levels of performance are you willing to live with to save money?