What Is Diminution of Value?

Product value is the value generated by the product's function, characteristics, quality, variety and style. It is the central content of customer needs and the first factor for customers to purchase products. Therefore, in general, it is the key and main factor that determines the total value of customers' purchases. Product value is determined by customer needs. When analyzing the value of a product, it should be noted that in different periods of economic development, customers have different needs for the product, and the elements that make up the value of the product and the relative importance of various factors will also differ. ^[1]

product value

Right!

Product value is the value generated by the product's function, characteristics, quality, variety and style. It is the central content of customer needs and the first factor for customers to purchase products. Therefore, in general, it is the key and main factor that determines the total value of customers' purchases. Product value is determined by customer needs. When analyzing the value of a product, it should be noted that in different periods of economic development, customers have different needs for the product, and the elements that make up the value of the product and the relative importance of various factors will also differ. ^[1]

Product value is determined by customer needs. When analyzing product value, pay attention to:

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1. Improved product functions

As product functions increase and costs decrease, product value is expected to increase significantly. For example, the rapid development and application of new technologies can enable products that achieve a certain function to achieve greater breakthroughs in structure or method. This not only helps to improve product functions, but also reduces product costs at the same time, thereby enabling The value has been greatly improved. The change from tube to transistor to integrated block reflects this fact.

2, at the same cost, so that the function has improved

Increase value. For example, many daily necessities, due to the increasing requirements of people, are officially obsolete and tedious design products are not welcomed, such as the appropriate re-design of their products, so that their styles and colors are adapted to the changing times, To increase their functionality (especially aesthetic functions) without increasing costs to increase product value

3. The function is unchanged, the cost is reduced, and the value is increased.

For example, the emergence of new materials and new technologies can reduce costs on the premise that it can fully meet the functional requirements of the original product; it is not as good as the excess life of some parts in the product, and the overall life of the product is appropriately maintained. Reducing the life of components (the overall function remains the same) can reduce product costs and increase value.

4. The cost increases slightly, the function increases, and the value increases.

For example, in the development of a product from a single function to a multi-function, although the cost has increased, the function has increased exponentially, which has greatly increased the value.

5. The function is slightly reduced, and the cost is greatly reduced.

For example, some products reduce the function appropriately, but still meet the needs of some users, but because the technical conditions (raw materials and processes, etc.) for achieving this level of function are relatively mature, the cost is greatly reduced, and the value of the product is increased. .

Improving product value is not only a requirement of users but also a goal pursued by enterprises. However, enterprises can't simply pursue the improvement of functions, nor can they reduce the costs one-sidedly. Instead, they must use the methods of increasing value in product design and product improvement design to explore all methods that can increase the value to meet the actual needs of users and improve Technical and economic benefits of the enterprise.