Answer Yourself! A blog by Sukhpreet Singh

A blog on personal development, entrepreneurship & change.

25th September 2007

How do you compete with free?

How do you compete with free products or with products that are already established before yours?

Get out there and do the work! Work to find how can you add value to consumers who use your product or service. Here are a couple of examples where a product or service compete against “free” or already established product or service.bottledwater.jpg

1) Bottled water vs. free tap water. Bottled water is $16 billion industry. But we have free water available so what are we paying $16 billion for? We’re buying the convenience. Bottled water goes with us to meetings, sport events, road trips, is by our bed at night, is with us on treadmill at the gym, and gives us company in our cubicles at work. Its convenient to pick one up and carry it around where ever you go.

2) Private schools vs. free public school education. According to a report published by the National Center for EducationSchool Statistics (NCES) in 2002, in 1999-2000, approximately 27,000 private schools accounted for 24 percent of all schools in the US. According to the National Association of Independent Schools (NAIS), the median tuition for a private day school in 2005-2006 in the United States was about $14,000 for grades 1 to 3, $15,000 for grades 6 to 8 and $16,600 for grades 9 to 12. Where as education at public schools is free. So why would parents pay over 14 grand per child per year? The reason is private schools usually add more value to the consumer (child and parents). Private schools usually have well-balanced class size, good safety reputation, special academic programs and much more to offer than a public school. And parents are willing to pay for that “extra” service and security.

3) iPod vs. any-other-mp3-players (cheap or expensive). Apple was not the first in the market with an mp3 player or even first one to come out with a hard drive based mp3 player. Then what made it a big blockbuster product?iPods

Joswiak credits the company’s ease of use—both with the music player itself and with the iTunes software that connects the iPod to either a Mac or a PC. The total package only became stronger when Apple added digital music sales via the iTunes Store, launched in 2003.

Soon iPod’s trendy looks became a status symbol that lead to increased loyalty. Same (convenience) holds true for iTunes’ 99-cent songs vs. free downloads from peer-to-peer networks. The convenience and smooth integration of the killer-product (iPod) with a killer-app (iTunes) was meant to capture the market like none other.

4) Clocky vs. gazillion other clocks. “The Clocky requires you to do more than stick your arm out and tap something,” saidRunning Clock Dr. Todd Swick, a sleep specialist at the Houston Sleep Center in Texas. “It will recruit more of your senses–actually getting up, finding it and shutting it off–and convince you to start the day.” When the alarm clock goes off and the snooze button is pressed, the Clocky rolls off the bedside table and onto the floor. It rolls on until it finds a suitable spot to hide and rest. When the alarm sounds again, the sleeper has to get out of bed and search for the clock to turn it off. By now the person is fully awake. Thus, Clocky performs better than other alarm clocks in ensuring that you get out of bed on time and of course its fun to see your partner run after a clock.

So do you have a product or service that is more convenient, performs better than other products in its category, has good usability features, is easier to use and adds more value to its user? Find “the need” that has not been fulfilled yet and fulfill it.

“Make yourself necessary to somebody.” – Ralph Waldo Emerson (American Poet, Lecturer and Essayist, 1803-1882)

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" TOO OFTEN WE ENJOY THE COMFORT OF OPINION WITHOUT THE DISCOMFORT OF THOUGHT. " - JFK. Thinking is required, commenting is optional. Please leave your thoughts...

  1. 1 On September 28th, 2007, Banta Singh said:

    One such comparision is Computers sold everywhere with Intel processors and other with AMD processors…. AMD works as good as Intel but for some reason, Intel has the monopoly and comparable or better computers with AMD sell for less than computers those have Intel in them.

  2. 2 On September 30th, 2007, Preet said:

    True. Who could think of standing up against Intel? Only AMD has had the stubbornness to compete against Intel for two decades and be able to hold more than a single digit of market share. AMD had 15% market share in 2006. Ironically, AMD got into the x86 business not by its own actions but by being convinced by Intel to become second-source manufacturer of the x86 architecture. IBM wanted to use Intel processor in its IBM PC, but IBM’s policy at the time was to require at least two sources for its chips and hence AMD came into picture.

    Regarding coming out with better processor and lower price, we’ve seen this time and again; one company leaps ahead of the other, only to be outdone months later. It will be interesting to see how much value can AMD add to its consumers to be able to become a formidable force against Intel [say 50% market share].

    Meanwhile, there are other factors too like antitrust violations – Intel might have been using “other tricks” to keep AMD from rising.
    Appreciate your comments

  3. 3 On October 9th, 2007, How much would you pay for a free music album? said:

    [...] my previous post, i had discussed about how would you compete with free. Here is a perfect example of a music band that found a way to add more value to its listeners and [...]

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