The real value of a product / service

Another interesting story by Akio Morita in his book, “Made in Japan”:

They were finally able to produce a magnetic tape recorder – a technological feat at the time. It weighed 35kilos, and they priced it at 170,000yen – by my estimates it’s probably equivalent to 3 million yen in today’s economy.

The problem, Morita-san said, “Everybody liked it, but nobody wanted to buy it.”

“I then realized that having unique technology and being able to make unique products are not enough to keep a business going. You have to sell the products, and to do that you have to show the potential buyer the real value of what you are selling.” [emphasis mine]

Morita-san’s “a-ha!” moment came when he passed by an antique store, and saw someone buy an old vase that was more expensive than their tape recorder. Surely his product was a better bargain than an old vase! But, coming from a family that values art (his grandparents were art collectors) – he realized “that the vase had perceived value to the collector of antiques, and that he had his own valid reasons for investing that much money in such an object.”

“At that moment, I knew that to sell our recorder we would have to identify the people and institutions that would be likely to recognize value in our product.

Long story short, they found a market that desperately needed a way to record voices. And they sold 20 units “almost instantly.”


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