The right blend of product quality, design, features, costs, and prices is very difficult to achieve but well worth the effort. Many managers are woefully unaware of how price can and should relate to what customers think of a product, and they therefore charge too little or too much.

For example, in implementing its value-pricing strategy for the Cascade automatic-dishwashing detergent brand, Procter & Gamble made a cost-cutting change in its formulation that had an adverse effect on the product’s performance under certain– albeit somewhat atypical– water conditions. Lever Brothers quickly countered, attacking Cascade’s core equity of producing “virtually spotless” dishes out of the dishwasher.

In response, P&G immediately returned to the brand’s old formulation. The lesson to P&G and others is that value pricing should not be adopted at the expense of essential brand-building activities. By contrast, with its well-known shift to an “everyday low pricing” (EDLP) strategy, Procter & Gamble did successfully align its prices with consumer perceptions of its products’ value while maintaining acceptable profit levels.

In fact, in the fiscal year after Procter & Gamble switched to EDLP (during which it also worked very hard to streamline operations and lower costs), the company reported its highest profit margins in 21 years. Achieving and conveying the right blend of product or service value can harness the extra power of your overall marketing performance.