Bowman Strategy Clock Training Video
Bowman Strategy Clock Best Practices
The Bowman Strategy Clock was developed by economists Cliff Bowman and David Faulkner and is a powerful strategy positioning tool used to gather information on a company’s market position relative to the competition. Bowman’s Strategy Clock shows how product positioning is based on two dimensions: price and perceived value.
More about Bowman Strategy Clock
Description of Bowman Strategy Clock
The Bowman Strategy Clock fits eight different combinations of price and perceived value on a clock face, divided into four quadrants. When deciding how a product will be positioned, a company can choose a position from the Bowman Strategy Clock which offers the most competitive advantage. The eight possible positions on the clock are described below, starting at the 12:00 and rotating clockwise around the face.
Position 1. Low price and low added value: Products in this position are not differentiated and are not perceived as having high value. It is not the most competitive position on the Clock. The low price is the only competitive advantage the product has at this point.
Position 2. Low price: In this position, products are mass-produced and have good value. The profit margin is low but is made up for by the high production volume and generally profits are high. Economies of scale are put into effect in this position and price wars often occur among competitors.
Position 3. Hybrid: This position on the clock is usually very effective, because the products in this position are differentiated and low priced. As a result, products have a high degree of perceived value by the customer and are therefore in high demand.
Position 4. Differentiation: In this position, companies offer high quality at an average price, which results in a high degree of perceived value. At this position, customers become more brand-loyal and will try to select these products, even willing to pay slightly more for them.
Position 5. Focused Differentiation: Luxury and exclusive brands focus on this clock position, as it is where high quality meets a high price. Brands use targeted segmentation, promotion and distribution as sales and marketing tools, which lead to higher profit margins. Since competitive brands reside in this segment also, they work together to keep prices high.
Position 6. Risky high margins: Products in this segment are priced high and the customer’s perceived value is just mediocre. This position is very risky and will most likely ultimately fail. Most customers will eventually look for a higher quality product in the same price range or a similar product for a lower price.
Position 7. Monopoly Pricing: In this position, companies have the advantage of being the only contenders offering the product. There is no fear of competition and brands can determine their own pricing, and customers only have the choice of purchasing the product or not. The customer does not have other products to choose from. In most countries, monopolies are regulated in order to prevent them from charging exorbitant prices or offering an inferior product.
Position 8. Loss of market share: In this position, a company is not able to offer a valuable product to the customer, and the customer will not purchase. Prices are too high and market share is lost.
By analyzing its position on the Bowman Strategy Clock, a company will become more aware of its position in the market as compared to their competitors. The ideal locations on the clock are in positions 3, 4, and 5, where profits and perceived value are highest. Positions 6, 7, and 8 are the least favorable and riskiest for a company to choose to be.
Praxie's Online Bowman Strategy Clock Tools & Templates
When it comes to developing the right pricing and value strategy for your product or service, it is integral to understand how the product is positioned based on its sticker price and the perceived value it provides to the customer. Strategists that want a straightforward way to define a clear pricing strategy can use the new online Bowman Strategy Clock template from Praxie to place their product somewhere on the clock face based on the price and the perceived value to the customer.
The Bowman Strategy Clock tool is incredibly useful for strategy teams looking to combine other elements of market research about their products and services with customer feedback on price and perceived value data. Get started with our Bowman Strategy Clock template.
How to use it:
- Review the template and the different parts of the clock.
- List your products that apply to each section.
- Create an action plan for completing your Strategy Clock, including any research and input needed from key stakeholders or your team.
- Include actions based on addressing the implications or strategies that arise from completing your Strategy Clock.
Unlike most traditional strategy techniques, Praxie’s online Bowman Strategy Clock tools allow any team or organization to instantly begin working with our web templates and input forms. Our digital platform goes far beyond other software tools by including progress dashboards, data integration from existing documents or other SaaS software, elegant intuitive designs, and full access on any desktop or mobile device.