LSA2011 BDT S10 ADDING VALUE – UNDERSTANDING
PRODUCT & MARKET
Session Plan
Adding Value – Understanding Product & Market
Session Objectives
Knowledge:
Participants will learn about the concept of adding value to a product and / or
service as a means to learning about their product / service and their target
market. They will be introduced to features and benefits as supporting aspects.
Skills:
Participants will receive a tool which can assist them in finding ways of adding
value for customers through the understanding and observation of features and
benefits in products and services.
The ability to break products down into features and benefits will help
participants understand their businesses, allowing them to analyse their products
(services) while looking for opportunities to add value to their customers. All this
will be evidenced in the accompanying business plan.
The concept of value adding will be applied throughout this and the following
session to give participants a structured approach to analysing their target market
and customers.
Attitude:
Participants will hopefully adopt the mindset and attitude that success in business
is built on being able to add value to the customer’s life by satisfying a want or
meeting a need.
A certain way of thinking will be demonstrated; it is hoped that the demonstrated
structured way of disseminating products will be assimilated and will guide
individuals in their planning efforts.
Learning Objectives
Pre-requisites for
participants
Time Required
By the end of this session participants will be able to
 Demonstrate a grasp of the concept of adding value by listing ways in which
their product / service adds value to the targeted customer
 Identify product features by describing these in the business plan
 Identify and list product / service benefits as they pertain to their customers
in the business plan, thereby demonstrating an understanding of their target
market (customers)
 List characteristics of their target markets and customers according to
categories in the business plan
 Use the skill of identifying features, benefits and value flexibly by describing
their own products / services in the business plan
None; this session is aimed at informing participants who have not previously had
exposure to business training.
Training & Exercises:
Safety:
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INTRODUCTION TO ADDING VALUE – FINDING VALUE IN PRODUCTS & SERVICES
Activity 1 – Adding Value To A Standard Product
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Trainer / facilitator to choose any standard comestible item
Display picture on white board of basic comestible
Does not have to be realistic
Lead group in discussing product
Leading question: How can we add value to this product?
What can we do that will make it more useful to people?
Think about different people, what they might use it for and what adjustments would have to be made.
Example
Adding value to a car
1. Farmer
2. Family mother
3. Wealthy business man
Question: Take a basic car – how can this be modified to add value to the three individuals?
Are the same things valuable to different people? Does their perception of value change?
Purpose
 Draw out observation skills
 Foster creative thinking
 Allow people to see opportunities
 The point of this exercise is to help people understand that value can be added to almost any product /
service, and that it’s that step that
Conclusions
Adding value requires knowledge of the person you are trying to sell the product to – this helps you think about
your target market and starts your thoughts in the right direction for market analysis.
The focus in business is adding value for the customer – customers might be end consumers or other businesses.
Example – a car wheel is made of metal and rubber – one company will take the raw metal ore, and turn it into
metal which can be used in production of a wheel – another company will craft the wheel, selling it to the car
manufacturer – every time you engage in business activity, the aim is to add something to the product which will
result in the end consumer getting more use out of it.
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DEMONSTRATING ADDED VALUE TO CUSTOMERS
Activity 2 – Model Sales Pitch (Features & Benefits)
Trainer / Facilitator to take any sellable object and to describe it to the group, focusing on physical features and of
what use it is to people (benefits)
No introduction to this group
Purpose
The point of this short exercise is to demonstrate expected format in general terms to the group
Throughout the exercise, the trainer / facilitator will be able to observe what participants say, focus on and convey
in their presentations
This is step 1 in leading the group toward an understanding of features and benefits.
Conclusions
None at this point – conclusions will be drawn at a later stage
Activity 3 – Group Sales Pitches (Features & Benefits)
Trainer / facilitator to divide group into smaller groups
Each group will be provided with a product (service) and given a set time to get to know it
Each group will then present their product to the other groups, looking to sell the product
Purpose
This exercise will give the trainer the opportunity to observe what individuals focus on, allowing for follow-ups and
concise training pointers.
The purpose is not to tell the individuals what is required of them; rather, at this stage, the purpose is to give
individuals the opportunity to develop their own skills of describing features and benefits
Participants may need a few attempts at honing their presentation skills. This is a great opportunity to start
highlighting the required behaviour in a sales conversation and marketing drive; it is also an opportunity to
encourage individuals.
Conclusions
Every product has distinct features, or attributes, which tell us about it.
For a product / service to be of any worth to a customer, we need to find things that the product (service) can offer
which the customer needs and / or wants.
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UNDERSTANDING VALUE ADDING AS A CONCEPT
What does it mean to add value?
Customer needs and wants
Product / service opportunities
Step 1– Features and Benefits of Products and Services generally
Step 2 – Benefits to your customers (marketing and sales)
What does value look like to the customer?
Quality
Lower cost
Differentiation – offering something that other products / services cannot offer which meets a particular
need and / or desire
What may customers
Need
Want
An Example of A Need
Clothing
Group Activity: worked example of a simple t-shirt to an accessorised t-shirt
How do we add value here, what can we do to better meet the customer’s needs?
First, we need to understand what his needs are!
That depends on how money he has – how much he can afford to spend
Next, we need to understand how much he is willing to spend…
Summary Pointer
Understanding how much money people have to spend (afford & willing) will help you know your customer and
hopefully find a suitable market for your idea, or a great idea for a certain market
UNDERSTANDING MARKETS
Markets are made up of
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People
Products
Services
Demand & Supply
Value can generally be added to people in 2 main ways
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Cost: by being cheaper than other providers of products / services
Differentiation: by offering a product / service which previously did not exist or by offering a variation on
something that already exists in the market
Business may seek to enter markets in the following ways
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1.
2.
Existing markets (products & services)
Be cheaper (cost)
Do something differently
New markets
Unsolved problems (offering an innovation)
Gaps in the market – products which don’t exist but would be wanted in future (create demand)
Changing environmental trends: economy, new industry, legislation
BUSINESS PLAN SECTION
Understanding Markets (to go in business plan)
Adding Value – Who are the people you want to sell to…
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What do they need?
What do they want?
What do they value, what is important to them?
Adding Value – how are you going to add value to the lives of the people you want to sell to?
What about your product is useful to them?
Pricing – How much money can they afford to spend on a similar product? (this will give you an idea of how much
you can charge)
Pricing – How much money are they willing to spend on your product? (need to have a sample)
Product – Describe your product / service
What can your product do that others cannot? Or what does your product / service do better?
What are the product’s (service’s) benefits to customers?
Where is your target market (location)?
How big is your market (number of people you could potentially sell to)?
Is your product something people need to live (food, clothing, shelter etc) or something they want to have (cell
phones, jewellery etc?)
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