Value Pricing

Solving everyday problems is important.  Yet, adopting the long term perspective and creating solutions for the root cause of problems are necessary.

When a country lacks strength, the strategy to move out of poverty may be 1) investment in proven ideas and markets known to exist (fast runner-up) and 2) incremental buyer merit increase and lower price than competitors for similar benefits (economy of scale and lower production cost).
 
Issues arise when the assumptions can no longer be sustained.  For example, competitors may emerge with better cost of production based on lower labor cost or faster development by massive resource allocation.
  
To face the competition, production cost can be lowered even more or development speed can be increased, but these tactics tend to cause more strain on existing workers.  Additionally, increase in employee wage and non-monetary benefits may prove difficult and limited.

Another way to face the competition could be a switch in the strategy.  If the initial strategy was delivering price performance for medium merchandise (product and service) features, the next step can be value-pricing for hi specification merchandise.  In value-pricing, appropriate price will be demanded for products and services meeting buyer needs at a high level, and value will be promoted instead of pricing in the price-performance models.  For example, value promotion may include focusing on non-monetary benefits such as time reduction, ease of use, mean time between failures, recovery guarantee, or safety.  Monetary benefits, if required, can include lower cost during the lifetime of the product or service as opposed to the initial investment amount.  Needless to say, the market to target will shift to the people who appreciate the value.

These models should not be confused with the premium price versions which deliver luxury and status-inspiring features.
  
For short term economic increase, selling existing merchandise is one of the methods.  However, the long term perspective for evolution should not be lost in the daily struggles.