Price vs. Value: What's the difference?

**fanocks2003** · May 12th, 2008, 06:40 AM

I would like you all to read this text, because it discusses the very important subject of Price versus Value. Many people belive they are both the same thing, but they really aren't, because Value is a very, very subjective thing which means Person A may think the ball you are selling is worth $100 while the other persons wouldn't buy it for more than $10. That is how the stock market works. Many millions of people each day quote their subjective view of how much a company is worth (it's Value).

Salespeople and marketing people know this very well. That is why they know the importance of presenting things in their best light in order to get more money. In order to have people Value the things sold, higher.

Con men are equally, or much better, at this art form. They can sell fake products/services for the same price as the real thing (selling a fake painting for millions just because the real originals is sold at such a price normally etc). I read a great article a couple of days ago (I will see if I can find it again for you guys) where the story was about fake investment companies selling non-existing shares. I wouldn't recommend anyone to do this, but you gotta hand it to the con men. They are great sales people and they absolutly know the correlation between Price Vs Value (And they of course know the human mindset and how to play on peoples emotions, but that is another thread).

Have a good read:

http://www.appraiser4jewelry.com/arc..._vs_value.html

**HenkHolland** · May 12th, 2008, 07:06 AM

The link to the article doesn't work, so I couldn't read it yet.

I would anyway like to quote Waren Buffett:

"Price is what you pay, value is what you get"

This says it all.

**fanocks2003** · May 12th, 2008, 07:26 AM

The link worked when I pressed it before I wrote this post. Test it again.

What Warren Buffet says is absolutly right, but the thing is that few people truly understand what he means.

I have met a lot of sellers who brag about their sales capacity, but when they are put at the test of making money they are not that sharp after all.

The extra value I would like to add to this thread is:

When creating a marketing campaign, don't waste all your time on making things look nice and hot. Focus on the benefits. The best TV informercial ever would be "Buy from us and we will deliver these values to you...... The price is $X. Welcome". Nothing fancy, but very right on spot. I would have loved such a TV informercial.

Today you see all these fancy TV informercials, but you never really get/understand the real value. Many of the informercials also focus very much energy on delivering lower prices than the competition. But why? It's like they can't show the benefits so they need to lower prices so that they have anything to offer. So when they can't lower prices anymore they are bankrupt.

I read an article about american airlines recently (this goes for swedish airlines as well. It is not an isolated problem). The airlines are great subject to discuss when mentioning price as a value. Airlines could have charged a lot more for their services if they just learned to show the real benefits, the real value to customers. Everyone in this world aren't cheapskates. Everyone isn't poor. But the airlines is behaving like we are.

When I fly, and I fly from time to time, I don't want lower prices. I want a great experience when flying. That means massage chairs, great space for your legs etc etc. I want to have a good and comfortable time. I flew to Italy last summer with Alitalia. The worst airline ever. When you fly to Italy in the middle of the summer you really want air-condition. Alitalia hadn't understood that fact. The result was: a sweaty scandinavian guy looking like shit when he went of the plane in Rome. I hate looking like garbage when on holiday. I want to feel relaxed, cool and rested.

Companies need to deliver value and stop being so "in to" prices. These companies need to lower prices because actually they really don't deliver to much of value. That is the simple fact.

**Analyzer** · May 12th, 2008, 07:26 AM

Originally Posted by HenkHolland

The link to the article doesn't work, so I couldn't read it yet.

I would anyway like to quote Waren Buffett:

"Price is what you pay, value is what you get"

This says it all.

Or Oscar Wilde, The cynic knows the price of everything and the value of nothing.