The value map is an analytical tool enabling managers to position their products based on their price and perceived benefits compared to competition.
Value mapping is crucial when the economic value of a product (see Economic Value to the Customer or EVC) is impacted by non-economic factors.
As a matter of fact, when selecting a product, rational buyers compare its benefits to associated costs, and buy the product that offer the most benefits at the lowest price.
Nevertheless, buyers often have to make pricing decisions without having all the factors in hands to assess accurately the economic value. In addition, they make decisions by taking into account non-economic factors.
The concept of value mapping is to relate the perceived benefits of competitors’ products against their prices as shown on the following example.
Basically, all products above the fair-value line are priced above what they deserve, and all products below the faire-value line offer a better value for the money spent.
- Understand how customers perceive products
- Explain and predict market share evolution
- Immediately view of your product competitiveveness