A Question of Value: The Value Grid

Richard Huntington, Chief Strategy Officer, Saatchi & Saatchi

I have been thinking a bit about value recently.

Agency people don’t like thinking about value because they associate it with having to create tragic price advertising and the kind of discounting behaviour that great brand building is supposed to protect you against.

However, the truth is that every single brand has a value position in the market, a value equation that consumers complete and either places that brand in an advantageous position relative to other brands or at a disadvantage.

Too little concern is placed on understanding the real value positioning of a brand and where it could or should play for maximum commercial effect – in terms of perceived value by the consumer and the premium the brand is able to command.

So I have created a value grid that I find helpful in understanding the relative value positionings in a market and the correct space for your brand to occupy. It’s also quite handy in helping to think through multi brand portfolios from a value perspective.

Here is the basic 9X9 value grid. My thinking at the moment is that the middle square – the parity player or where a brand offers the market average value for the market average price, while a dangerous place to play, is usually occupied by the market leader as other brands tend to position themselves around this. But this may not be correct or always the case.

Also note the bottom right-hand corner – more for less – is the most difficult space for a brand to occupy. In order to pull this off I think you need to have a different business model to the rest of the category, something that allows you to deliver more but for less cost – Like Giff Gaff in mobile or Aldi in grocery.

Anyway, have a play and get in touch to let me know how you get on. Here is a slide share with examples from a number of rather UK centric categories. Later this week I will take you through a guide to how brands create value.