"Added value" gaps.

There is a problem in the heavy business use of the phrase "added value." The phrase has served as the trigger for even more new products than "less work for mother" convenience. The problem is more with the words than with the concept.

Saving work and hassle does add a lot to the value of many products and packages. The problem is that consumers think in terms of added benefits that make them willing to spend more to get products that meet their needs. They still think of more basic products that don't have the convenience benefits as better values.

Popcorn in the movies at $5.00 a pop is great fun and convenience but a terrible value. Even though they are a pain to carry home, giant economy sizes of paper goods and juices seem to offer convenience as well as value - the convenience comes from not having to purchase them as often.

The added value of value meals and larger sizes of hot coffee or cold soft-drinks speaks to consumers because the cost per ounce is lower (than smaller sizes) AND because the larger drinks stay hotter or colder longer. (Most consumers dismiss the fact that they spill more and lose more because that happens less often.) Few consumers think that Campbell's new Soup At Hand is a good value, but many think that it's got a lot to offer because it fits their lifestyle needs.

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Take a look at this table comparing pre-cut salads with whole head greens: Pre-Cut versus Cut-Your-Own Rating pre-cut salads vs. Pre-cut Whole cut-your-own greens on: Convenience **** ** Product quality *** **** Freshness in-store *** **** Freshness at home * *** Value * ****

Value is the biggest gap between the two options. That gap in what consumers continue to call value isn't stopping precuts from growing faster than whole greens.

The language gap is not a trivial matter. The food and consumer products industries have focused on value-added products as a way of increasing prices and profits. By not speaking the same language as consumers, they have left consumers feeling that big companies are too big to care about them.

Value perceptions are influenced by more than food and household products. The airline price (and survival) wars have made it clear that big companies will charge whatever they can - reducing their prices only when a new competitor comes into the market and forces them to compete. "The newer airlines offer consumers a lot more value because they are building their business based on showing consumers they care. The older airlines have to care about financial survival and are too focused on their business to care about their customers."

Consider value when it comes to cars. Many consumers consider Japanese cars a better value than American cars because they last longer, need fewer repairs, and actually cost less than American cars in the long run. Thus with cars, the word and the concept of value have remained rooted in the idea of what you get for what you spend.

It's hard to think of food in the same way as flights and cars, but some consumers who shop at Whole Foods believe they actually get more value (in spite of higher prices) for their dollars because the food they are getting is less processed or adulterated. Consumers who shop at Trader Joe's are less focused on health and more on taste-per-dollar--they think Trader Joes offers them tastier food for less money. That's a different "value proposition," and consumers say that they get more value at Trader Joe's than at Whole Foods and Wild Oats because those stores are about quality.