{"id":41,"date":"2023-02-28T16:12:07","date_gmt":"2023-02-28T16:12:07","guid":{"rendered":"https:\/\/illuminated-text.com\/cb\/?p=41"},"modified":"2026-07-27T11:02:34","modified_gmt":"2026-07-27T11:02:34","slug":"core-benefit","status":"publish","type":"post","link":"https:\/\/illuminated-text.com\/cb\/core-benefit\/","title":{"rendered":"Core Benefit Model"},"content":{"rendered":"\n<h4 class=\"wp-block-heading\">A question to get us started:<\/h4>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"600\" height=\"750\" src=\"https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/04\/woman-with-iphone-pexels-raka-miftah-2880529_s.jpg\" alt=\"\" class=\"wp-image-690\" style=\"width:400px\" srcset=\"https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/04\/woman-with-iphone-pexels-raka-miftah-2880529_s.jpg 600w, https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/04\/woman-with-iphone-pexels-raka-miftah-2880529_s-240x300.jpg 240w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><figcaption class=\"wp-element-caption\">(image <a href=\"https:\/\/www.pexels.com\/photo\/a-woman-holding-his-cellular-phone-2880529\/\" data-type=\"link\" data-id=\"https:\/\/www.pexels.com\/photo\/a-woman-holding-his-cellular-phone-2880529\/\">credit<\/a>)<\/figcaption><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">What makes this woman&#8217;s phone valuable?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You would be surprised how many people get such a simple question wrong &#8211; even smart business people.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here are some answers that they tend to give:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Because it costs a lot of money<\/li>\n\n\n\n<li>Because engineers with elite skills crafted it, <\/li>\n\n\n\n<li>Because it takes great skill to assemble<\/li>\n\n\n\n<li>Because it has great branding and a genius for a founder.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Do those sound about right to you?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But they are all true&#8230; but wrong.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Those are all correct observations about the phone, but they aren&#8217;t what makes it <strong>valuable<\/strong>. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Don&#8217;t believe us? Consider a nuclear-powered can-opener. It would cost tens of millions, take brilliant engineers and expert builders many years to assemble, and could have the best branding in the world. But who would ever want it?<\/p>\n\n\n\n<div class=\"wp-block-pb-accordion-item c-accordion__item js-accordion-item no-js applied\" data-initially-open=\"false\" data-click-to-close=\"true\" data-auto-close=\"true\" data-scroll=\"false\" data-scroll-offset=\"0\"><h5 id=\"at-410\" class=\"c-accordion__title js-accordion-controller\" role=\"button\">A less silly example: The ESPN phone<\/h5><div id=\"ac-410\" class=\"c-accordion__content\">\n<div class=\"wp-block-columns alignwide are-vertically-aligned-center is-layout-flex wp-container-core-columns-is-layout-8f761849 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:22%\">\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"220\" height=\"416\" src=\"https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/04\/espn_phone.jpg\" alt=\"Image of a 2007 Sanyo flip phone with red number keys and the ESPN logo on it\" class=\"wp-image-697\" srcset=\"https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/04\/espn_phone.jpg 220w, https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/04\/espn_phone-159x300.jpg 159w\" sizes=\"auto, (max-width: 220px) 100vw, 220px\" \/><\/figure>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:78%\">\n<p class=\"wp-block-paragraph\">For the 7 months on either side of May 2007 you could buy the ESPN phone. It was pricey for a mobile phone of its day, and it didn&#8217;t offer many text messages or talking minutes. But the Entertainment and Sports Network did feed you up-to-the-minute scores through it, and eventually even let you watch some live games (on its tiny grainy screen).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Keep in mind that this was a year or two before proper smartphones launched, so ESPN had to create a lot of cutting-edge technology to push this information out to you in real time.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">ESPN even spent tens of millions of dollars making <a href=\"https:\/\/www.youtube.com\/watch?v=pkg8OU8Ia8w&amp;t=62s\" data-type=\"URL\" data-id=\"https:\/\/www.youtube.com\/watch?v=pkg8OU8Ia8w&amp;t=62s\" target=\"_blank\" rel=\"noreferrer noopener\">an advert<\/a> for it, that they broadcast at the Super Bowl, where ads cost millions of dollars per second to air. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Great engineering, great branding, but&#8230; it flopped. Hardly anyone bought them.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">ESPN wasn&#8217;t wrong that consumers might like to use their phone for more than just talking, and that they really might like getting real-time information from them. It&#8217;s hard for some of us to imagine living our present-day lives without being able to do those things. And, in fact, a lot of the technology that ESPN invented for this device went on to be foundational for smartphones a few years later when they did become successful mass-market items.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But the ESPN phone failed because consumers wanted to talk and text from their phones too, and they were used to being able to do this for a reasonable price. Those functions were worth more to them than quick access to sports scores.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Side note: you can find this product (and others) at the highly entertaining <a href=\"https:\/\/museumoffailure.com\/\" data-type=\"URL\" data-id=\"https:\/\/museumoffailure.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">Museum of Failure<\/a>.<\/p>\n<\/div>\n<\/div>\n<\/div><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">The thing that makes this woman&#8217;s phone valuable#up to Apple is that she (and many other consumers) are willing to pay a lot of money for it. Apple does care deeply about good design, but this devotion ends the moment that they can&#8217;t find enough people willing to pay for a thing &#8211; ask the engineers who designed <a href=\"https:\/\/www.wired.com\/2013\/08\/remembering-the-apple-newtons-prophetic-failure-and-lasting-ideals\/\" data-type=\"URL\" data-id=\"https:\/\/www.wired.com\/2013\/08\/remembering-the-apple-newtons-prophetic-failure-and-lasting-ideals\/\" target=\"_blank\" rel=\"noreferrer noopener\">their Newton<\/a>.<\/p>\n\n\n<div class=\"brxe-div footnote_anchor\"><div class=\"brxe-div footnote_shifter\">\n<pre class=\"wp-block-verse\">#down. From a societal perspective you can debate whether phones are valuable because they make our lives better or if they are bad because they suck our attention into a black hole of misery. But for now we're sticking to the business perspective.<\/pre>\n<\/div><\/div>\n\n\n<p class=\"wp-block-paragraph\">So the phone&#8217;s value lives in one place: between the ears of many people &#8211; normal people like you and me.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The big question is this: How does that value get there?<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Got it? Let&#8217;s do another one<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">If you spend money on this thing, what have you bought?<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/04\/Dewalt-DCD796P1_GB-18V-XR-brusheless-hammer-drill-driver.jpg\" alt=\"A Dewalt electric drill on a plain white background. It is yellow and black unit that you would hold in one hand\" class=\"wp-image-681\"\/><figcaption class=\"wp-element-caption\">(Image from <a href=\"https:\/\/www.dewalt.co.uk\/product\/dcd796p1-gb\/18v-xr-brushless-hammer-drill-driver?tid=568856\" data-type=\"link\" data-id=\"https:\/\/www.dewalt.co.uk\/product\/dcd796p1-gb\/18v-xr-brushless-hammer-drill-driver?tid=568856\">here<\/a>)<\/figcaption><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">If you said &#8220;a drill&#8221;, then pat yourself on the back.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It <strong>is<\/strong> a drill, <strong>but <\/strong>a drill is not what you <strong>bought<\/strong> (stop patting).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">We see your scepticism here, and we are proud of it. Academics are famously pro-skepticism.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But think: Did you wake up that morning and say: &#8220;What I need today is a plastic box that spins a metal stick really fast! Won&#8217;t somebody please take my money?&#8221;. Because that&#8217;s what a drill is, right?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If it&#8217;s not a drill you bought, then what is it?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some people say: &#8220;a brand&#8221;. Does that sound more right to you?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Again, it&#8217;s not wrong: this is a DeWalt brand drill. But (and there&#8217;s always a &#8216;but&#8217;), do people really go into hardware stores with fistfuls of cash because they want to own brand logos? We don&#8217;t. <a href=\"https:\/\/illuminated-text.com\/product\/a-brand-purchasable\/\">Here, we&#8217;ll prove it<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So what is it? <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It&#8217;s ok, think it through. Take your time. Books don&#8217;t mind waiting. It&#8217;s one of their virtues.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&#8230;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Got it yet?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The answer is actually an old marketing cliche: You don&#8217;t buy a drill, you buy holes. The reason you hand over your money is so you can make holes in something. The drill is just how they get there.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Are these just silly trick examples?<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">It can be difficult to spot what makes things valuable to people. This page is full of examples and terms and theories, and you can learn them all, but at heart it is a skill. There is a real art to getting outside your own head, and getting into the minds of potential consumers. And like any skill, you can learn a little by reading about it, but the only place you really get good at it is by practising. Finding real places where it happens, and doing the real work of thinking, observing, and analysing. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Jobs to be done<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">There is a theory called &#8220;Jobs to be done&#8221; <span class=\"zp-InText-zp-ID--4193465-PYX58PJ6--wp41 zp-InText-Citation loading\" rel=\"{ 'pages': 'np', 'items': '{4193465:PYX58PJ6}', 'format': '(%a%, %d%, %p%)', 'brackets': '', 'etal': '', 'separator': '', 'and': '' }\"><\/span> that originated with a marketing practitioner called Bob Moesta. What he noticed in his career working on literally thousands of products is that the way you think about a product is very different when you are making it from when you are using it. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The maker typically thinks about it in terms of features and benefits. To take one of Bob&#8217;s own examples <span class=\"zp-InText-zp-ID--4193465-YGE3BCRY--wp41 zp-InText-Citation loading\" rel=\"{ 'pages': 'np', 'items': '{4193465:YGE3BCRY}', 'format': '(%a%, %d%, %p%)', 'brackets': '', 'etal': '', 'separator': '', 'and': '' }\"><\/span> compare a Snickers bar with a Milky Way. From the producer&#8217;s point of view, both products are similar &#8211; they are chocolate bar snacks, with similar, yet slightly different features (i.e.. Snickers have more peanuts) that might offer a slightly different benefit (e.g., &#8220;more filling&#8221;). If you think of them this way then you see them as close competitors.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But when Bob talked to buyers of these bars, he found they were used for very different reasons. People typically bought a Snickers bar when the job to be done was to remove hunger they had built up from exercise or missing a meal. He found marathon runners eating Snicker&#8217;s bars for fuel, to fill them up. People were not buying Milky Way for this purpose. They bought that one when they wanted a treat or a dessert. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Once you looked at it this way, Snickers bars weren&#8217;t competing with Milky Way, they were competing with granola bars and bananas. Milky Way, in contrast, were competing against ice cream and cookies. The products may have had similar features, but they were &#8216;hired&#8217; by consumers to do very different jobs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jobs To Be Done theory <span class=\"zp-InText-zp-ID--4193465-PYX58PJ6--wp41 zp-InText-Citation loading\" rel=\"{ 'pages': 'np', 'items': '{4193465:PYX58PJ6}', 'format': '(%a%, %d%, %p%)', 'brackets': '', 'etal': '', 'separator': '', 'and': '' }\"><\/span> has a number of insights about identifying these jobs. A short and incomplete list of these would include:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>They are often nuanced. \n<ul class=\"wp-block-list\">\n<li>If you asked Snickers and Milk Way customers what they were doing when they made their purchase, probably both sets would say &#8220;getting a snack&#8221;. You have to push deeper into what is going on to get to what&#8217;s really driving the difference.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li> The circumstances of a purchase are often more useful to know about than the details of the person who is making it\n<ul class=\"wp-block-list\">\n<li>The same person might buy a Snickers or a Milky Way depending on whether they were going for a run or having dinner with their friends.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Jobs can often go beyond the simple function of a purchase into the way it makes a person feel, or relate to others\n<ul class=\"wp-block-list\">\n<li>This is something we will explore more as we get deeper into this book<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\">A more complete model of products<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">If you have worked out what jobs people might hire your product to do, your job as a marketer is still only starting. You still have to make sure your product will perform the job it is hired to do, and help people acquire it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">One way of systematically breaking this down is to use an old idea from one of marketing&#8217;s most enduringly popular textbooks: Philip Kotler <span class=\"zp-InText-zp-ID--4193465-J9FQ7Z7Q--wp41 zp-InText-Citation loading\" rel=\"{ 'pages': 'np', 'items': '{4193465:J9FQ7Z7Q}', 'format': '(%d%)', 'brackets': '', 'etal': '', 'separator': '', 'and': '' }\"><\/span> famously divided products into 3 levels: Augmented, Actual, and Core. <\/p>\n\n\n<div class=\"wp-block-image is-style-default\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"500\" height=\"500\" src=\"https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/Core-product-diagram-1.jpg\" alt=\"Diagram with 3 concentric circles. The outer circle is blue and labelled 'Augmented product' and 'How'. The middle ring is green and labelled 'Actual product' and 'What'. The inner circle is yellow and labelled 'Core benefit' and 'why'.\" class=\"wp-image-810\" srcset=\"https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/Core-product-diagram-1.jpg 500w, https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/Core-product-diagram-1-300x300.jpg 300w, https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/Core-product-diagram-1-150x150.jpg 150w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><figcaption class=\"wp-element-caption\">Kotler&#8217;s 3 level distinction<\/figcaption><\/figure>\n<\/div>\n\n\n<h3 class=\"wp-block-heading\">Core benefit (aka#up &#8220;job to be done&#8221;, aka &#8220;value proposition&#8221;)<\/h3>\n\n\n<div class=\"brxe-div footnote_anchor\"><div class=\"brxe-div footnote_shifter\">\n<pre class=\"wp-block-verse\">#down. aka = \"Also Known As\" <\/pre>\n<\/div><\/div>\n\n\n<p class=\"wp-block-paragraph\">The &#8216;<strong>core product&#8217;<\/strong> is Kotler&#8217;s term for the job the product does for consumers &#8211; it is the reason that they buy it. In the case of our drill from earlier, the core product is holes. In the case of house insurance, it is security against the risk of future misfortune.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Kotler sometimes called it the core product and sometimes the &#8216;<strong>core benefit<\/strong>&#8216;, which is the term we will use, as it is a slightly better description of what it means. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This concept has other names too, which shouldn&#8217;t be surprising if you consider how fundamental it is to the act of trying to market things; Anyone who has ever put any real thought into this task will have had to reinvent it themselves if they hadn&#8217;t heard about it first. Marketing practitioners almost universally refer to it as a product&#8217;s &#8216;<strong>value proposition<\/strong>&#8216;#up. These terms all mean the same thing.<\/p>\n\n\n<div class=\"brxe-div footnote_anchor\"><div class=\"brxe-div footnote_shifter\">\n<pre class=\"wp-block-verse\">#down. As in: \"what value are you proposing to consumer that they might want?\"<\/pre>\n<\/div><\/div>\n\n\n<div class=\"wp-block-group definition_block has-background is-content-justification-left is-nowrap is-layout-flex wp-container-core-group-is-layout-14d7fe8f wp-block-group-is-layout-flex\" style=\"background-color:#fcb90017\">\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"definition_term wp-block-paragraph\"><strong>Core Benefit<\/strong><\/p>\n<\/blockquote>\n\n\n\n<p class=\"definition_definition wp-block-paragraph\">The reason that consumers buy a thing. The job it does for them. It can exist only in interaction with consumers. Known by practitioners as the &#8216;value proposition&#8217;.<\/p>\n<\/div>\n\n\n\n<h4 class=\"wp-block-heading\">Ways businesses get their core benefit wrong<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Even smart people get things wrong, and businesses sometimes get core benefits wrong in at least two ways:<\/p>\n\n\n\n<h5 class=\"wp-block-heading\">Communicating the core benefit poorly<\/h5>\n\n\n\n<p class=\"wp-block-paragraph\">The first way is visible every time you see a sign outside a business that describes itself in cryptic ways like: &#8220;we offer thermal fluid solutions&#8221; or &#8220;we are renowned for our insight-driven value delivery&#8221;, or &#8220;our RX-V9 model delivers powerful torque through its patented bimetal flange&#8221;. As you can imagine, these tend not to work very well &#8211; How many potential consumers will think &#8220;Finally, a thermal fluid solution! Just what I need!&#8221;, or &#8220;oh boy, a flange, my troubles are over!&#8221;. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The issue here is that it is much easier to think about things you know well than it is to think about things you can&#8217;t see. For most businesses you know your actual product well, but you can&#8217;t see inside your customer&#8217;s heads where the core benefit lives. That means that people have meetings in boardrooms where they are more likely to say things like: &#8220;well Bob, that bimetal flange gives us so much better torque than anyone else&#8221;, than &#8220;we&#8217;ve talked to a lot of consumers, and they worry about their lawn fading. Our harder-spinning lawnmower rotors can help with that because they cut the grass blades more cleanly&#8221;. Both statement might be correct, but the second one is at least trying to speak to their potential consumers. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some core benefits are harder to articulate than others, too. The people bragging about their &#8220;insight-driven value delivery&#8221; might be worried that if they say &#8220;let us help with your advertising strategy&#8221;, then people might not come to ask them about their other services (maybe building better sales databases), so their boardroom conversation might focus on: &#8220;let&#8217;s just keep it more generic and tell them about how good our value delivery is, and then that covers it all.&#8221; The problem with this is that instead of only knowing about one of their services, the generic statement tells consumers about none of them, so nobody calls them up at all. Good communications can be deceptively hard to do!<\/p>\n\n\n\n<h5 class=\"wp-block-heading\">Offering to do a job that they don&#8217;t much want doing<\/h5>\n\n\n\n<p class=\"wp-block-paragraph\">The second way that businesses can go wrong is by making products that don&#8217;t deliver core benefits that consumers want at all. If you spend a little time browsing <a href=\"https:\/\/www.kickstarter.com\/\" data-type=\"URL\" data-id=\"https:\/\/www.kickstarter.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">kickstarter.com<\/a> you will find dozens of new products that people are trying to develop. While most of these will describe the potential core benefits (a fake example: &#8220;It&#8217;s a notebook that keeps you safer because it can stop a bullet!&#8221;), many will fail because there aren&#8217;t many people who feel that this is a job that needs doing for them#up.<\/p>\n\n\n<div class=\"brxe-div footnote_anchor\"><div class=\"brxe-div footnote_shifter\">\n<pre class=\"wp-block-verse\">#down. To be fair to these aspiring entrepreneurs, it's <strong>really<\/strong> difficult to think of new products that significant numbers of people really want in their lives. Not impossible, but consumers only have so many needs, and thousands of people have already spent millions of hours trying to find every possible new way they can to fulfil them.<\/pre>\n<\/div><\/div>\n\n\n<h5 class=\"wp-block-heading\">A good listen<\/h5>\n\n\n\n<p class=\"wp-block-paragraph\">Here&#8217;s a <a href=\"https:\/\/www.everyonehatesmarketers.com\/podcast\/choosing-right-value-proposition\" data-type=\"link\" data-id=\"https:\/\/www.everyonehatesmarketers.com\/podcast\/choosing-right-value-proposition\">podcast episode<\/a> in which a successful serial tech entrepreneur is interviewed about how to come up with good &#8216;value propositions&#8217;. Warning: most of the first half is a little slow, but then it picks up nicely (and when he talks about &#8216;taste&#8217; at the very end, it&#8217;s a good insight but not the term psychologists would use. We&#8217;ll cover that in our chapter on emotions).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Actual product<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">It&#8217;s not enough to know why people would buy your product, though. You have to work out what your product actually is.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In some ways this is the most obvious of Kotler&#8217;s 3 levels &#8211; the &#8220;<strong>actual product<\/strong>&#8221; is the first thing that comes to mind when you think of nearly anything (i.e., &#8220;it&#8217;s a chocolate bar,&#8221; or &#8220;it&#8217;s a drill&#8221;). But Kotler suggest that it is more than just the thing itself#up. It also includes the product&#8217;s features, brand, and even packaging &#8211; all of the elements that help define what the product is, how it works, and how consumers can recognize it.  <\/p>\n\n\n<div class=\"brxe-div footnote_anchor\"><div class=\"brxe-div footnote_shifter\">\n<pre class=\"wp-block-verse\">#down. A common student mistake is to say that the actual product is the \"tangible\" part. Tangible means something you can physical touch. That might be true of a drill, but it isn't of most services. The actual product for home insurance is a promise to pay you money if your house gets robbed or burns down. You can't touch that, any more than you can touch the actual product for a movie, legal contract, or window cleaning<\/pre>\n<\/div><\/div>\n\n\n<p class=\"wp-block-paragraph\">This means that two very similar drills could have very different actual products. The box and wires parts might be similar, but perhaps one feels lighter in your hand. Perhaps one is styled to look rugged, and hard-wearing, with black and yellow colouring, whereas the other might be styled to look sleek. One might come in a box printed to look like it is held together with rivets, and the other might come in a box embossed with gold letters. One might say &#8216;DeWalt&#8217; on the side, and the other might say &#8216;Bosch&#8217;. All of these are differences in the actual product, and all are things that marketers try to manipulate to get people to buy one drill vs. the other. <\/p>\n\n\n\n<div class=\"wp-block-group definition_block has-background is-content-justification-left is-nowrap is-layout-flex wp-container-core-group-is-layout-14d7fe8f wp-block-group-is-layout-flex\" style=\"background-color:#fcb90017\">\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"definition_term wp-block-paragraph\"><strong>Actual Product<\/strong><\/p>\n<\/blockquote>\n\n\n\n<p class=\"definition_definition wp-block-paragraph\">The elements that define what a product is (tangible or intangible), and how it is perceived by consumers. This includes elements such as its design, its features, its quality level, its brand, and even the packaging it comes in.<\/p>\n<\/div>\n\n\n\n<div class=\"wp-block-pb-accordion-item c-accordion__item js-accordion-item no-js applied\" data-initially-open=\"false\" data-click-to-close=\"true\" data-auto-close=\"true\" data-scroll=\"false\" data-scroll-offset=\"0\"><h5 id=\"at-411\" class=\"c-accordion__title js-accordion-controller\" role=\"button\">Packaging matters <\/h5><div id=\"ac-411\" class=\"c-accordion__content\">\n<p class=\"wp-block-paragraph\">How is packaging part of the actual product? Surely it&#8217;s just a box that a thing comes in, that you immediately throw out after you&#8217;ve bought it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If we&#8217;re honest, sometimes that&#8217;s true. It&#8217;s just a container with a label saying &#8220;rat poison&#8221; or &#8220;shampoo&#8221;, or something else that you wouldn&#8217;t want to mix up. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Other times, though, it can matter for helping customers define what a product is in their mind. If you try buying things like wine or perfume you find yourself confronted with dozens of choices, and you&#8217;ve probably never heard of most of them. The only way to choose between them is essentially the name, the price, and&#8230; the package. Marketers have to work hard to get those kinds of products noticed from crowded shelves, and can get pretty creative.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"487\" height=\"565\" src=\"https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/creative-bottles.jpg\" alt=\"2 bottles. One of a wine called '19 Crimes' which has a black and white photo of a grim looking man in old fashioned clothes. The other a black glittery bottle of Yves Saint Laurent 'Black Opium' perfume.\" class=\"wp-image-817\" srcset=\"https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/creative-bottles.jpg 487w, https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/creative-bottles-259x300.jpg 259w\" sizes=\"auto, (max-width: 487px) 100vw, 487px\" \/><figcaption class=\"wp-element-caption\">If consumers can&#8217;t taste or smell your product in the shop, marketers have to get creative at finding ways to distinguish their product from competitors<\/figcaption><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">Steve Jobs famously elevated the packaging of mass consumer goods into something approaching an art form, as part of his bid to convince people that iPhones were a different type of experience from other phones. Other tech companies learned to follow his lead on this.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"I Spent $40,000 to Unbox a Sealed Original iPhone!\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/-BwUyTrU9fo?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><figcaption class=\"wp-element-caption\">Unboxing an iPhone 1. If you think about it, unboxing videos could only become a genre after boxing started to get nice!<\/figcaption><\/figure>\n<\/div><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Augmented product<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">It might seem like you are done with a product when you know what it is, and why people buy it. Kotler says there is more, though. He says there is an <strong>augmented product <\/strong>which are inducements to buy it such as its warranty, or an offer to deliver it and\/or install it, or even a price discount for it. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It can be a little tricky at times to find the exact dividing line between an actual and augmented product#up. For example, if I put a mug into a gift bag, then am I augmenting my actual product, or is the gift bag just part of the packaging? (which, if you recall, is considered to be part of the &#8216;actual product&#8217;)?<\/p>\n\n\n<div class=\"brxe-div footnote_anchor\"><div class=\"brxe-div footnote_shifter\">\n<pre class=\"wp-block-verse\">#down. If you look around the web you will often see augmented product defined as the 'intangible' part of the product. This makes no sense, because, as we discussed above, actual products are often intangible. If your product is, say, software that makes clever footnotes, then everything about it is intangible! <\/pre>\n<\/div><\/div>\n\n\n<p class=\"wp-block-paragraph\">The way we think of it is that the actual product is about <strong>what<\/strong> you are buying, and the augmented product is <strong>how<\/strong> you are buying it. So if you are buying a mug in a gift wrap, then a ready-to-use-gift is what you are buying, so the wrap is part of the actual product. But if you get a 10% discount, and it delivered to your door with a same-day service, then that is how you buy and receive the product, so these are augmented product features.<\/p>\n\n\n\n<div class=\"wp-block-pb-accordion-item c-accordion__item js-accordion-item no-js understand\" data-initially-open=\"false\" data-click-to-close=\"true\" data-auto-close=\"true\" data-scroll=\"false\" data-scroll-offset=\"0\"><h5 id=\"at-412\" class=\"c-accordion__title js-accordion-controller\" role=\"button\">I&#8217;m still a bit confused about augmented products<\/h5><div id=\"ac-412\" class=\"c-accordion__content\">\n<p class=\"wp-block-paragraph\">It can be intuitive to think of actual product as what the manufacturer makes, and the augmented product as what a retailer contributes to making the sale happen. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Take a car, for example. When Ford manufacturers the car they create the actual product by choosing what it will be (how long, how many seats, how it will be styled, what to call it, how fuel efficient to make it, and so on). They likely make those decisions to try to give consumers good reasons to buy their car, meaning they have thought a lot about the core benefit &#8211; why consumers might to buy it. So: they alter the <strong>actual product <\/strong>(i.e., <strong>what it is<\/strong>) to help it fulfill a useful <strong>core benefit <\/strong>(i.e., they&#8217;ve thought a lot about <strong>why consumers might want to buy it<\/strong>).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But very few people buy their cars from the gates of Ford&#8217;s factory. Most people shop by visiting a local retail dealership. Those retailers often try to win customers by <strong>augmenting <\/strong>the product be offering a helpful salesperson to answer their questions, arranging a test drive, or offering financing (i.e., lending people the money to pay for the car#up).<\/p>\n\n\n<div class=\"brxe-div footnote_anchor\"><div class=\"brxe-div footnote_shifter\">\n<pre class=\"wp-block-verse\">#down. Unrelated life advice: Car dealerships often make a lot of their money by offering much higher borrowing rates than a local bank would. Think about this if you ever need to borrow money for a car - you don't have to get your loan from the dealership you buy it at<\/pre>\n<\/div><\/div>\n\n\n<p class=\"wp-block-paragraph\">Similarly, a retailers for sofas might offer to deliver one to your home, and one for washing machines might offer to connect it to your water pipes, or replace it for free if it breaks within the first year. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you follow this idea to its logical conclusion you could imagine more ways to augment products, such as in-store displays demonstrating how to use the product, or placing product in extra-convenient locations (such as vending machines).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To be clear, it isn&#8217;t always so tidy as manufacturer = actual product and retailer = augmented product. Sometimes manufacturers offer warrantees (which are augmented products) and with services the manufacturer is usually the same person as the retailer (i.e., your haircut is made by the same person who sells it to you). This is just an intuitive way of learning the difference, not a hard rule which identifies them 100% of the time.<\/p>\n<\/div><\/div>\n\n\n\n<div class=\"wp-block-group definition_block has-background is-content-justification-left is-nowrap is-layout-flex wp-container-core-group-is-layout-14d7fe8f wp-block-group-is-layout-flex\" style=\"background-color:#fcb90017\">\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"definition_term wp-block-paragraph\"><strong>Augmented product<\/strong><\/p>\n<\/blockquote>\n\n\n\n<p class=\"definition_definition wp-block-paragraph\">Elements that add value to a transaction, that are not directly focused on creating or communicating the core benefit. Typically this includes things like delivery, installation, and warranty.<\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Things to know about the core benefit<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Once you understand core benefits you can start looking at the world in a slightly different way, and that is useful because it helps you to see things you might otherwise have missed. Here are three big insights that it helps bring into view:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">1. The scholarly insight &#8211; Service-Dominant Logic<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The idea that value is individual, subjective, and relative is not a new one in Marketing <span class=\"zp-InText-zp-ID--4193465-DL8LG9B9--wp41 zp-InText-Citation loading\" rel=\"{ 'pages': 'np', 'items': '{4193465:DL8LG9B9}', 'format': '(%a%, %d%, %p%)', 'brackets': '', 'etal': '', 'separator': '', 'and': '' }\"><\/span>, but its fuller implications have been codified into a somewhat elaborate theory called the Service Dominant Logic <span class=\"zp-InText-zp-ID--4193465-XWAB455U-_-4193465-4XJ6YQXZ--wp41 zp-InText-Citation loading\" rel=\"{ 'pages': 'np', 'items': '{4193465:XWAB455U},{4193465:4XJ6YQXZ}', 'format': '(%a%, %d%, %p%)', 'brackets': '', 'etal': '', 'separator': '', 'and': '' }\"><\/span>. The full S-D logic theory (as it is known) breaks out five key axioms and six further derived premises. We aren&#8217;t going to try to wade through all of these here#up, the basic idea is that the core benefit &#8211; the root value of any exchange &#8211; is <strong>always<\/strong> a service, and that the parties to any exchange <strong>both<\/strong> receive these services from each other. Let&#8217;s break that down further:<\/p>\n\n\n<div class=\"brxe-div footnote_anchor\"><div class=\"brxe-div footnote_shifter\">\n<pre class=\"wp-block-verse\">#down. But you are certainly invited to do so yourself! It's good for the marketing soul (if such a thing exists)<\/pre>\n<\/div><\/div>\n\n\n<p class=\"wp-block-paragraph\">S-D logic says that the service that is sold is always &#8220;co-created&#8221; between the buyer and the seller. If that sounds a little abstract, consider our drill: Who makes those holes that you are buying? You, the customer, make them &#8211; with the help of the firm&#8217;s technology. In other words, you co-create holes together. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But what if it&#8217;s a service that someone does for you: Is that still co-created? Consider buying a massage. It seems like the masseuse does everything, prodding and rubbing your back while you just lie down quietly. But that prodding is only the actual product. The core benefit &#8211; the reason you would pay for a massage in the first place &#8211; is that feeling of &#8220;ahhhhh&#8221; that it can give you. And who feels that &#8220;ahhh&#8221;? You do. The masseuse can&#8217;t feel it for you. And that feeling has to be co-created. They have to be good at knowing how to manipulate your back muscles, and you have to let yourself relax and be willing to enjoy the sensation. You have to do it (to at least some extent) together.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Further, the S-D logic says that if the core benefit exists only in the mind of the consumer (with the help of the firm to get it there), then the consumer&#8217;s subjective experience is the only real measure of whether it exists or not. So is your drill a good one? The only thing it depends on is how much you like using it to make holes, no matter what your friends say, what an independent drill reviewer writes, or what a drill company executive announces. Or think about your massage: Did it make you feel relaxed? If not then it failed at value creation, no matter how skilled the masseuse was, or how hard they tried.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But wait, there is more! S-D logic also claims that buying your drill isn&#8217;t the end of the exchange, it is only the start. Why so? Because you haven&#8217;t received your core benefit yet when you take your brand-new drill out of the shop. If your new drill breaks right away, then you have received zero value for your money; You didn&#8217;t get your holes! Similarly, when the drill manufacturer receives your money, that is only the start of the value for them too. Your money is useful to them only if they can later use it to pay their employees or to buy a new jet for their CEO, so she can show off to her CEO friends. Money, according to the S-D logic, is just a store for future services. It is a placeholder for the <strong>real<\/strong> reason anyone makes an exchange, which is the benefit they can get from a future service (of some kind).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This all adds up to a pretty interesting way of thinking about markets. It gives a perspective that most of us aren&#8217;t used to. But if you are of a very practical frame-of-mind, then maybe this all just sounds like a bunch of intellectual games to you. But this theory also offers some practical insights too:<\/p>\n\n\n\n<h5 class=\"wp-block-heading\">How do firms compete with each other in an S-D world? <\/h5>\n\n\n\n<p class=\"wp-block-paragraph\">One of the big problems of competition is that if you can do something to provide value, then other people can probably copy it and do the same thing too. But S-D logic says that meaningful advantage over others isn&#8217;t just about the drill you make (or whatever). It is about bringing together &#8216;operant&#8217; resources to help other people do things. Let&#8217;s unpack that.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here &#8216;operant&#8217; means &#8220;things that can operate &#8211; that can <strong>do<\/strong> something&#8221;. So DeWalt might be good at bringing together the operant resources of engineers, precision machining experts and their equipment, and of marketers. Together they find clever ways to help consumers make the right kinds of holes, in the right kinds of places, at the right times, with minimal discomfort or effort. Other firms would have different operant skills. Theirs might be about having relationships with enough of the right people to coordinate some big project; This is what Hollywood producers get paid for &#8211; they coordinate the director and actors to meet with a script, and enough good camera operators, editors, and special effects teams, all slotting together at the right times to complete a full movie project. This coordination is such a key job that if your movie wins an Oscar for best picture, it is the producer who gets handed the golden statuette. They brought the movie together, they get the award. Many firms are not USED to thinking of themselves as assemblers of operant resources, but making that shift can arguably help them to make better and more productive decisions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In terms of business strategy, then, the big implication of S-D logic is that a firm&#8217;s job is <strong>not<\/strong> to create great products: that is another thing that smart business people get wrong. Rather, a firm&#8217;s job is to do two things together. One is constantly thinking about their consumers&#8217; lives, talking to their consumers often, and listening to them always, so they can invent and reinvent ways to help them. The second is to take that information and search for alignments it can have with the resources that they have (or tha they could get), so they can find ways to deliver that value. The corollary of this is that they also have to be aware of what they can&#8217;t do well, to know what not to promise, and which directions not to travel. This can be a subtle shift, but it is an important one.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If this doesn&#8217;t blow your mind, just even a little bit, then either you are so incredibly smart that it was all obvious to you already, or you aren&#8217;t thinking about it all quite hard enough :)<\/p>\n\n\n\n<div class=\"wp-block-pb-accordion-item c-accordion__item js-accordion-item no-js understand\" data-initially-open=\"false\" data-click-to-close=\"true\" data-auto-close=\"true\" data-scroll=\"false\" data-scroll-offset=\"0\"><h5 id=\"at-413\" class=\"c-accordion__title js-accordion-controller\" role=\"button\">Is there really no difference between products and services?<\/h5><div id=\"ac-413\" class=\"c-accordion__content\">\n<p class=\"wp-block-paragraph\">An operations person would tell you that there is a big difference. If ten people want to buy drills at the same time this is not a problem. They can each lift a drill from your shelf to inspect and buy. If ten people want to buy the same massage at once, the masseuse simply cannot do ten all at once (or even, probably, on the same day). Neither can a customer inspect a massage, like they would a drill, without actually consuming one. Services are intangible, perishable, and variable (in the precise details and quality of their delivery) in a way that physical products are generally not. This matters.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Service dominant logic makes a slightly different point, though: While services and products might have actual products that need managing differently, the core benefit for both is always an intangible service. With a drill, that service is helping someone to make holes. With a massage, the service is the customer&#8217;s feeling of relaxation. The customer has to use the drill to make the holes, and the customer has to be the one who feels relaxed. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is always this service that people pay their money for. Physical goods are just one possible means of arranging for that service to happen.<\/p>\n<\/div><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">2. The dramatic insight &#8211; the &#8216;D word&#8217;<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Maybe nobody in the world can make a better drill than you can. Does that mean your business is safe?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Not if a drill isn&#8217;t what people are really buying, no.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The world&#8217;s most famous marketing scholar is probably a guy called Theodore Levitt, and possibly his most famous article was a piece in the Harvard Business Review called &#8216;Marketing Myopia&#8217; <span class=\"zp-InText-zp-ID--4193465-L84TKW3C--wp41 zp-InText-Citation loading\" rel=\"{ 'pages': 'np', 'items': '{4193465:L84TKW3C}', 'format': '(%a%, %d%, %p%)', 'brackets': '', 'etal': '', 'separator': '', 'and': '' }\"><\/span>. In it, he argued that whole industries have been destroyed because they were so focused on their actual product that they couldn&#8217;t see their core benefit#up. He didn&#8217;t use the terms &#8216;actual product&#8217; or &#8216;core benefit&#8217; because those weren&#8217;t invented yet, but those are good translations of what he meant. He said that railroads wouldn&#8217;t have been decimated by the emergence of the car industry if they had realized that they weren&#8217;t in the locomotives business, but the transport business. He said that cinemas wouldn&#8217;t have been so ravaged by the emergence of TV if they had realized they were in the entertainment industry, not the theatre industry.<\/p>\n\n\n<div class=\"brxe-div footnote_anchor\"><div class=\"brxe-div footnote_shifter\">\n<pre class=\"wp-block-verse\">#down. 'myopia' is the scientific term for being shortsighted (or nearsighted, depending which side of the Atlantic you got your English from)<\/pre>\n<\/div><\/div>\n\n\n<p class=\"wp-block-paragraph\">There is a word to describe this process &#8211; a word that has become so fashionable in business studies that entire conferences to it (at <a rel=\"noreferrer noopener\" href=\"https:\/\/startupexchange.mit.edu\/node\/34019\" data-type=\"URL\" data-id=\"https:\/\/startupexchange.mit.edu\/node\/34019\" target=\"_blank\">big<\/a> <a rel=\"noreferrer noopener\" href=\"https:\/\/rcc.harvard.edu\/event\/hela-spring-conference-2019-disruption-innovation-and-future-europe\" data-type=\"URL\" data-id=\"https:\/\/rcc.harvard.edu\/event\/hela-spring-conference-2019-disruption-innovation-and-future-europe\" target=\"_blank\">name<\/a> schools and the <a rel=\"noreferrer noopener\" href=\"https:\/\/techcrunch.com\/events\/disrupt-sf-2018\/\" data-type=\"URL\" data-id=\"https:\/\/techcrunch.com\/events\/disrupt-sf-2018\/\" target=\"_blank\">tech industry<\/a>). Harvard has a <a rel=\"noreferrer noopener\" href=\"https:\/\/pll.harvard.edu\/course\/disruptive-strategy?delta=0\" data-type=\"URL\" data-id=\"https:\/\/pll.harvard.edu\/course\/disruptive-strategy?delta=0\" target=\"_blank\">course<\/a> dedicated to it. And that word is &#8216;disruption&#8217;. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\" id=\"Blockbuster\">This is obviously a thing that still happens. Consider Blockbuster (a home video rental company) and Netflix. They both offered the same core benefit: entertaining shows. But Netflix was cheaper than Blockbuster (assuming you rented more than two or three videos a month), and it offered vastly more choice of movies to watch because it wasn&#8217;t limited by how many DVDs or video cassettes you could cra into a small local retail outlet. Also, it offered more convenience because you didn&#8217;t have to leave your couch and walk to a local shop to find a show to watch. In other words, the core benefit was the same, but Netflix&#8217;s actual product was much better. The result: Blockbuster went from being a global juggernaut chain with nearly 10,000 locations at its peak in the mid 2000&#8217;s, to now having only <a rel=\"noreferrer noopener\" href=\"https:\/\/en.wikipedia.org\/wiki\/Blockbuster_(Bend,_Oregon)\" data-type=\"URL\" data-id=\"https:\/\/en.wikipedia.org\/wiki\/Blockbuster_(Bend,_Oregon)\" target=\"_blank\">one remaining<\/a> franchise operation. Netflix disrupted Blockbuster.<\/p>\n\n\n<div class=\"wp-block-image is-style-default\">\n<figure class=\"aligncenter size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"534\" height=\"401\" src=\"https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/Blockbuster_Video_Wide.jpg\" alt=\"Image of a Blockbuster video shop with a big yellow sign posted above it saying 'STORE CLOSING' \" class=\"wp-image-841\" style=\"width:401px;height:301px\" srcset=\"https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/Blockbuster_Video_Wide.jpg 534w, https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/Blockbuster_Video_Wide-300x225.jpg 300w\" sizes=\"auto, (max-width: 534px) 100vw, 534px\" \/><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">And that&#8217;s really what disruption is: When you can find an actual product that meets the same core need better, and so a newcomer displaces (mostly or completely) an established business or industry.<\/p>\n\n\n\n<div class=\"wp-block-pb-accordion-item c-accordion__item js-accordion-item no-js applied\" data-initially-open=\"false\" data-click-to-close=\"true\" data-auto-close=\"true\" data-scroll=\"false\" data-scroll-offset=\"0\"><h5 id=\"at-414\" class=\"c-accordion__title js-accordion-controller\" role=\"button\">Real talk: can you avoid being disrupted if you look ahead well?<\/h5><div id=\"ac-414\" class=\"c-accordion__content\">\n<p class=\"wp-block-paragraph\">A lot of the advice around disruption, starting with Levitt&#8217;s original article (in which he warned that electric cars were about to disrupt gasoline ones &#8211; a prediction that does seem like it will become accurate, give or take about 7 decades) is that firms have to look ahead and adapt. The implication is very much that if you are smart about what you do and are willing enough to make big changes, then you can adapt. But is this always true?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Perhaps sometimes it is. But take the example of Eastman-Kodak. Incorporated in 1892, it invented and popularized the idea that cameras could take pictures without needing a big clunky single-use photographic plate. Instead, they worked out how to print photosensitive chemicals onto a strip of film that was so small and flexible that you could roll it up into a tiny plastic canister that could be loaded into cameras, and ejected from them. All of a sudden you can take several pictures in a row simply by winding through this film strip, and if you needed more pictures you eject the canister and pop a new one in. Then you drop the canisters at a local lab (often a pharmacy shop) and they use it to make paper prints. This (among other innovations) launched Kodak into being the dominant brand for camera film for many decades. For a long time their slogan of a &#8216;Kodak moment&#8217; even entered into everyday language as a way of referring to a moment worth preserving with a picture.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But Kodak&#8217;s empire started falling to pieces in the 1990&#8217;s, partly due to competition with fellow film company Fujifilm, but more so because it was disrupted by digital photography. Who needs to wait 24 hours to see what pictures they have taken, paying to buy the firm and then again to develop it, when you can take as many pictures as you want for free, and see them instantly on your digital viewing screen?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So surely Kodak could have seen this coming. In Levitt&#8217;s terms, they could have realized that they were in the &#8216;photographs business&#8217; not the &#8216;film business&#8217;. Surely they could have changed? Were they just sideswiped by marketing myopia? There are two stories you can tell about why they didn&#8217;t do this. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Marketer <a rel=\"noreferrer noopener\" href=\"https:\/\/podcast.everyonehatesmarketers.com\/episodes\/how-to-stay-relevant-in-business-3-tips-to-remain-competitive\/transcript\" data-type=\"URL\" data-id=\"https:\/\/podcast.everyonehatesmarketers.com\/episodes\/how-to-stay-relevant-in-business-3-tips-to-remain-competitive\/transcript\" target=\"_blank\">Allen Adamson claims<\/a> that he worked with Kodak some time ago and was told, that their forecasting people did indeed see it coming, even correctly predicting the timeframe; that digital would take over in four or five years. So why didn&#8217;t they change? According to Adamson, it was partly because the executives didn&#8217;t want to believe that this new technology could ever be as good as what they had build their careers making. Partly also it was because the executives weren&#8217;t allowed to divert huge amounts of profit from the pockets of shareholders and salespeople to get into a new break-even market of digital cameras &#8211; so they were held back by &#8216;golden handcuffs&#8217;.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There&#8217;s another story you can tell too, though: Kodak were basically a chemical company. That is where their expertise was; smearing really clever light-sensitive chemicals on thin flexible films, then developing it into vividly coloured pictures. The scientists on their payroll, their patents, their factories, were all built around really strong chemistry skills. Kodak not only digital photography coming &#8211; they created the first self-contained digital camera! But being able to to mass produce those would have taken different expertise and infrastructure than they had &#8211; precision machining of camera bodies, controls, and lenses &#8211; these are not easy things to simply pick up. They would have had to fire their long-standing and well-established chemist employees and hire a bunch of new optics people en-masse in their place. And even if they had managed to do this, at industrial scale, would consumers have accepted Kodak cameras ahead of the camera brands that they already knew and trusted like Canon and Nikon? And even if they would have, did Kodak have access to the distribution channels through which cameras were sold? They surely had relationships with thousands of tiny retailers who sold film across drug store counters and convenience shops, but did they have reach with the higher-end retailers who sold expensive cameras?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Kokdak absolutely saw the disruption coming, and they were reluctant to pivot, but it&#8217;s also an open question as to whether they would even have been able to had they wanted.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As a final coda#up, the digital camera market is now being disrupted by mobile phones. The cameras on those have now got so good that they can compete with even the more expensive digital SLR (&#8220;Single Lens Reflex&#8221;) cameras, so people don&#8217;t feel the need to buy (or carry around) this extra piece of equipment. So even if Kodak HAD got good at making digital cameras, would it now be able to quickly master touch screen smart phones, and compete with Apple and Samsung selling those? It does seem unlikely.<\/p>\n\n\n<div class=\"brxe-div footnote_anchor\"><div class=\"brxe-div footnote_shifter\">\n<pre class=\"wp-block-verse\">#down. Kodak \/ coda... get it? (sorry for the awful pun there)<\/pre>\n<\/div><\/div><\/div><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">Let&#8217;s do one last exercise: What else has the same core benefit as Netflix? What else offers entertaining shows?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" id=\"Movies\">How about movie theatres? The core product is the same, but the actual product is worse, right? It&#8217;s more expensive to go see a movie, less convenient (you have to leave your house), the choice is worse because you can only watch the films that are playing, not hundreds or thousands of options. So Netflix should disrupt and destroy movie theatres, right? <\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"987\" height=\"334\" src=\"https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/Cineworld-share-price-screenshot-2023-05-03-150837.jpg\" alt=\"\" class=\"wp-image-837\" srcset=\"https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/Cineworld-share-price-screenshot-2023-05-03-150837.jpg 987w, https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/Cineworld-share-price-screenshot-2023-05-03-150837-300x102.jpg 300w, https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/Cineworld-share-price-screenshot-2023-05-03-150837-768x260.jpg 768w\" sizes=\"auto, (max-width: 987px) 100vw, 987px\" \/><figcaption class=\"wp-element-caption\">Cineworld&#8217;s share price<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">And you can see it right there, where it drops off a cliff&#8230; in 2019? Wait a minute, Netflix launched a little earlier than that. That drop in 2019 will be the COVID pandemic when people weren&#8217;t allowed to go out in public (obviously not so helpful for a movie theatre business).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But still, we MUST be able to see where Netflix launched and destroyed them, because we know how disruption works now, right, and this fits exactly with that&#8230; and&#8230; so Netflix&#8217;s launch would be that big drop right in the year&#8230; ???<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Have you Googled it yet? (also, isn&#8217;t it funny when a brand gets so big that its name gets turned into a verb?).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Netflix launched in 2012, which is&#8230; right before Cineworld experienced a long steady seven-year upward trajectory.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So&#8230; how?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let&#8217;s come back at the end of this page, and see if we&#8217;ve thought about it anymore.<\/p>\n\n\n\n<h3 id=\"cb-ambiguity\" class=\"wp-block-heading\">3. The key insight &#8211; core benefit as the root of all marketing<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">That title is a somewhat bold claim. I seem to be making a lot of those recently, but let&#8217;s see if I can back it up.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So let&#8217;s say that you have the operant resources to buy the components and assemble one of these things for sale:<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"699\" src=\"https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/Laptop-1024x699.jpg\" alt=\"A black generic laptop that is open, with a blank screen\" class=\"wp-image-855\" style=\"width:512px;height:350px\" srcset=\"https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/Laptop-1024x699.jpg 1024w, https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/Laptop-300x205.jpg 300w, https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/Laptop-768x524.jpg 768w, https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/Laptop.jpg 1240w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Lapton and screen have (clipping paths) on white<\/figcaption><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">Let&#8217;s say it costs me $800 to make it (once I&#8217;ve paid for all the parts, someone to put it together, etc). What can I sell it for? Maybe $900? Maybe $1,000?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">My problem is that if I can put one together for $800, then you can too, and probably so can a lot of other people. Whatever my price, one of you is going to undercut me and steal all my sales. That will keep happening until I reduce my price to $800.01 &#8211; at which point I&#8217;m making a penny per sale.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If I want to sell my computer for more money then I could maybe make it faster, but so could all my competitors too. If it costs me $850 to make one with better chips in it, my competitors can bid my selling price down to $850.01.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is how a lot of real markets work. If I want to buy some copper (the metal), I can look up the <a rel=\"noreferrer noopener\" href=\"https:\/\/www.macrotrends.net\/1476\/copper-prices-historical-chart-data\" data-type=\"URL\" data-id=\"https:\/\/www.macrotrends.net\/1476\/copper-prices-historical-chart-data\" target=\"_blank\">current price<\/a>, which is US $3.84&nbsp;per pound as I write this. Nobody&#8217;s copper is better than anyone else&#8217;s (copper is just copper), so I have no reason to pay anyone a penny more, and they have no reason to sell it to me for a penny less. $3.84 is the price. It&#8217;s simple supply and demand. You know what the curve looks like:<\/p>\n\n\n<div class=\"wp-block-image is-style-default\">\n<figure class=\"aligncenter size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"500\" height=\"500\" src=\"https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/supply-demand.png\" alt=\"Standard economics supply and demand graph, showing Price on the X axis, and Quantity on the Y axis. There is a downwards sloping demand curve that meets an upwards sloping supply curve, and where they meet is labelled the 'efficient price'. A golden X is placed on the supply curve, much higher than the efficient price\" class=\"wp-image-854\" style=\"width:375px;height:375px\" srcset=\"https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/supply-demand.png 500w, https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/supply-demand-300x300.png 300w, https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/supply-demand-150x150.png 150w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">There is an efficient price where the supply and demand curves meet. This is Economics 101. But you see that golden X? The one that has a higher price and quantity than consumers should be willing to buy? That&#8217;s where a marketer might WANT to sell their product &#8211; more of it, for and for a higher price. But that is impossible, right?<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"313\" height=\"163\" src=\"https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/MacBook.jpg\" alt=\"A silver Mac laptop\" class=\"wp-image-861\" srcset=\"https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/MacBook.jpg 313w, https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/MacBook-300x156.jpg 300w\" sizes=\"auto, (max-width: 313px) 100vw, 313px\" \/><figcaption class=\"wp-element-caption\">Oh wait&#8230; these guys seem to have done it<\/figcaption><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">Ok. It&#8217;s possible. BUT HOW?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is where the bold claim comes in: They can do it because of marketing.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is what marketing does. This is why marketing exists.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Ok&#8230; <strong>BUT HOW?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Perhaps there have been times when Macs had a better actual product &#8211; when they were thinner or faster or more reliable. But their competitors have largely caught up on all those fronts &#8211; they can make computers just as fast and light that are still somewhat cheaper&#8230; And yet, people still buy those more expensive Macs#up.<\/p>\n\n\n<div class=\"brxe-div footnote_anchor\"><div class=\"brxe-div footnote_shifter\">\n<pre class=\"wp-block-verse\">#down. I used to believe the Mac propaganda that they don't crash. Until I married a Mac person, and discovered their rainbow spinny wheel of death.<\/pre>\n<\/div><\/div>\n\n\n<p class=\"wp-block-paragraph\">So if the actual product is largely the same, then perhaps it is the core benefit that is different? After all, that is the thing you are really paying for.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let&#8217;s go back to basics, then: What is the core benefit of a laptop? Think about it for a minute, you should be good at this by now.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Do you have your answer?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Well, you can type essays on it, you can watch videos, you can play some games, you can browse the web&#8230;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But hm, those are the same for both Macs and PCs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So are we missing something?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let&#8217;s come back to this in a little. But first, let me ask you about a different product:<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"276\" height=\"549\" src=\"https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/Creme-Anti-Rides-50.jpg\" alt=\"A tube of Guinot brand anti-wrinkle cream\" class=\"wp-image-862\" style=\"width:207px;height:412px\" srcset=\"https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/Creme-Anti-Rides-50.jpg 276w, https:\/\/illuminated-text.com\/cb\/wp-content\/uploads\/sites\/2\/2023\/05\/Creme-Anti-Rides-50-151x300.jpg 151w\" sizes=\"auto, (max-width: 276px) 100vw, 276px\" \/><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">What is the core benefit of anti-wrinkle cream?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It gets rid of wrinkles, right. But that&#8217;s only a benefit if people <strong>want<\/strong> to get rid of them. And why do people want to do that?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You&#8217;ve got a long list of reasons, right? <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">I&#8217;ll put mine in this little accordion fold. Give it a try first, and see how many you can get. <\/p>\n\n\n\n<div class=\"wp-block-pb-accordion-item c-accordion__item js-accordion-item no-js\" data-initially-open=\"false\" data-click-to-close=\"true\" data-auto-close=\"true\" data-scroll=\"false\" data-scroll-offset=\"0\"><h5 id=\"at-415\" class=\"c-accordion__title js-accordion-controller\" role=\"button\">Anti-wrinkle cream: core benefits<\/h5><div id=\"ac-415\" class=\"c-accordion__content\">\n<ul class=\"wp-block-list\">\n<li>To look younger (we live in a culture with a strong fear of aging)<\/li>\n\n\n\n<li>To look more like some celebrity they follow, or a movie star<\/li>\n\n\n\n<li>To look healthier<\/li>\n\n\n\n<li>To feel more beautiful and attractive to others (&#8220;look at that glow&#8221;!)<\/li>\n\n\n\n<li>Raw aesthetic preference for smooth skin<\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">I have five there. How many did you get? Did you get some I didn&#8217;t? (leave a comment for me at the bottom of this page if you did).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Why does this matter? Marketing 101 is that you &#8216;position&#8217; products against others, in the eyes of consumers. If you look at how anti-wrinkle cream companies position their products you see a lot of them aiming to appeal to these various core benefits. I even did this for you. Every single one of the following things was read (by me) directly off the package for an anti-wrinkle cream:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There are claims that they do &#8216;smart repair&#8217;, that they &#8216;firm and lift&#8217;, or &#8216;tighten&#8217;, that they are &#8216;nourishing&#8217; or &#8216;micro-sculpting&#8217; or &#8216;brightening&#8217; or &#8216;rejuvenating&#8217;, that they make skin &#8216;supple&#8217;. They have names that imply these benefits (without making a specific medical claim) like &#8216;regenerist&#8217; or &#8216;rejuveness&#8217;, &#8216;bio retinol&#8217;, &#8216;lumity&#8217;, and &#8216;mesoestetic&#8217; (to me that last one sound like it is trying to be some kind of scientific theory of aesthetics). You also see claims for obscure ingredients like rose petal oil, rose butter, collagen, placenta, olive oil, shea butter, panthenol, argan oil, and turmeric#up. Those ingredients might seem like these are claims about the actual product, but when placed on the front of the bottle they are (in marketing parlance) &#8216;reasons to believe&#8217; &#8211; that is, they are there to add at least a veneer of credibility that the core benefit on offer might really come true. <\/p>\n\n\n<div class=\"brxe-div footnote_anchor\"><div class=\"brxe-div footnote_shifter\">\n<pre class=\"wp-block-verse\">#down. None of these do anything that a cheap moisturizer won't do just as well: puffing a bit more water into your skin to plump it out briefly. There's a surprisingly entertaining \"Science vs.\" <a rel=\"noreferrer noopener\" href=\"https:\/\/open.spotify.com\/episode\/7wZDuNWsjomZ2B1LeC8esC\" data-type=\"URL\" data-id=\"https:\/\/open.spotify.com\/episode\/7wZDuNWsjomZ2B1LeC8esC\" target=\"_blank\">podcast episode<\/a> where they go through the science, and find there is only one skin cream that relaibly produces lastingly smoother skin. Hint: It's not expensive, and probably not what you think either. Also, there's <a rel=\"noreferrer noopener\" href=\"https:\/\/www.youtube.com\/watch?v=o8pQLtHTPaI\" data-type=\"URL\" data-id=\"https:\/\/www.youtube.com\/watch?v=o8pQLtHTPaI\" target=\"_blank\">a pop song<\/a> with an alternate take on skin lines<\/pre>\n<\/div><\/div>\n\n\n<p class=\"wp-block-paragraph\">Again, I didn&#8217;t make any of those up. Every single one is a claim that somebody got paid good money to make.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The hope of the marketers is that by convincing people that your product unlocks some different core benefit, it can set itself apart from other products as a meaningful option to improve your life in some way. And if they can do that, perhaps their skin cream will be worth more to you than just a generic anti-wrinkle moisturizing cream would be. And then you will buy more of it, at a higher price point. In other words, they want it to take on some enhanced value that lets it escape from being an interchangeable commodity, and help it slide over to that impossible golden X on our supply-demand curve above.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" id=\"ambiguous\">Importantly, the reason many different brands can do this, even when they are all in the same category (such as the category of anti-wrinkle creams) is because the connection between a product and the core benefit it offers is often somewhat subtle and <strong>ambiguous<\/strong>. The same product can have multiple different core benefits to different people &#8211; or even layered in with the same person &#8211; and there is plenty of room for people to imagine different ways that the product can deliver those benefits in different or unique ways. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So linking products with core benefits is often not as obvious an activity as you would imagine (did you immediately list off five the moment I asked you about face cream?). If you get a job working in a marketing office in Manchester, London, Shanghai, or New York. In Toronto, Mumbai, Sydney, or Bankok, then this is one of the things you will spend a lot of time thinking about; Working out what the core benefit of different products are, what they <strong>can <\/strong>be, and how products can be designed or presented to link to them. You will spend not only time and energy thinking about this, but possibly also a lot of money (on focus groups, interviews, observations, and other forms of market research). It is more difficult than it might seem, which is one of the reasons that people who do it well can be paid quite handsomely.<\/p>\n\n\n\n<div class=\"wp-block-group definition_block has-background is-content-justification-left is-nowrap is-layout-flex wp-container-core-group-is-layout-14d7fe8f wp-block-group-is-layout-flex\" style=\"background-color:#fcb90017\">\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"definition_term wp-block-paragraph\"><strong>Ambiguity of Core Benefits<\/strong><\/p>\n<\/blockquote>\n\n\n\n<p class=\"definition_definition wp-block-paragraph\">Products can have core benefits that are multiple, layered, and subtle; Often to the point that even the people who consume them can struggle to articulate what they are. This opens a lot of the space in which marketers do much of their work. <\/p>\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\">&#8220;Ah ha!&#8221;, I hear you say. &#8220;That&#8217;s just because people don&#8217;t understand the biology of how anti-wrinkle creams work. Surely they wouldn&#8217;t be fooled#up so easily by other types of products!&#8221;<\/p>\n\n\n<div class=\"brxe-div footnote_anchor\"><div class=\"brxe-div footnote_shifter\">\n<pre class=\"wp-block-verse\">#down. Is it really 'fooling' people? Or is it just letting them lead a richer internal life, in which they see greater depth of meaning in their possessions? We leave that question to the philosophers among you<\/pre>\n<\/div><\/div>\n\n\n<p class=\"wp-block-paragraph\">Maybe you are right. But let&#8217;s go back to thinking about laptops again. What is their core benefit? Writing essays is an obvious one, but are there other ambiguous and subtle ones? Benefits that might convince people they are worth spending a lot more money on?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here is one of the most famous Apple ads made. Probably one of the most famous ads ever:<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"Apple - Think Different - Full Version\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/5sMBhDv4sik?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">So is your Apple computer just helping you write essays? Or are people spending money on something more? Something that is hard to put your finger on &#8211; intangible, subtle, ambiguous as to whether it&#8217;s even really there?<\/p>\n\n\n\n<h3 id=\"conceptual_consumption\" class=\"wp-block-heading\">Conceptual consumption<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Perhaps you still don&#8217;t believe us when we tell you how subtle core benefits can be? Or perhaps you believe us only a little bit.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let&#8217;s take it to the next level: It turns out that core benefits don&#8217;t even have to be from consuming the thing itself. Ariely and Norton <span class=\"zp-InText-zp-ID--4193465-CUXIQ873--wp41 zp-InText-Citation loading\" rel=\"{ 'pages': 'np', 'items': '{4193465:CUXIQ873}', 'format': '(%d%)', 'brackets': '', 'etal': '', 'separator': '', 'and': '' }\"><\/span> argue that sometimes people consume concepts (hence their name: &#8220;conceptual consumption&#8221;). <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On some level, the core benefit of a product is always conceptual (i.e., it happens inside consumers&#8217; heads), but conceptual consumption is about it getting even more subtle than that. Sometimes this just means that the actual product itself is an idea (examples: news, or celebrity gossip), other times (more interestingly) the core benefit isn&#8217;t a direct result of using the actual product (e.g., experiencing clean teeth, relaxation, or holes), but instead is a psychological <strong>side-effect#<\/strong>up of the consumption process. Ariely and Norton list four ways this can happen. We will explain two of these here: expectancies and perceptual fluency. For the record, their other two ways are goals (which we will discuss in chapter 3) and regulatory fit (which is beyond the scope of this book).<\/p>\n\n\n<div class=\"brxe-div footnote_anchor\"><div class=\"brxe-div footnote_shifter\">\n<pre class=\"wp-block-verse\">#down. If you prefer your language fancy, you could say that it refers to core benefits that are an \"<a rel=\"noreferrer noopener\" href=\"https:\/\/www.merriam-webster.com\/dictionary\/epiphenomenon\" data-type=\"URL\" data-id=\"https:\/\/www.merriam-webster.com\/dictionary\/epiphenomenon\" target=\"_blank\">epiphenomenon<\/a>\" of the consumption process<\/pre>\n<\/div><\/div>\n\n\n<h5 class=\"wp-block-heading\">1. expectancies. <\/h5>\n\n\n\n<p class=\"wp-block-paragraph\">How do you consume an expectancy? Let us ask you a question: Are you happier before you go on holiday, or after you get back?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Logically you should be happier after. That&#8217;s what you pay for, after all: relaxing on the beach!<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But when we ask our classes this question, almost everybody votes for being happier before#up. Why? Because before the holiday you get to sit in your work cubicle dreaming about funny coloured drinks with little paper umbrellas in them, but afterwards, you are stuck &#8216;back in real life&#8217;. <\/p>\n\n\n<div class=\"brxe-div footnote_anchor\"><div class=\"brxe-div footnote_shifter\">\n<pre class=\"wp-block-verse\">#down. Evidence suggests they are probably right in this intuition <span class=\"zp-InText-zp-ID--4193465-D9F6GPXD--wp41 zp-InText-Citation loading\" rel=\"{ 'pages': 'np', 'items': '{4193465:D9F6GPXD}', 'format': '(%a%, %d%, %p%)', 'brackets': '', 'etal': '', 'separator': '', 'and': '' }\"><\/span>.<\/pre>\n<\/div><\/div>\n\n\n<p class=\"wp-block-paragraph\">The parts of the holiday you have to buy are the transit to get there, renting a place to sleep, food and drinks, etc. That&#8217;s the stuff you pay for. Dreaming about it doesn&#8217;t cost a penny. But in another sense, though, this daydream is exactly what you are paying for; Your train and hotel tickets wouldn&#8217;t be worth nearly as much if they didn&#8217;t help you escape from the drudgery of everyday life for the few weeks leading up to it. Part of what you are buying is the chance to enjoy the <strong>expectation <\/strong>of your upcoming trip.<\/p>\n\n\n\n<h5 class=\"wp-block-heading\">2. perceptual fluency. <\/h5>\n\n\n\n<p class=\"wp-block-paragraph\">This is a somewhat subtle idea that we&#8217;ll discuss in depth in our persuasion chapter, but for now, let me ask you this question: What is it like when you can&#8217;t use your normal brand of toothpaste? When, for some reason, you are stuck using someone else&#8217;s? It just tastes &#8216;wrong&#8217;, am I right? It just feels like it&#8217;s slightly off somehow. Why is that? Are the other brands so much worse than your regular one really? Nope. If you kept on using the new one you would get used to it fairly quickly (I&#8217;ve had to do this a few times and, believe me, it never gets easier). <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here&#8217;s another one: When you are feeling a little sad, what would you look for as comfort food? I remember discussing this with a Taiwanese friend. For me, it was something full of pasta and tomato sauce, but it was noodle soup for her. Neither of our choices sounded right to the other person. In both our cases, though, it was food we grew up with, that our mothers had made when we were little. That raw familiarity loaned the food an extra emotional value that went beyond its immediate taste and ingredients.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Even stock traders, who you would think would be hyper-rational and beyond such emotional frivolity, get in on the act. One of the examples that Ariely and Norton cite is a study showing that stocks with pronounceable names (like &#8220;ORCL&#8221;) performed better than stocks with names that were hard or impossible to pronounce (like &#8220;INTC&#8221;) &#8211; to the point that one could potentially make considerably more money by investing in them <span class=\"zp-InText-zp-ID--4193465-GB2BQCP6--wp41 zp-InText-Citation loading\" rel=\"{ 'pages': 'np', 'items': '{4193465:GB2BQCP6}', 'format': '(%a%, %d%, %p%)', 'brackets': '', 'etal': '', 'separator': '', 'and': '' }\"><\/span>. Presumably, there are now trading algorithms that try to take advantage of this, so the effect may not show anymore, but it is amazing that it ever existed. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The thing that makes this trading example similar to the ones about toothpaste and comfort foods is that they are all about how easy a thing is for our brain to process. If it is highly familiar then our brain has practice at processing it, and that ease gives us a little warm glow of feeling &#8211; psychologists call this &#8216;perceptual fluency&#8217;.<\/p>\n\n\n\n<h5 class=\"wp-block-heading\">So what?<\/h5>\n\n\n\n<p class=\"wp-block-paragraph\">Core benefits, then, are not only often subtle and ambiguous, but sometimes they come (at least in part) from &#8216;epiphenomena&#8217; of consumption &#8211; secondary effects that aren&#8217;t even directly from consuming the thing itself.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Wrapping it up<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Once you understand the ambiguous and subtle nature of core benefits, you begin to see an insight that lies at the very root of what marketing is. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As one of my grad school professors put it (shout out to Peter Bloch): Marketing is the study of ambiguity. Because if you know exactly what a product is, and what it will do for you, then there is no role for marketing &#8211; just supply and demand for commodities with interchangeable units.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Or, as it was put (more succinctly) by someone whose products you might have heard of:<\/p>\n\n\n\n<figure class=\"wp-block-pullquote\"><blockquote><p>&#8220;Anybody can make gum, the trick is to sell it&#8221;<\/p><cite>William Wrigley Jr, 1925<\/cite><\/blockquote><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Now we have one last question for you:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Remember how we told you back in the intro that this is the most important class in business school? <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Well&#8230; <strong>do you believe us yet?<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Review<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">{pods_post_review}<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\"\/>\n\n\n\n<div id='zp-InTextBib-zotpress-6a661df55a31d78b3c1967777853699a' class='zp-Zotpress zp-Zotpress-InTextBib wp-block-group zp-Post-41'>\r\n\t\t<span class=\"ZP_ITEM_KEY ZP_ATTR\">{4193465:PYX58PJ6};{4193465:YGE3BCRY};{4193465:PYX58PJ6};{4193465:J9FQ7Z7Q};{4193465:DL8LG9B9};{4193465:XWAB455U},{4193465:4XJ6YQXZ};{4193465:L84TKW3C};{4193465:CUXIQ873};{4193465:D9F6GPXD};{4193465:GB2BQCP6}<\/span>\r\n\t\t<span class=\"ZP_STYLE ZP_ATTR\">apa<\/span>\r\n\t\t<span class=\"ZP_SORTBY ZP_ATTR\">creator<\/span>\r\n\t\t<span class=\"ZP_ORDER ZP_ATTR\">asc<\/span>\r\n\t\t<span class=\"ZP_TITLE ZP_ATTR\"><\/span>\r\n\t\t<span class=\"ZP_SHOWIMAGE ZP_ATTR\"><\/span>\r\n\t\t<span class=\"ZP_SHOWTAGS ZP_ATTR\"><\/span>\r\n\t\t<span class=\"ZP_DOWNLOADABLE ZP_ATTR\"><\/span>\r\n\t\t<span class=\"ZP_NOTES ZP_ATTR\"><\/span>\r\n\t\t<span class=\"ZP_ABSTRACT ZP_ATTR\"><\/span>\r\n\t\t<span class=\"ZP_CITEABLE ZP_ATTR\"><\/span>\r\n\t\t<span class=\"ZP_TARGET ZP_ATTR\"><\/span>\r\n\t\t<span class=\"ZP_URLWRAP ZP_ATTR\"><\/span>\r\n\t\t<span class=\"ZP_FORCENUM ZP_ATTR\">0<\/span>\r\n\t\t<span class=\"ZP_HIGHLIGHT ZP_ATTR\"><\/span>\r\n\t\t<span class=\"ZP_POSTID ZP_ATTR\">41<\/span><div class='zp-List loading'>\n<div class=\"zp-SEO-Content\"><\/div><!-- .zp-zp-SEO-Content -->\n<\/div><!-- .zp-List --><\/div><!--.zp-Zotpress-->\n\n\n","protected":false},"excerpt":{"rendered":"<p>When you buy a thing, what are you actually buying? A concept fundamental to the very existence of marketing<\/p>\n","protected":false},"author":1,"featured_media":180,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[1],"tags":[],"chapter":[3],"exclude_from_index":[16],"class_list":["post-41","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","chapter-1-decision-making","exclude_from_index-include"],"_links":{"self":[{"href":"https:\/\/illuminated-text.com\/cb\/wp-json\/wp\/v2\/posts\/41","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/illuminated-text.com\/cb\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/illuminated-text.com\/cb\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/illuminated-text.com\/cb\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/illuminated-text.com\/cb\/wp-json\/wp\/v2\/comments?post=41"}],"version-history":[{"count":19,"href":"https:\/\/illuminated-text.com\/cb\/wp-json\/wp\/v2\/posts\/41\/revisions"}],"predecessor-version":[{"id":4260,"href":"https:\/\/illuminated-text.com\/cb\/wp-json\/wp\/v2\/posts\/41\/revisions\/4260"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/illuminated-text.com\/cb\/wp-json\/wp\/v2\/media\/180"}],"wp:attachment":[{"href":"https:\/\/illuminated-text.com\/cb\/wp-json\/wp\/v2\/media?parent=41"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/illuminated-text.com\/cb\/wp-json\/wp\/v2\/categories?post=41"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/illuminated-text.com\/cb\/wp-json\/wp\/v2\/tags?post=41"},{"taxonomy":"chapter","embeddable":true,"href":"https:\/\/illuminated-text.com\/cb\/wp-json\/wp\/v2\/chapter?post=41"},{"taxonomy":"exclude_from_index","embeddable":true,"href":"https:\/\/illuminated-text.com\/cb\/wp-json\/wp\/v2\/exclude_from_index?post=41"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}