You can build the best product in your industry, but if it’s overpriced, overdesigned, or misunderstood by your market, it won’t sell.
That’s why Rene T. Domingo, adjunct professor at the Asian Institute of Management and operations consultant to leading firms, says companies must start thinking beyond just quality—and start focusing on value for money, or VfM.
“In most industries, whether business-to-business or business-to-consumer, prices are determined by buyers and competitors rather than by the producers or service providers,” Domingo explains in an exclusive interview with Financial Adviser PH. “A high-quality, high-cost, high-price model is no longer a viable proposition in competitive markets.”
Why VfM Is the New Competitive Edge
VfM—value for money—isn’t just a pricing strategy. It’s a strategic lens for measuring whether your product truly meets customer expectations at the right cost.
“The VfM of a product is the perceived value or quality it delivers relative to its price,” says Domingo. This includes not just the sticker price but also the total cost of ownership (TCO), especially for long-term products and services. Buyers today are making smarter, more deliberate decisions—especially in a post-pandemic, budget-conscious world.
He adds, “B2B clients may stipulate price reductions upon contract renewals or freeze prices despite increases in the supplier’s production costs.” That means companies can’t just keep adding features or refining specs without considering whether the customer is willing—or able—to pay for them.
How to Measure Value Versus Price
Domingo breaks down VfM simply: it’s about the ratio of quality to price. Even a product with excellent engineering and flawless performance can still be considered low value if it’s not competitively priced.
“High-quality, high-priced items can have low VfM if they are overdesigned, over-engineered, or under-designed and overpriced,” he says. “Likewise, low-priced but unreliable or substandard products will have low VfM since their total costs of ownership will be driven up by repairs, downtime, and higher operating and usage costs.”
That’s why Domingo encourages businesses to go beyond technical quality. When customers assess a product, they aren’t just asking, Is this good? They’re asking, Is this worth it?
When Great Quality Isn’t Good Enough
“Quality improvement programs often ignore cost reduction as an equally important and parallel goal,” Domingo observes. He says too many organizations assume that “customers will always pay any price for excellent quality”—and that’s a costly mistake.
Buyers, especially repeat or long-term ones, are increasingly sophisticated. They evaluate your product in terms of VfM, Cx (customer experience), CVP (compelling value proposition), and TCO before committing.
“The days of ‘build it (well) and they will come (and pay any price)’ are over,” Domingo warns. “Instead, buyers will say, ‘build it well, and this is my price (or your competitor’s price to match and beat).’”
If It’s Not Competitive, It’s Not Quality
Companies must stop treating cost and pricing as afterthoughts. VfM must be embedded into the design, production, and delivery of every product. As Domingo puts it, “Better quality does not always lower the costs to the customer.”
The smart companies aren’t just asking how to improve quality—they’re asking how to enhance perceived value while keeping costs competitive.
Because in today’s market, the real question isn’t How good is your product? It’s How good is your product for the price?
