Value - What's in a Price?

  Hort Snacks - December 2018
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 Recently, while attending the Green Industry Show and Conference, I sat in on a talk by Dr. Bridget Behe, a professor at Michigan State University. I always enjoy listening to Bridget (I’ve heard her several different times), as she has a pleasant and easy-to-listen to style of teaching and what she says usually sinks in to my noggin. It is always solidly grounded in solid research and data, but is presented in such a way as to be directly and practically applied.

This time, Bridget was talking about the mechanism of setting prices. Pretty daring to do at 8 o’clock in the morning, in my opinion. However, instead of just focusing entirely on the science-y math side of calculating a price, she introduced the (not necessarily new) idea of considering the mystical art of assigning “value”, that hard to pin down, subjective factor (or factors, really). It wasn’t exactly earth-shatteringly new and novel, but it bears some review and definitely deserves to be considered some more as you look ahead to setting prices for the next season.

Bridget spent a bit of time on the math of calculating and determining price (what goes into it), but I’d like to share a few of the points that I gleaned from Bridget (not as eloquently as her) relating to other factors that should be considered.

  • NUMBERS don’t make decisions. NUMBERS aren’t right or wrong until we place a JUDGEMENT on them.
  • NEVER price according to size of container
    • “When we price by container size, we communicate to customers that all of the value of the product lies below the soil/media line.”
    • If you focus on pricing based on the size of the pot, you lose all of the other VALUE factors
  • What else should go into a PRICE? – Consider elements of PERCEIVED VALUE
  • FUNCTIONAL value – Features, functions, attributes or characteristics (aesthetics, quality), performance, outcomes or consequences (environmental or other benefits)
  • EPISTEMIC value – Novelty or ability to satisfy a desire; sensory value (aesthetics, ambiance, sensory traits) – e.g. scent
  • CONDITIONAL value – Symbolism or meaning; may relate to memory, events, tradition
  • EMOTIONAL value – Relates to emotions and relationships, as well as the emotions associated with buying and selecting; personal investment in time, effort, energy
  • SOCIAL value – Identify with social/cultural group; hip/cool; Increase perception in the eyes of others
In the end, how can you sell the value of your product, moving beyond the price of producing it, plus some extras?

A story to prove my point…

Our home has few (if any) plants growing in it. This has been true for over 20 years. But whenever we have a plant, it usually gets a name and has an emotional attachment to it, beyond the norm.

The other day, on our way through the local department store, a patch of green caught my eye. When I looked more closely, I noticed that it was a bunch of Norfolk Island Pines, which reminded me of one that we’d had years ago, which we called Herman. For a few minutes, we waxed nostalgic about our beloved houseplant.

Minutes later, after passing through the checkout, we noticed a bright and colourful display of Christmas cacti. As a child, my wife had purchased one for her Nana (paternal grandmother). It had grown, thrived and flowered for many years (close to 40) and was a regular reminder of this beloved woman. Did we buy a new one for ourselves that night? You betcha.

That plant didn’t cost much, but it has tremendous value.
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For more information about the content of this document, contact Robert Spencer.
This information published to the web on November 28, 2018.