1. Value Maps Georgetown University McDonough School of Business Ken Homa Proprietary Material © K.E. Homa 2000-2004

2. Price Create & extract ‘real’ valueProduct Deliver benefits at ‘right’ cost Create & extract ‘real’ value RPV

3. Product Deliver benefits at ‘right’ costPrice Create & extract ‘real’ value Customer Competition Company Relative Perceived Benefits Price Value Relative Perceived Value

4. Price Create & extract ‘real’ valueProduct Deliver benefits at ‘right’ cost Value = Intersection (Product, Price)

5. Benefits Price ManyFew High Low FMV Fair Market Value Value Deficit Value Surplus Value Map C A B D F E

6. Preference Models Research Illustration How sweet is your ideal cola ? How important is it to you that a cola have the proper sweetness ? How closely does brand X match to your ideal sweetness ? Very=4 Somewhat=3 Not much=2 Not at all=1

7. Perceptual Map LowQuality Low Price High Price HighQuality G C F E B D A

8. Perceptual Map LowQuality Low Price High Price HighQuality G C F E B D A VALUE

9. BENEFITS ManyFew PRICEPRICE High Low Value Map

10. BENEFITS ManyFew PRICEPRICE High Low C B1 P1 Value Map

11. BENEFITS ManyFew PRICEPRICE High Low A C B B2B1 P2 P1 Value Map

12. BENEFITS PRICEPRICE ManyFew High Low VALUE FUNCTION (FMV) Value Map

13. BENEFITS PRICEPRICE ManyFew High Low B1 Min. Profit Price Range Cost Value Added Value Map

14. BENEFITS PRICEPRICE ManyFew High Low B1 Min. Profit Price Range Cost Price Floor Price Ceiling P1 P2 Value Map

15. BENEFITS PRICEPRICE ManyFew High Low B1 P1 Cost Min. Profit Price Floor Price Ceiling Retained Value Value Map

16. BENEFITS PRICEPRICE ManyFew High Low B1 Cost Min.Profit Price Floor Price Ceiling Value Ceded P2 Value Map

17. BENEFITS PRICEPRICE ManyFew High Low Value Map Advantaged?

18. BENEFITS PRICEPRICE ManyFew High Low More Benefits Lower Price VALUE SURPLUS VALUE DEFICIT Value Map

19. BENEFITS PRICEPRICE ManyFew High Low Short-term Share Gain VALUE SURPLUS Value Map

20. VALUE SURPLUS Long-run Value Shift BENEFITS PRICEPRICE ManyFew High Low Value Map

21. Perceptual Map LowQuality Low Price High Price HighQuality G C F E B D A VALUE

22. Perceptual Map LowQuality Low Price High Price HighQuality G C F E B D A

23. Perceptual Map LowQuality Low Price High Price HighQuality G C F E B D A 1 23

24. BENEFITS PRICEPRICE ManyFew High Low B1 Cost Min. Profit Price Floor Price Ceiling Price Range P1 P2 Value Surplus Value Deficit Value Map Value Added

25. Price Create & extract ‘real’ valueProduct Deliver benefits at ‘right’ cost Respect costs, but peg prices to the market. Cede value only for clear strategic purposes.

26. Value Maps Georgetown University McDonough School of Business Ken Homa Proprietary Material © K.E. Homa 2000-2004