Any product has not only a price, but a value. We are ready to pay a lot for some products, and we won’t use some, even if they are for free. In this topic, we will talk about the product value, where it comes from, and why this concept is so important for product managers.
Product value and user needs
A banana is now a product – it was plucked from the branch and delivered to the store. However, you don't really like bananas and are unlikely to buy them, unless they're the last thing in the store. Another example — you won't download a photo app, even if it's the best one if you don't like taking pictures. Whether you will use a particular product will depend on what "Value" a product delivers.
The value of the product is one of the key concepts with which the product manager works. This is the extent to which a particular product covers the needs of the user. User needs can be divided into two large groups: fundamental needs (I need it) and scenario-based needs.
Mike is on his way home from school. He is hungry; he has the fundamental need to eat. Then come scenario-based needs: to eat quickly, inexpensive and satiating, the need to order food now, so that by the time he's at home, the food is there.
Take the good old banana example. It is not enough to satisfy your hunger cravings. But your doctor says that bananas contain an important element that your body really requires. And the banana is now not just a product, but an essential source of nutrition elements. It satisfies your need and acquires value.
Change in product value
You work at an animation studio and draw cartoons. Software like 3DSMAX is a product with a very high value. After all, this program helps you earn money.
If you're a car driver, love football, and don't like cartoons at all, then the value of this program vanishes. You rather require a good navigator or a cool stereo system for your long hauls. Most likely, you won't even know about such products because they have absolutely no value for you.
There may be an intermediate version when we love cartoons and want to become animators, but we are only at the beginning of the road, and it makes no sense for us to buy an expensive license. First, we need to prove our intention. Then we will start looking for similar, but free programs. Eventually, we'll buy more expensive software, for example, when a position at a dream company will require experience in it.
Another example — the old laptop did its job well, with typing text documents and sending e-mails. You wanted a new laptop, a powerful and beautiful one. But appearance itself was not enough to convince you to spend a few scholarships on an expensive thing. And suddenly, you decide that you will be a programmer or a designer. You took a few courses and now a laptop is not just an "I want it" thing, it is a necessity. Your need has changed and has become sufficient to make a purchase.
Fundamental needs
Fundamental needs are with us from the cradle; they affect us every day. Needs are studied by psychologists, but these concepts are also important for marketing and the creation and development of products. One of the most classic examples is Maslow's hierarchy of needs. Many people criticize and modify it, but it remains one of the main sources that people rely on when trying to understand people's motivation. To use or not to use.
At the base of the hierarchy lie our physiological needs. Then, security needs, love, and self-realization. If you haven't slept for 48 hours, you don't really care if you get a bonus at work. Sleep first. Or if a robber is chasing after you, the chances are you don't care about the fact that you're rowed with a friend. First, you need to save your life.
If the first four needs are satisfied, they can be attributed to "must-haves", and you can move on to the next levels to the needs of "growth". The first four needs provide the basis of our personality and when they are fulfilled, you can go to the next level. From person to person, the order of needs may vary. But on average, they can be designated as a pyramid.
Popular IT products and fundamental needs
If you consider an application, you will find how fundamental needs are represented there. So, Facebook closes one of the basic needs of Belonging and Love Needs, helping to find friends and restore contacts. For many, the Self Esteem need is fulfilled when we post our photos from a vacation or a conference and receive likes.
Banking applications cover our security needs. After all, we entrust banks with our money and feel calmer than when they are in our pockets.
Meditation apps cover transcendental needs. Although for some they may be so important for mental well-being that they can also be attributed to physiological needs, like healthy sleep.
At JetBrains Academy, we satisfy our cognitive needs by acquiring new IT knowledge; Pinterest fulfills our esthetic ones by making boards with favorite pictures for inspiration.
Scenario-based needs
Many scenarios can be built around any fundamental need; they together will create the final value of the product. Now, when most of the fundamental needs of a person are closed, the struggle for the user occurs at a more subtle and elaborate level.
Several applications can deliver food. But, one can cover more neat scenarios for more users, and then it will be more successful. For many people, it is critical how quickly food will be delivered, how many restaurants are in the app, and how polite the delivery person is. New scenario-based needs will affect the success of the application. Although back in the day, this need could be fulfilled without applications and even grocery stores.
People have always traveled. But in the modern world, travel has become available to many people who buy a plane ticket and explore other countries. We can say that the desire to travel lies in the fundamental needs of growth, such as the knowledge of the world and esthetic needs. The changed consumption scenarios have turned the entire travel industry upside down. With rental aggregators and online ticket services, the struggle for travelers has moved to a new plane. It is now important to how convenient it is to search and buy tickets and accommodation; new scenario-based needs have appeared — to do it quickly, conveniently, in one click.
Conclusion
The better the product fulfills our fundamental and scenario-based needs, the more value it carries.
The fundamental needs, according to Maslow's hierarchy of needs, include physiological needs, the need for security, the need for love and support, self-realization, as well as cognitive, esthetic, self-determination and existential needs.
Scenario-based needs depend on how a product is used. It may change over time with the development of the world and technology.
The more people are ready to fulfill this need through similar scenarios, the more successful your product will be.
As people have many opportunities to satisfy their basic needs, modern products compete at the expense of well-thought-out scenarios. Today, the value of a product is determined not only by a need it satisfies, but also how effectively it satisfies it. Although, at the heart of any scenarios, you may find one of the fundamental needs.