Let's explore the concept of core products a bit more, meaning the central benefit that the product provides. Let's examine a couple of products and think of their core benefits. Some time ago I visited our wonderful business instructional facility, the BIF, at the Geese College, to ask some students about the central benefit provided by certain products. First I asked them about the ubiquitous iPhone. What benefit does the iPhone provide? Think about it, this one allows you to play music, take pictures, set up, appointment provides directions, lets you play games, helps you maintain your fitness and so on and so on. And yes it does allow you to make and receive phone calls, all from one device. So what benefit does this iPhone provide? Well, I came outside to ask several students at the University of Illinois in our wonderful business instructional facility to ask them about benefits that some of the products that we were discussing in class provides. So first we start with the iPhone, what benefits would it provide? When I said benefits I'm talking about this product providing value of some kind. So what benefits an iPhone provide? >> I mean it's a good way to communicate with people, I guess, I mostly use it for texting or calling my parents. >> Communication, calling your parents, good. >> Yeah. >> What about you? >> I think it's a convenience factor as well, I mean we're allowed to do a lot of things on our iPhone and smartphones in general. Whether that's social media apps, texting or calling through communication or even anything nowadays, right, you can even trade stocks on your phones. So I think it's a convenience factor. >> So the benefit you say is communication and the benefit you're saying convenience. >> Yeah. >> That's great, that's great. So the iPhone does provide benefits to consumers that satisfy their needs. For me, it's the convenience. Now what about the Lamborghini? The Lamborghini Aventador retails for about $400,000. What benefit would you derive from buying this car? I know I wouldn't buy it, but what do you think? Why do you think people buy this expensive car? It could not just be for the speed alone, right? Camaro or a Dodge Charger could actually get you around pretty fast at a fraction of the cost. So why would you buy a car that costs you almost $400,000? Let's ask. Now let's talk about the Lamborghini, Lamborghini automobile. Does a Lamborghini create value? I think if you can afford it, a Lamborghini definitely creates value for those who enjoy spending lavishly, because with the Lamborghini, it's really just the attention that you get with that. >> So you get attention? >> So I think if you value the attention then yes. >> So that's a benefit? >> But it depends on the person, yeah, and the consumer. >> Okay, what about you? What benefit does it provide? Does it provide value? >> I would say it provides value in the same way that Michelle described in that it has a lot of brand equity and people understand that if you're a Lamborghini owner, there's a certain status that comes along with that. Also kind of an attitude about life. I don't necessarily think the car itself is that much different from a Ferrari or a Lotus or anything in that price range, but in terms of the name, brand, it definitely provides a value to the person purchasing it because of what they can say that you own. >> Wow, I like that. What the cost says something about you, you said, basically tells other people something about you in terms of your status. >> Yes. >> Okay, great, the Lamborghini provide some value. We've heard from several consumers about how products and services create value. This occurs when companies provide benefits to the consumer in the form of products or services. Now these benefits all comprised the value proposition offered by the firm. What benefits can the firm provide to the consumer to satisfy their needs? The value proposition that firms offer must set them apart from the competition. It must give them a competitive advantage, so therefore it must be unique, it must be strong, and of course, it must be favorable. We'll discuss value proposition some more when we discuss positioning in the next module.
