What's Your Added Value?

Does your product add something more than competitors?

Many companies come up with great ideas. But, are they good enough to beat out the competition? Does their product offer something that will truly create value to the customer? Or, is it simply just another product to add to the pile of others just like it? These are some questions companies need to ask themselves before they produce a product because while it may be a great idea, it may not be that practical.

Introducing an innovative, expensive product into a market where simplicity is the main seller can be difficult. So, it is imperative that you make sure you are producing a product people will think they can not live without. Some questions you can ask yourself are: Is this market increasing or decreasing? It is extremely difficult to be successful in a declining market. Can my product be used with preexisting products? If so, this could open the door for a partnership with an already established, successful business. Does it add a value people will maintain and continue to buy? For obvious reasons, you want repeat business- this means they are loyal customers and it also means a steady revenue stream. 

Perhaps you are entering a market where similar products are already established by big name brands.  Now is the time to ask ourself if your product offers something different or better than these name brand, similar products. It is difficult to get people to change from what they know; in some markets brand loyalty is very high. So, one way to get people to change is offering a better, or comparable product, at a lower price. If it does a the same or a better job and costs a fraction of the price- why not change to a different product?

There are obviously many more questions to ask when expanding your company. However, if you do your homework it can be possible to expand and be successful. 

Rapid Expansion in the Health Food Market

Shift Towards a More Health Conscious Lifestyle

In the United States, the specialty food market is worth over $8 Billion. In fact, over half of the American population consumes specialty foods. The consumer market for these products ranges greatly with 60% of the consumers being between 18-44 years old. However, there is a visible change in consumers and the millennials are becoming the largest customer segment.

Recent studies show that 31% of Americans snack more than they used to. This is a direct reflection of American’s love of convenience, living a busier lifestyle, packaging innovations, and expended distribution. This new customer segment of millennials are also shifting their concerns more and more towards being health conscious. What better way to address this health concern and increase in snaking than through specialty snack foods?

In the United States, there are high regulations and tax on junk-food. This hurts the competition and opens a window for convenient health foods. One problem that these specialty foods face is that they are expensive and, as a result, are mostly bought by upper-middle class families. However, the benefits outshine this price concern and people are showing a willingness to pay a higher price for a higher quality good.

Tea-ing Off Into America

Shift towards a healthier lifestyle opens the market for international companies looking to expand 

Health and wellness is quickly becoming more and more of a concern for people. One small step people are taking towards this healthier lifestyle is drinking more tea and less coffee. The gourmet coffee shop market has been steadily declining for the past five years. This provides a gap that needs to be filled and is being done so by the high quality tea market.

In the United States, over 22% of the population drinks tea. In general, tea consumption increased with age; however, this trend is shifting. The largest tea consumer groups are now urbanites and hipsters under the age of 34 years old. While women still consume more tea than men, this new consumer group in comprised of more men than women. This shows a shift in tea consumption and broadens the market.

Despite the US recession, the sales of tea did not slow down. Instead, the positioning encouraged consumers to learn more about what they were paying for. This led to the opening of boutiques and artisan teashops.

Premiumsation trends tend to anchor tea consumers to higher quality teas. Manufacturers use a health and wellness image of tea from exotic countries and use perceptions of high-end quality to justify these higher prices. The entry barriers for this market are quite low because of the low capital intensity of the market. Also, this market has risen close to 9% in the past four years. Companies need to leverage these health and wellness and premiumsation trends for added value.