(Excerpt from Price, wants, needs and perils of urgent by Seth Godin)
There are four quadrants, and the thing you offer can fit into one of them.
- Low-priced wants – Because it’s cheap, it might appeal to the masses. Because it’s a ‘want’, you’re not going to kill anyone if it doesn’t work now and then.
- High-priced needs – your profit per unit is in the thousands, but the room for failure is precisely zero. You won’t sell a lot, and every single one of them better work.
- High-priced wants – Perhaps you want to offer a luxury good, something that’s clearly a want, and not a matter of life and death. You won’t sell many of your $15,000 handbags, but that’s okay, because the margins are great. But it better increase my status!
- Low-priced needs – people are always happy to pay a bit less for something they really need. If you fail to invest in keeping your promise, everything falls apart.