CEOs - Remember Value Speaks Louder Than Prices

As CEOs, we often consider price discounts and sales to grow market share but, often, the opposite is what sells. As a graduate student at Northwestern University in the Medill IMC marketing program, I have studied the price to value relationship and found two articles you need to know about.

According to Maureen Morrison and Matthew Creamer's latest article How P&G, Ford and Wendy’s are Redefining Value from adage.com, those companies are trying to shift consumers’ perception of value from a product. The companies want to command premium prices for products which could offer convenience and high quality. The reason why they don’t choose the low price strategy again, because they’ve found value speaks directly and louder to what benefits a product or service could add to customer’s life. A good example in this article is Tide, a premium laundry detergent brand of P&G. Although its retail price is 35% higher than any cheaper offerings’ in Walmart, consumers still choose it when they find those bargain brands won’t offer the same effectiveness of cleaning clothes and they have to use three times of the dose of the bargain brands to reach the same effectiveness.

Another view of the Tide’s is from Jack Neff's Tide Pods Winning $7 Billion Detergent Wars By Redefining Value in adage.com, value means efficiency more than price. P&G innovative Tide Pods has already made a slash in a saturated new-product world where hits are increasingly hard to come by. They are the most expensive product in the laundry category but it has increased its sales without using any promotion. The successful sales performances have been contributed to the Tide Pod’s innovative technology and marketing strategy.

From these two articles, I have concluded three actionable recommendations for you to implement right now:

1) Technology Adds Value

Even in the tough times, consumers are still willing to pay for added value. Besides the cleaning efficacy benefits from Tide’s Pod’s innovation, the repackaging of its detergent into one-pack-per-load pellets is a smart technology innovation and benefit to the consumers because they help to avoid the messy measuring.

2) Quality Differentiates

Consumers would pay more because they can’t find the substitute for the same high-quality product. Greek yogurt is expensive than standard yogurt, but people would like to open their wallet a little bit more because of its higher levels of protein. In this case, value doesn’t mean the cheap yogurt. It is the premium yogurt, which will make you feel more healthy and live your life better.

3) Offer Convenience

In the laundry industry, we already have the liquid and power detergent. But Tide Pod’s has brought a new category in it-unit dose. They offer convenience to college students and apartment dwellers who need Tide’s Pod’s most for its convenience. The new target group would like to pay more for the convenience purpose.

Innovative marketers must have good insights of what their consumers need and how they could offer more added values to charge more. We can’t always be involved in the rug of price war in the long run, which seems to increase the sales volume in the short run but downgrade the brand value in the long run. We should take good advantage of technology innovation and product quality improvement to retain the old consumers and attract new ones. Being consumer-centric and valuing the customer experience are both important in today's marketing world. 

Jin (Jerry) Zhu is a M.S. Candidate in Integrated Marketing Communications at Medill, Northwestern University. Her three-year experience was in product and branding management in fashion and luxury industry. Her focus is on brand strategy and marketing analytics. She will be graduating in December 2013. Follow her @Huaijerry

Digital Detox: How Brands are Helping Hyper-Connected Consumers Unplug

How can brands best connect with customers today? Try turning on the digital “off” switch. That’s right—as a chief brand strategist, help your hyper-connected consumers unplug from their frenetic online lives. Enter the digital detox. There is a growing worldwide trend in which consumers are moving away from being digitally hyper-connected, i.e., always being “on,” because they want better online/offline balance in their lives. Brands that can help consumers achieve this balance by seamlessly integrating opportunities to digitally detox will benefit by generating positive affect and loyalty toward their brands. As a Medill IMC graduate student at Northwestern University who interned this summer as a brand strategist at the renowned global communications group Havas Worldwide, I have firsthand experience in identifying consumer trends and using insights to shape advertising campaigns.

Image source: Arbol

Surprisingly, 77% of consumers believe that time spent without gadgets and technology would help liberate them, improve their relationships and make them better people, according to Mashable.com. A recent AdvertisingAge article by Emma Hall highlights brands that are harnessing the digital detox trend through campaigns that inspire consumers to spend more time offline, strengthening relationships. In commercials for McDonald’s Arabia by Leo Burnett Dubai, the brand stresses “family time forever” by eschewing emails and smartphones and deems Sept. 28 “a day offline.” Similarly, Chivas Regal’s “Here’s to Big Bear,” a short film by Havas Worldwide London, tells the story of a loss of cellular and WiFi reception at a secluded train station that spurs an adventure among friends, creating lifelong memories for all.

Even technology and hospitality brands are embracing the digital detox trend. A Forbes article by Judy Abel published earlier this year mentions a variety of tech products that are, ironically, helping consumers unplug. For example, Freedom, a $10 app that disables Internet access on both Mac and PC platforms for as long as eight hours, helps consumers resist the urge to always be connected and inspires offline living and productivity. Travel destination St. Vincent and the Grenadines offers guests digital detox vacation packages and goes as far as mailing guests a guidebook prior to their visit that explains how to vacation without technology and offering an on-site life coach to counsel guests on how to break free from a technology-controlled life.

As a chief brand strategist, here are three ideas you can adopt so that your agency clients make the most of the digital detox trend: 

1.     Check in to Unplug. Craft campaigns for service brands that underscore creating “unplugged” memorable experiences with loved ones, such as hotels offering guests the option to “check in” their gadgets and tech devices at the beginning of their stay.

2.     Step Away from the Screen. Advise brands to offer promotions that encourage consumers to enjoy experiences offline, such as discounts to restaurants or museums (provided that the deals are a strategic fit with the brand’s essence).

3.     Resist the Urge to Push. When creating apps for brands, reconsider executions that center around push notifications and alerts; that is, apps should be as least digitally intrusive as possible given the trend of hyper-connected consumers needing to “recharge” and to feel more in control over their online media consumption.

Brands across a variety of industries and across the globe are helping their hyper-connected consumers unplug by facilitating and encouraging meaningful offline experiences. "Recharge, reconnect, refresh" is the new mantra for brand strategists.

Maegan C. Paniewski is an IMC graduate student at Northwestern University’s Medill School of Journalism, Media, Integrated Marketing Communications where she is pursuing a concentration in Brand and Advertising Strategy. She is an experienced creative director and photographer and enjoys running and practicing yoga. Connect with her on Twitter @mlotusdesign and LinkedIn.