10 Considerations for Pricing a Product or Service

   Using Generative AI in Developing Marketing Strategies

Last semester I introduced the use of generative AI in my Marketing Strategy and Planning classes. I found that AI actually improved the students' ability to develop solid marketing strategies and plans using the foundations I have used for strategic marketing planning.

The foundation I use in these classes at the University of Houston's Bauer College of Business is the MVOSSTE approach.The MVOSSTE acronym stands for Mission, Vision, Objective, Situation Analysis, Strategy, Tactics and Execution. 

Mission refers to the reason the organization exists. This does not necessarily relate to a specific service or product but more generally what the organization hopes to accomplish. For example, a healthcare organization might have as a mission statement: To provide a means for better health and longer life spans for people of all ages.

Vision refers to how the organization will create value for customers, collaborators and the organization (company). For the health care organization above, the vision might be: To create a line of products and services that can be delivered to the general public.

Objective refers to a goal or goals established for the organization. These goals must be measurable in order to gauge the organization's success in reaching the goals. For example, the goal for the organization above might be to market a sustainable subscription service for telemedicine services within two years.

Situation Analysis refers to the research that will be required to identify the target market, legal requirements, initial investment requirements, competition and so on. This phase also allows the organization to study the possibility of being a market disruptor and strategies that might make current market player in this arena irrelevant.

Strategy refers to the use of Price, Place, Product and Promotion sub strategies to create value for the Customer, the Collaborators and the Company. It is very important to make certain that each of the 4 Ps (price, place, product and promotion) create value for each of the 3 Cs (customers, collaborators and company). This will require the determination of the "sweet spot" for each of the 4Ps for each of the 3Cs. 

Tactics refers to the use of a workforce (Manpower), financial resources (Money), operating procedures (Methods) and fixed assets (Machinery) to put the strategy in a executable form.

Execution refers to the Planning, Organizing, Directions and Controls required to implement the strategically defined tactics.

Product Idea Generation

The MVOSSTE lenses used to guide the strategy and plan do not change but can be enhanced using AI. For example, if you were to decide to create the company above and wanted an idea of products and services that could be offered you might ask an AI platform such as ChatGPT to create a list of products and services that might be offered using the mission and vision statements above, the response would be as follows:

Certainly! Here's a list of potential products and services aligned with the mission and vision of providing better health and longer life spans:

1. Nutritional Supplements:

   • High-quality vitamins and minerals tailored for different age groups.
   • Nutrient-rich meal replacements for convenient and balanced nutrition.

2. Fitness Programs:

   • Customized workout plans for various fitness levels and age groups.
   • Virtual fitness classes and personalized training sessions.

3. Telehealth Services:

   • Remote health consultations with healthcare professionals.
   • Online health monitoring and tracking tools.

4. Wellness Retreats:

   • Retreats focused on holistic well-being, including nutrition, fitness, and mindfulness.

5. Health Monitoring Devices:

   • Wearable devices for real-time health tracking.
   • Smart home health devices for continuous monitoring.

6. Healthy Meal Delivery:

   • Pre-prepared, nutritionally balanced meals delivered to customers' doors.
   • Subscription-based healthy meal plans.

7. Mindfulness and Stress Reduction:

   • Meditation and mindfulness apps.
   • Stress management workshops and counseling services.

8. Genetic Testing and Analysis:

   • Personalized health recommendations based on genetic information.
   • Genetic counseling services.

9. Anti-Aging Skincare Products:

   • Skincare products with ingredients promoting skin health and vitality.
   • Sunscreen and anti-aging creams with scientifically proven benefits.

10. Health Education Platforms:

    • Online courses and workshops on nutrition, exercise, and overall well-being.
    • Educational content on maintaining a healthy lifestyle.

11. Senior Care Services:

    • Home healthcare services for the elderly.
    • Assistance with daily activities and companionship services.

12. Corporate Wellness Programs:

    • Workplace wellness initiatives to promote employee health and productivity.
    • Employee assistance programs for mental health support.

13. Personalized Health Apps:

    • Apps that provide personalized health recommendations based on user data.
    • Gamified health apps to encourage healthy habits.

14. Community Health Initiatives:

    • Initiatives to create health-conscious communities.
    • Community gardens, fitness clubs, and walking groups.

15. Clinical Trials and Research:

    • Support and participation in clinical trials for innovative health solutions.
    • Funding research projects focused on longevity and health.

These products and services can contribute to achieving the mission of better health and longer life spans for people of all ages while aligning with the vision of creating a line of accessible and beneficial offerings for the general public.

This allows the ability to think about a larger array of products and services than might have been generated by a team of two or three people.

Situation Analysis

When moving to the research phase asking AI to give a list of research on potential products and services might yield the following:

To determine the best products or services among the listed options, thorough research is essential. Here are key areas of research that can help in making informed decisions:

1. Market Research:

   • Identify target demographics and their specific health needs.
   • Analyze competitors offering similar products or services.
   • Understand market trends, consumer preferences, and purchasing behavior.

2. Health Trends and Scientific Studies:

   • Stay updated on the latest health and wellness trends.
   • Review scientific studies related to nutrition, fitness, and longevity.
   • Consider emerging technologies and advancements in healthcare.

3. Consumer Surveys and Feedback:

   • Conduct surveys to gather direct feedback from potential customers.
   • Analyze customer reviews and testimonials from similar products or services.
   • Identify pain points and preferences of the target audience.

4. Regulatory Compliance:

   • Research and understand regulatory requirements for health-related products and services.
   • Ensure compliance with health and safety standards.

5. Partnerships and Collaborations:

   • Explore potential partnerships with healthcare professionals, nutritionists, and fitness experts.
   • Collaborate with research institutions for scientific validation.

6. Prototype Testing:

   • Develop prototypes or minimum viable products (MVPs) for testing.
   • Conduct pilot programs or beta testing to gather real-world feedback.

7. Cost-Benefit Analysis:

   • Evaluate the cost of production, distribution, and marketing.
   • Estimate potential revenue and conduct a cost-benefit analysis.

8. Technology Feasibility:

   • Assess the feasibility of incorporating technology, such as wearables or health monitoring devices.
   • Consider the accessibility and user-friendliness of technological solutions.

9. Cultural Sensitivity and Localization:

   • Understand cultural differences in health preferences and practices.
   • Localize products and services to cater to specific cultural needs.

10. Long-Term Health Impact:

    • Research the long-term health impact of the products or services.
    • Consider preventive health measures and potential contributions to longevity.

11. Economic and Social Impact:

    • Evaluate the potential economic and social impact of the offerings.
    • Consider how the products or services contribute to societal well-being.

12. Environmental Impact:

    • Assess the environmental sustainability of the products or services.
    • Consider eco-friendly packaging and production processes.

13. Brand Reputation and Trust:

    • Research and build a strong brand reputation.
    • Establish trust through transparent communication and quality assurance.

14. Pricing Strategy:

    • Determine competitive and reasonable pricing based on market research.
    • Consider pricing models that align with customer value perceptions.

15. Iterative Improvement:

    • Implement a system for continuous improvement based on feedback and evolving health trends.
    • Stay adaptable to changes in the market and consumer needs.

By conducting comprehensive research in these areas, you can make informed decisions about which products or services are likely to be most effective and well-received by your target audience.

Creating Market Space (a subset of Situation Analysis)

AI could also be asked about being a market disruptor or making the competition irrelevant.

To become a disruptor or create a blue ocean in the health and wellness industry, the company can adopt innovative strategies that set it apart from existing competitors and redefine the market. Here are some approaches to achieve disruption and create a blue ocean:

1. Identify Unmet Needs:

   • Conduct in-depth research to identify unmet needs or pain points in the current health and wellness market.
   • Target underserved segments or address issues that existing products or services haven't effectively tackled.

2. Innovative Product/Service Design:

   • Introduce truly innovative and unique products or services that provide a distinct value proposition.
   • Consider disruptive technologies, such as AI-driven personalized health recommendations or breakthrough nutritional solutions.

3. Holistic Solutions:

   • Offer holistic solutions that integrate multiple aspects of health, combining nutrition, fitness, mental well-being, and preventive care.
   • Create an ecosystem that addresses a range of needs, providing an all-encompassing health experience.

4. Customization and Personalization:

   • Emphasize customization and personalization in products and services.
   • Leverage data analytics and AI to tailor offerings to individual preferences, health conditions, and goals.

5. Accessibility and Affordability:

   • Focus on making health and wellness accessible to a broader audience.
   • Consider innovative pricing models, subscription services, or partnerships to increase affordability.

6. Digital Health Platforms:

   • Develop a robust digital health platform that integrates telehealth, virtual coaching, and data-driven insights.
   • Embrace emerging technologies like augmented reality (AR) or virtual reality (VR) for immersive health experiences.

7. Community Building:

   • Foster a community around the brand, creating a sense of belonging and shared health goals.
   • Utilize social media and online platforms to connect customers and build a supportive community.

8. Environmental Sustainability:

   • Integrate sustainability into the company's ethos and products.
   • Emphasize eco-friendly practices, such as sustainable sourcing, minimal packaging, and a commitment to reducing the carbon footprint.

9. Partnerships and Collaborations:

   • Collaborate with unexpected partners, such as tech companies, entertainment industry, or unconventional health and wellness experts.
   • Explore cross-industry partnerships to bring fresh perspectives and capabilities.

10. Emotional Branding:

    • Build a brand that connects with consumers emotionally.
    • Tell compelling stories that resonate with the target audience and create a strong emotional bond.

11. Education and Empowerment:

    • Focus on educating consumers and empowering them to take control of their health.
    • Provide resources, tools, and information that enable users to make informed decisions.

12. Agile and Iterative Approach:

    • Embrace an agile and iterative approach to product development.
    • Be open to learning from customer feedback and adapting quickly to market changes.

13. Global Expansion:

    • Explore opportunities for global expansion, targeting markets with untapped potential.
    • Adapt offerings to cater to diverse cultural and regional health preferences.

14. Strategic Marketing:

• Develop a strategic marketing campaign that positions the brand as a disruptor and highlights its unique value proposition.
• Focus on creating a memorable and differentiated brand identity.

By combining several of these strategies, the company can create a blue ocean, carving out a niche that is distinct from existing competitors and expanding the overall market for health and wellness products and services.

Core Competencies (more Situation Analysis)

Ai can help define the competencies needed for this company and might generate the following: 

To successfully execute the mission of providing better health and longer life spans and achieve the vision of creating innovative products and services, the organization would need a set of core competencies. These competencies should align with the unique challenges and opportunities in the health and wellness industry. Here are key core competencies for such an organization:

Health and Wellness Expertise:Deep understanding of health sciences, nutrition, fitness, and overall well-being.Employ qualified professionals, such as nutritionists, fitness trainers, and healthcare experts.

Data Analytics and AI:Expertise in leveraging data analytics and AI to provide personalized health recommendations.Ability to interpret health data for continuous improvement of products and services.

Innovative Product Development:Capability to innovate and develop groundbreaking products and services.Agility in responding to emerging health trends and technological advancements.Digital 

Health Technology:Proficiency in developing and maintaining robust digital health platforms.Integration of telehealth, wearable technologies, and other digital solutions.

Behavioral Psychology:Understanding of behavioral psychology to design solutions that motivate and sustain healthy habits.Ability to create engaging and user-friendly interfaces for health applications.

Sustainable Practices:Commitment to environmental sustainability in product design, sourcing, and manufacturing.Knowledge of eco-friendly practices and certifications.

Caution in using AI

In using AI the user must recognize that the information may be incomplete or inaccurate. This requires a test of reasonableness on all of the AI generated information. The user should also understand that AI is naive in that it understands your situation only to the extent it has been explained to AI.

I tell my students to use it as a tool not a source that can do the work. The user has to define parameters and then direct AI to do specified tasks. For example, if, in the organization described above, a decision was made to choose pursue products that were service based and served only a segmant of the population the this information would be input and a revision of the first list would be created.

Next Blog

In my next Blog I will cover Strategy, Tactics and Execution uses of AI. In the meantime if you have questions please feel free to contact me.