To prevent margin erosion, marketingâs role (with lots of customer input) is to determine the right what we should be selling to the best whoâs; and how best we should sell at the right price.
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The more a product is differentiated along a dimension consumers care about, the higher price premium it can demand.
Gross margin doesnât get enough respect. Itâs bad enough that itâs stuck in the middle of the P&L and often gets glossed over. Itâs actually THE most powerful indicator of an effective sales team, a differentiated strategy, and real growth.
This means that finance, sales, or marketing shouldnât tell the product teams what to do. Instead, these groups can supply intelligence on what customer problems need solving, and what opportunities they see.
The good news (figure 1-9) here is that you have an advantage, but you're getting no return on it. We call it a waste wedge. You're investing in service features that your customers don't truly value, and it's not translating into profitability or market share. Your decision point: shift resources to attributes your customers value more, or get customers to care more about the things in which you excel. For example, our tap water was fine until bottled water made us want to drink from an obscure Swiss spring.
The good news (figure 1-9) here is that you have an advantage, but you're getting no return on it. We call it a waste wedge. You're investing in service features that your customers don't truly value, and it's not translating into profitability or market share. Your decision point: shift resources to attributes your customers value more, or get customers to care more about the things in which you excel. For example, our tap water was fine until bottled water made us want to drink from an obscure Swiss spring.