I have recently read a book regarding how to expand the business and get more customers. It has summarized the key points into 6 essential steps. Well, I would like to take this opportunity to write down my understanding and share with all those who are also interested.

I believe by writing things down, it helps to re-enforce my memory as well. Okie, here we starts:



Principle No. 1: 3 basic elements of Purchase

The 3 basic elements of purchase are Price, Value and Need. So what are the relationships among these three factors?

Customer's need determines the value, which then determines price

Whenever we sell a product, we always wonder if the price is set at the right value. Sometimes we look at the market to find a benchmark.This is all fine. But what we really need to understand is that the value of any product is not stagnant. The value is always linked with the need, the need of the customers.

For example, a bottle of mineral water (1.5 L)  may cost you 1 dollar in a super market. That is a rather common price. Assume I bought one bottle, opened it up and took one sip. Now I ask you, how much would you like to offer for THIS bottle of water? Maybe you would not want it even if I give it for free. Because you would not think it is hygienic to drink it. And there are so many more bottles around in the super market. However, imagine now that we are the only two person lost in a dessert, we had not been drinking for 3 days and now I would like to offer you the same bottle of opened "left over" water. How much would you like to pay to get this bottle of water from me? If I ask for one hundred dollars, would you? If I ask for ten thousand dollars, would you?

Question 2, does customers always choose product with best value to price ratio?

I will answer this question tmr.