Now at some point, we have all had a bottle of water. And for the most part, water is just water. When we need to or want to purchase a bottle, we have a general idea of what it should cost. If I was to purchase a case of water at Costco, what would that cost? On the other end of that spectrum, if I were to purchase a bottle of water at Disney World, what would that same bottle of water cost? The bottle of water has two very different price points and value positions.
When a bottle of water is sold at Costco, the value is based on the number of bottles at a value-based price. Many people shop at Costco because their goods are priced at a great value. Costco has a model based on selling a larger volume of goods and a great price point. A case of water is an excellent example of this. On average, you can purchase a case of 40 water bottles for approximately 4 dollars. This brings the cost per bottle to around .10 cents a bottle. This is an excellent cost-based value.
Now, when the bottle is sold at Disney, its value is primarily based on the convenience of your time. Walking through the Disney parks, you will find multiple stations where you can purchase bottled water simply throughout the day. Most people do a fair amount of walking and have no desire to leave the park to purchase a bottle of water. Because of its convenience, the value of the water bottle is exponentially higher. On a quick Google search, you will find in Disney parks, a bottle of water will range in price from 3.75 to 5.75 per bottle. This is a tremendous convenience-based value.
Now, take this same thought process when you look at your menu presentation. Consider the different ways in which you bring value to your products. Are you building value in your products on a cost basis or a convenience basis? I often hear finance/business managers tell me it is harder to sell products on a cash or lease deal than on a finance deal. Is this because the manager uses a cost basis to build value? When we focus on convenience, the conversation changes. Good luck with your presentations!