I have the incredible opportunity to manage a technical product line for my company. From a sales perspective, technical products are kind of cheating. They make it very easy to sell based on value. That’s because the technicality of the product can become the value proposition. Which is great for me, because I love to educate my customers on why my product will be so valuable to them.
Below are ten reasons why I love selling products based on value: Continue reading
How much does a premium latte actually costs the neighborhood shop down the street to make? What about that national chain of coffee shops we all know and love? Most of us probably don’t want to know the answer to that question. We might find out just how much money we are giving away each year.
As we have seen, there are a lot of different costs we might be talking about. These include fixed costs and variable costs. Buried in those are even more costs that our accountant friends love to talk about. A person can get rather dizzy trying to sift through all the different ways a company can look at its costs. Continue reading
Pricing related to supply & demand
The graph to the right is the standard relationship between supply and demand. What I hope you will notice is that as price increases, the quantity of units sold decreases. The opposite is true as well.
So, if you are BMW, you can’t expect to sell as many vehicles as Ford while maintaining your high price. And if you are Walmart, you can’t expect to sell at the high volume you currently do if you raise prices. Continue reading
A friend and I were working together this last week on a business plan he is putting together for the company he works for. He is taking at look at bringing a few new products into the market he currently serves. So we were talking about typical business model topics like his value proposition and mission statement. The issue that really started getting me excited was trying to figure what his potential product quality and price points were going to be. His proposal depends heavily on understanding these two pieces and how they relate to the competitions strategy. So I wanted to use this post to share some of the takeaways from that conversation.
Calculating the break even point is one of the most important concepts that business owners, entrepreneurs, and general managers can understand. This is because the break even point is when you transition from operating at a loss and actually start making a profit, which is the goal of every business.
The very first question to ask is what are we trying to sell? A service, a product, or a mix of products and services? For this example we will be assuming a very simple product offering. We are going to imagine that we are opening up a coffee shop that only sells lattes. You will likely have a mix of products and services that you will want to analyze. If your cost accounting is accurate, then you should be able to determine the break even point for each product and service you offer. Continue reading
Back in the winter of 2009 I experienced one of the highest points of my life followed a week later by one of the lowest. The high point was when I married my favorite person in the world, my beautiful wife. We celebrated our honeymoon in sunny Mexico and then headed back to another cold winter in the Sierra’s. The honeymoon really ended when I walked into work the following Monday to find out that I had been laid off due to the recession.
The next six months were some of the most humbling of my life as I searched unsuccessfully for a job. All the while my new wife supported our small family. I can safely say she did not marry me for my money, because I didn’t have any for the first few years. Continue reading
Ask anyone who has ever been involved in a start-up, there is no such thing as titles, roles, or departments. There is work to be done and everyone on the team gets that work done. It does not matter what your business card says you do, it matters what needs to be done to get that product to market.
This has been my story for the last four and a half years. Continue reading
I have recently been thinking about the importance of having a high quality product. I understand that different products have different target markets. I also understand that in some instances, the market sector you are targeting dictates the price point. This in turn influences the quality of the product. As a product manager I would rather sell a high priced (i.e. high quality) product than the opposite, but I’ll go ahead and save that topic for another blog.