Richard Coch says, “The two simplifying strategies — price simplifying and proposition simplifying — are very ifferent in what you have to do to make them happen, in what your objectives are and in the way you’re rewarded for success. By comparing and contrasting them, you can begin to think about which you and your business might be able to execute before anyone else has the same idea.

Let’s take a quick look at what these strategies are:

Price-simplifying: Create a mass market — simplify to make a product or service dramatically cheaper. Simplicity results in the product being easier to make, so simplicity for the producer matters most. The producer operates on low margins but enjoys massive growth in revenues.

Proposition-simplifying: Create a premium market — simplify to make the product or service dramatically better and a joy to use. Simplicity results in the product or service being easier to use and usually more useful and/or aesthetically appealing, so simplicity for the user matters most. The producer enjoys high margins and growth in both revenues and profits. The premium part of the market will normally be a smaller part of the total market than with price-simplifying, although in some cases proposition-simplifying can create a new mass market, as with smartphones”.

Price Simplifying Vs. Proposition Simplifying: Understanding Your Options

Entrepreneur

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