Low Price or Added Value?

Vesa Purho
Development Manager, Nokia
vesa.purho@nokia.com

Why do people and companies prefer certain products to the competitive products? To put it simply, the reason is either a cheaper price or the perceived added value provided by the product. These two dimensions can be put into a matrix to create various competitive strategies, and these strategies should be taken into account in the documentation development. In this article, I discuss the different competitive strategies and their effect on documentation.

Low Price, Low Added Value

This strategy is used when a company is aiming for the lowest price by providing value that is lower than or similar to its competitors’. This strategy can be used in a tight competitive situation when the other companies are using a different strategy or as a bridgehead to build volume before starting to add more value. When a company uses this strategy, the documentation should follow, providing the minimum documentation with the lowest possible cost. It might not be nice for persons who like to carefully craft every word and sentence, but if the product price is the competitive advantage, the documentation cannot jeopardize it.

High Price, High Added Value

Another strategy is to create added value so that the customers want to buy your product rather than the competitors’ products. If there is enough added value, you may even be able to charge more for the product. One of the options for providing added value is documentation. If the documentation, covering all information not just information in manuals or help files but also in the interface itself, really helps users in their tasks, users can concentrate in the productive work instead of searching for information. High quality documentation can act as a value-adding component to the product. In such cases, documentation staff must be skilled in user and task analysis and in using that information to create innovative solutions for users’ needs.

Low Price, High Added Value

Sometimes a company can try to give the customers added value but still provide the product at a lower price than the competition. This strategy requires having good knowledge of the markets and the customers as well as being able to produce the products at low cost. The low cost may result from economies of scale or efficient processes. To be able to achieve low cost in documentation, good processes are essential as well as good management of the content. Project management must ensure that no extra resources are wasted on creating the content multiple times. Management must focus on using resources to add value. For example, creating the basic manuals from a single source and concentrating more on implementing product- and domain-specific embedded user assistance could be one implementation of this strategy.

Naturally, there is a fourth combination, namely high price, low added value, but that is a strategy that no product actually can use on the long run so I do not discuss it here.

When deciding what kind of documentation your products are going to have, analyse what is the competitive strategy used for your products and act accordingly. Note that one company may use all of these strategies with different products, so what you do with one product may not suit the other products.


This article is the personal opinion of the author and does not necessarily reflect the opinion or practice of Nokia.

 

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