Bowman’s Strategy Clock

Bowman’s Strategy Clock is a Tool that helps to understand How Products are Positioned in the Market.

• Its name comes from the person Who invented it: Cliff Bowman.

Its aim is to create a Visual Representation of Product Positioning that can be applied to all Types of Products.

• A Representation in the shape of a Clock.

To do so, it proposes to Analyze every Product based on 2 Dimensions.

• 1. Perceived Value (by Customers): How Customers Regard the Product.
  • How much Customers Value the Product.

• 2. Price: The Price of the Product.
  • The Relative Price, compared to the Average Market Price.

Then, Bowman’s Strategic Clock assigns each of these 2 Dimensions 3 Different Values:

• Low.
• Medium.
• High.

Two Dimensions of Bowman’s Strategy Clock.

These divisions give 8 Possible Strategic Positionings as result:

• The option Medium-Medium is neglected.

Bowman’s Strategy Clock Template.

* We have proposed a slightly different classification than the traditional one.

• We think this Classification gives more clues about the type of Product that tends to be in each Category.

Let’s see them in detail with some examples:

Products with: Low Price and Low Perceived Value tend to be basic Products:

• Products that we use in our Day to Day, and we don’t care much about them.
• First Need Products we don’t even know the Brand.
• Products in which we don’t look for better options.

Example

We’re sure that you have a pair of scissors in your home.

• Do you know its brand?

Probably not.

• It is the kind of product you don’t even remember where you bought it from.

In these type of Products it is very difficult to “fight” for good margins.

• People simply buy the first option they find.

Products with: Low Price and Medium Perceived Value tend to be Occasional Products People like.

• Products where People look for Better options but don’t get crazy about it.
• Products where you have Preferences but not very strong ones.
• Products where you can name different Brands and why you like them.

Example

Think about Chips.

• Maybe, your favorite are Lay’s but… If there is only Pringles in a party, you won’t have much of a problem.

We all have a favorite Chips but… We like Chips over their Brand.

This makes difficult for these Products to improve their Market Share.

• Because people like them… But not enough to stick with just one option.

Products with: Low Price and High Perceived Value tend to be Whims.

• Products we proactively consume, but only if they are of a certain Brand.
• Products we Love and consume frequently.
• Products with certain Values associated to them.

Example

If you like McDonald’s, you probably choose it over other Fast Food Restaurants.

Probably, you also like Burger King, or KFC.

• But when you go to McDonald’s, you do it on Purpose.

Maybe you love their Big Mac, or it reminds your childhood.

These types of Products must be mass produced (they are cheap) to be Profitable.

Products with: Medium Price and High Perceived Value tend to be Affordable Desirable Products.

• Products that you Desire and can Afford from time to time.
• Products that you can buy once a week or once a month.
• Products that you feel attached to.

Example

Converse Sneakers are legendary.

• Many people are crazy about them.

And everybody that loves them, can afford to buy them (or almost everybody).

• They are Unique, everybody recognizes them and everybody can purchase them.

These type of Products need High Quality or Associated Values to be Profitable.

• Otherwise, companies couldn’t charge more that their competitors.

Products with: High Price and High Perceived Value are Market Benchmarks.

• These are products everybody loves.
• The Best products you can find in a certain Market.
• The products that people are willing to pay more.

Example

You probably can’t afford a Porsche (and neither can we).

• But, if you like cars, you would easily agree that a Porsche is one of the Best cars money can buy.

Everybody knows that, Porsche is synonym with:

• Quality.
• Performance.
• … And Wealth.

These type of Products are very Profitable, but Require a lot of Reputation.

• And an Impeccable track Record by their Brand.

Products with: High Price and Medium Perceived Value tend to be Utilitarian Products.

• Products that are better than the Average and you pay more for their Quality.
• Products that you Buy on Rare Occasions and want them to last for years.
• Products that don’t have lots of Competitors.

Example

How many times in your life will you buy a Drill?

• Once, twice? (Assuming you are an average person).

That is Why, when you get yourself a Drill, you usually buy a good one.

• Because they are relatively expensive and you want them to last for years.

Also, all the options in the Market are relatively expensive so, as you will have to spend an important amount of money (like it or not) you want the Drill to be a good one.

In these Products, Quality has to be Maintained or Improved.

• Otherwise, Customers can quickly change their Preferences.

Products with: High Price and Low Perceived Value tend to be Captive Products.

• Products that People pay because they have to.
• Products practically nobody likes to purchase.
• Products that have no Alternative.

Example

You maybe have an Anti-Virus (we do).

Think about this: Have you ever get excited about buying a new Anti-Virus?

No. Nobody does.

• You resign yourself to do it.

These products can be very Profitable but, as soon as Customers can do without them… They don’t hesitate.

Products with: Medium Price and Low Perceived Value tend to be Products with little Competition.

• Products that people don’t mind paying for, but are always looking for a Cheaper Option.
• Products whose Brands don’t say much to Customers.
• Products to which people have little Brand Loyalty.

Example

Think about your phone service company.

• You know it is important what it does, and that you need it…

But if tomorrow another company offers you lower prices… You would Change.

• Without a doubt.

In these Products, Companies should try to retain their Customers.

• With economic incentives, offers, commercials, etc.

Now, before we see more and more detailed examples, we want to share some Tips on How to Use Bowman’s Strategy Clock:

First, Objectively assess where your Product is.

• Look at your Market, your Competitors and be honest.

Identify where your Product could be Positioned.

• Be Realistic: don’t confuse Desire with Reality.

Improving Perceived Value requires Important Investments.

• In Brand, and/or Quality standards.

To Improve the Price of your Product, Go for Uniqueness.

• Since “Need” is inherent to the Market.

Look for the Niche where your Product can be Competitive.

• Don’t try to tackle big Markets: Focus on small Niches with little Competition.

Now we will give you more Examples so that you understand this Tool much better:

We have chosen 3 famous companies and analyzed How their Products are Positioned in the Market.

• Using Bowman’s Strategic Clock.

Let’s see what we can learn from these Businesses:

At the beginning, Starbucks started as a Premium Coffee Business.

• Their intention was to sell high quality coffee. Nothing more.

We could say that their Product was: Low Price and Medium Perceived Value.

• Although Starbucks Coffee is good… People could do it with another Coffee.

* We say Low Price, compared with Premium Coffee options (Colombian, Jamaican, etc).

• Remember: They were “Competing” in the Premium Coffee Market.

But, over the years, Starbucks decided that their Market was not the Premium Coffe Market, but the Cafeteria Market.

They:

• Focused on the interiors (of their Cafeterias).
• Offered free wifi.
• Offered food items.
• etc.

In this New Market, its Perceived Value Improved.

• People were willing to pay to Stay in a Comfortable Place for hours.

Nowadays, Starbucks belongs to:

• Low / Medium Price (this could be nuanced) and High Perceived Value.
  • There are much more expensive Cafeterias (like Blue Bottle Coffee).

We say Low Price because, even if  their Coffe is not Cheap, if you include everything (Wi-Fi, the toilet, and place) the Price is affordable.

• You won’t be ruined by going to a Starbucks regularly.

Other Cafeterias or “Social Places” are much more expensive, compared to Starbucks.

• Usually, local Cafeterias.

Starbucks is currently in the Category: Cheap Whims People Love.

IKEA is a good example of a Company that has Improved its Perceived Value over the years.

Not many years ago, people regarded IKEA as the worst type of furniture possible.

Over the years, IKEA:

• Kept improving their Designs.
• Invested in In-Store expositors.
• Introduced very different Products.
• Offered affordable meals.
• Opened special places for Children in the Stores.

In this way, IKEA attracted families to enter their stores and see the Different Designs they had developed.

Once inside IKEA made money with Two Different Types of Product:

Day to Day Products – Low Price and Low Perceived Value:

• Kitchen Utensils.
• Mugs.
• Scissors.
• etc.

Usually, Products that Replace the broken Products that customers have in their homes.

• Every time I go Into an IKEA Store I buy Wine Glasses.

First Need / Not-Really-Necessary Products – Low Price and Medium Perceived Value:

• Affordable tables (we all have a “Lack” table).
• Cheap chairs.
• Closets that are incredibly cheap.
• etc.

Why we say Not Really Necessary Products?

• Because People have become almost “addicted” to wandering around an IKEA Store and buying something… Because they can afford it.

And that has been the secret of IKEA’s success (among many others):

• At IKEA, many People buy First Need Products as Whims.

As you can imagine, Apple’s products are considered to be the Best in the Market.

• iPhone is the Benchmark for mobile Phones.
• iPad is the Benchmark for Tablets.
• MacBook Pro is the Benchmark for Laptops.
• iWatch is the Benchmark for Smartwatches.
• Air-Pods are the Benchmark for Earbuds.
• Air-Pod Max are the Benchmark for Headphones.

Its products have: High Price and High Perceived Value, with no Exception.

But, this extremely good position came with a lot of effort over the years.

Not long ago, Apple products were considered to be:

• Expensive.
• Of Good Quality.
• Unique and Different in design.
• With lots of disadvantages compared to its Competitors.
  • Especially incompatibility issues.

People bought Apple products because:

• They lasted more than its Competitors.
• They already had an Apple Product and its “Environment” (Software, Programs, etc).
• They were “cooler“.

Back in those days, Apple’s Product were of: High Price and Medium Perceived Value.

Over the years, Apple:

• Developed a very Good Environment that didn’t need external sources.
• Improved its Compatibility with external Software.
• Allowed Microsoft Products to be installed into their system.
• Improved the Quality of their Products.
• Released Amazing Products.

With all these Improvements, Apple’s Reputation and Perceived Value Skyrocket.

And That is why, at the time we write this, it is the largest Company in the World.

• By Market Capitalization.

Bowman’s Strategy Clock is a Tool that helps to understand How Products are Positioned in the Market.

To do so, it proposes to Analyze every Product based on 2 Dimensions:

1. Perceived Value: How Customers Regard the Product.
2. Price: The relative Price, compared to the average Market Price.

Then, Bowman’s Strategic Clock assigns each of these 2 Dimensions 3 Different Values:

• Little.
• Medium.
• High.

These divisions give 8 Possible Strategic Positionings as result:

• Low Price – Low Perceived Value.
• Low Price – Medium Perceived Value.
• Low Price – High Perceived Value.
• Medium Price – High Perceived Value.
• High Price – High Perceived Value.
• High Price – Medium Perceived Value.
• High Price – Low Perceived Value.
• Medium Price – Low Perceived Value.