Customer-perceived features and price analysis are important indicators of how well the company’s product is perceived in the target market. These analyses help the company understand the product features that the customer perceives as good, as well as the features that need improvement.
They also provide an understanding of how customers perceive the product pricing in comparison with competition. They can also indicate whether the efforts to increase value for a particular feature are headed in the right direction. The scores can be calculated using a comparison of all, a select few, or individual competitors. The customer-perceived features and price analysis should preferably be done separately for the product features and the price.
The customer-perceived features analysis can be done using these following steps:
- The customers of both the company and competing companies are asked to list product features, other than price, that are important in their purchasing decisions. The senior management or corporate sales team can also add to the list of features, based on their knowledge of the products and customers.
- The various features are weighted. This can be done through a survey or from senior management inputs, based on their understanding of the importance of the features.
- The customers are then asked to rate the features of the products or services offered by the company, as well as the features of their competitors’ products and services.
- Finally, the score on each feature is divided by the competitors’ score. This is called the product feature ratio for that feature. For each product feature, a ratio of less than one indicates that the particular product feature is perceived lower in quality than the competition’s; a ratio greater than one indicates that the product feature is perceived better than the competition’s.
- After getting the ratios for each of the product features, ratios are then multiplied by the weights for each attribute and added together to get the overall customer-perceived score for all the product features of the company’s product. An overall customer-perceived features score of 100 indicates a position of relative parity with the completion for the overall product. A score greater than 100 indicates that the product is perceived to be better than the competition’s with respect to overall product features.
The customer-perceived price analysis is similar to the process used for customer-perceived features analysis, and helps the company understand how the product price is perceived with respect to competitors’ prices. However, instead of product features, the calculation uses attributes that affect perceptions of a product’s overall cost.
The customer-perceived price analysis is intended to illustrate customer perception of where a company’s pricing sits relative to the prices of their competitors in areas where the product or service has several pricing factors.
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