Main Point:
In short, this article shows how companies can continuously track their prices and products’ primary benefits to analyze their competitive position in the hypercompetitive market systematically. To do so, a price-benefit map has been proposed that companies can use to clearly see the relationship between prices and benefits and track how their competitive position change over time. This map presents a company’s products through its customers’ eyes and how it compares with all its competitions in the market. In fact, this map can be drawn by simply first defining the market, tracking the actual price the customers pay, identifying the product’s primary benefits, and plotting every product in the market with its price and primary benefit.
Lessons Learned:
The author has clearly depicted the importance of competitive advantages that over time become obsolete and need replacement due to innovations and rival’s products’ competitive position in the market. I have come to know how companies can easily and objectively launch new products or services with the help of a price-benefit positioning map and without conducting rigorous, time-consuming, and costly consumer surveys or other
subjective estimates that often delay the launch of a new product, furthermore, how companies can reduce the confusion of mapping the competitive position of their companies’ brand vs. rival companies’ brands.
Managerial Implications:
This price-benefit positioning has important implications for managers. It lets them stay competitive with the rival companies’ brand and let them see their own brand’s competitive position in the presence of changing price and benefits wars in the market. Furthermore, companies can easily judge their brand image’s importance to associate it with intangible benefits and premium prices they can charge from customers. Sometimes, with the help of this map, companies can locate a niche that is still less-competitive and less-crowded in the hyper-competitive market and thus create opportunities for them and anticipate counter rivals’ strategies by benchmarking themselves against the rivals.
Question:
How price-benefit positioning map help companies to beat the competition and charge premium prices in the presence of innovative technological solutions.
Ans:
As the technological breakthroughs are increasingly changing the competitive landscape of major industries worldwide, it has become somewhat imperative for much smaller and big MNCs to find some niche to create still the un-competitive place to charge premium prices before they become much crowded and less-profitable segments. With the help of a price-benefit positioning map, companies can gain greater insights into the intangible benefits of their brands and products; they focus on only those benefits to charging higher prices in the existing market. As we already know, consumer preferences keep changing, and these changes can now easily be tracked using this map. Thus, to win the competitive war, organizations can come up with only those benefits that appeal to consumers. Furthermore, they can also decide which benefit from excluding and which to include and what cost, so that organizational resources can be optimized and premium prices could be charged efficiently. We know that over time companies products’ intangible features become obsolete and less attractive to the target market, thus with the help of this map, they reposition and rebrand themselves to regain market share and win the competitive advantage in the market.
