Though we may desire many things, we tend to focus our efforts on a select few that we truly value.
Value of the innovation
Establishing a budget for the development of a new product must align with the perceived value of the innovation. It is essential to gauge market demand by evaluating consumers’ willingness to pay for the benefits offered and identifying the size of the target segments.
What is the alternative?
Alternatives are always present, such as ride-sharing services that enhance customer experiences by connecting them with car owners as an alternative to taxis. Evaluating the costs of these alternatives helps us understand the true value of innovation in context.
Price optimization
Understanding customer preferences enables the strategic structuring of pricing to attract a broader audience. Airline companies often employ complex pricing models for additional services, allowing them to reduce the base fare for straightforward transportation while simultaneously maintaining revenue from customers seeking greater flexibility and comfort.
Successful innovation can make your company Fly
Airlines, hotels, car rentals, and taxis were traditionally viewed as mature industries. However, companies like Ryanair, Uber, and Airbnb have made travel more accessible to a wider audience, resulting in job creation and profitable ventures. Key factors for their success included small yet significant improvements and competitive pricing.