Growth Strategy 2/8: Product Value Restructuring System

When formulating business growth strategies, corporate managers tend to instinctively opt for price competition based on small profit but quick turnover — a typical fallacy of System 1 Thinking. Is a price advantage universally applicable across all scenarios? This can be verified through consumer profiling: regardless of city tiers or income brackets, very few consumers regard low price as the sole deciding factor in their purchase journey.

From a financial quantification perspective, the erosion coefficient of price wars on an enterprise’s long-term value is 2.1 to 2.4 times the short-term revenue growth they generate. More importantly, to retain price-sensitive customers, enterprises will divert organizational resources, R&D investment and brand positioning toward the "lowest price" strategy, which ultimately leads to the gradual decline of core competitiveness.

The logic behind long-term growth runs in the opposite direction. Enterprises need to build a supporting system for product value and adopt value-based pricing rather than cost-based pricing. The "premium price" mentioned here does not simply mean raising the absolute price. Instead, it refers to the perceived value premium from the user’s perspective: when users’ perceived value threshold exceeds the product price, their price sensitivity will drop significantly.

Building perceived value follows a three-tier implementation framework:

Tier 1: Break through competition via differentiated positioning

The core logic is: Better to be different than just better. In a market with homogeneous competition, even if a product outperforms the industry benchmark by 1%, it only counts as marginal improvement. Customers face nearly no switching costs and may turn to rival products for a mere 1% price discount. In contrast, carving out an independent value track allows a product to become the exclusive supplier in its field, even if its overall performance scores only 80 out of 100.

It should be clarified that the differentiation discussed here is not about switching market tracks or adjusting target customer groups, but rebuilding the dimensions of user perceived value. Take wireless vacuum cleaners as an example. The industry generally competes around four focal points: suction power, noise control, battery life and price cuts. Dyson, however, reshaped the value anchors. Against the industry’s obsession with suction figures, it put forward the technical concept of "zero suction loss". Beyond positioning the product as a mere cleaning tool, it established brand recognition as a "tech-inspired home art piece". As a result, without holding absolute advantages in traditional performance parameters, its retail price reaches 4 to 5 times the industry average, successfully dominating the user mindset for high-end wireless vacuum cleaners.

Tier 2: Restructure the product value system

To translate differentiated perception into tangible products, the core lies in tapping into users’ latent demands — the unawakened needs hidden beneath the surface of consumer decisions.

Take household treadmills first. Users’ explicit demand is a durable fitness device, while their latent demands include self-identity (labels of self-discipline and wellness) and a sense of community belonging. Accordingly, product value can be designed as a combined solution: immersive fitness scenarios, real-time guidance from dedicated coaches, and access privileges to exclusive high-net-worth fitness communities.

Another example is TWS earbuds. Users explicitly seek audio devices with clear sound quality and stable connection, yet their latent needs include privacy protection in public spaces (to prevent sound leakage) and a personal zone amid noisy environments. For this reason, features such as noise cancellation, sound leakage prevention and focus mode carry far higher priority than marginal upgrades to traditional audio parameters. The essence of value restructuring is to return to users’ real usage scenarios and explore their unmet, even unrecognized, deep-seated needs.

Tier 3: Build value moats with mega products

Distinct from short-term viral hits, a mega product serves as the comprehensive carrier of all an enterprise’s value propositions.

A viral hit focuses on boosting short-term popularity, acquiring new users and recovering cash flow, with core evaluation indicators including cost-performance ratio, traffic ROI and marketing buzz. By contrast, a mega product aims to capture user mindshare, build ecological moats and anchor the overall pricing system. Its key metrics cover total lifecycle value and contribution to corporate competitive barriers. The development of a mega product must be based on the successful delivery of the two preceding tiers.

To sum up, the complete workflow for product value restructuring is as follows:

1. Abandon homogeneous performance competition and establish an independent value track;
2. Tap into users’ latent demands and reshape the core value delivered to customers;
3. Launch mega products that embody the new value propositions.

This system enables enterprises to achieve sustained growth across business cycles.