Dialogue. The Consumer’s Hierarchy of Preferences—The Other Side of The Consumer Value Prop

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Oct 2, 2023

In this podcast, the hosts introduce the Consumer's Hierarchy of Preferences framework and discuss its application in understanding the market and competitors' offerings. They explore examples like Chipotle versus Taco Bell and Etsy. The podcast also delves into the importance of cash flow durability and fulfilling psychological needs in brands like See's Candy. Additionally, the hosts touch upon real-world applications, sustainability preferences, and the role of product differentiation in entrepreneurship.

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ADVICE

Podcast Formats

Consider three podcast formats: deep dives, company updates, and dialogues.
Dialogues explore business frameworks, investing ideas, and lessons from research.

INSIGHT

Consumer's Hierarchy of Preferences

The Consumer's Hierarchy of Preferences framework helps understand consumer desires and product market fit.
It builds upon Maslow's Hierarchy of Needs but focuses on product preferences, not basic needs.

ANECDOTE

Thanksgiving Plate Metaphor

Consumers prioritize different preferences when making purchases, like choosing a sweater.
The Thanksgiving plate metaphor illustrates how preferences coexist and influence each other.

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This week on The Synopsis, we introduce our Consumer’s Hierarchy of Preferences framework in a new episode format. The Consumer’s Hierarchy of Preferences is a helpful idea for investors and entrepreneurs to better understand the market, their products, and competitors’ offerings. You can check out our original writing introducing the idea here.

This show is the first of our “Dialogue” format, which will be episodes focused on business frameworks or other investing ideas. We will return with a Deep Dive on a specific company next time. We hope you enjoy!

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Show Notes

(0:00) Intro, New Show Concept

(1:37) Explaining the Consumer’s Hierarchy of Preferences

(7:26) Product Market Fit Through a Different Lens, Where the Jobs Framework Fits In

(11:34) Chipotle versus Taco Bell Example

(14:38) Etsy’s Consumer’s Hierarchy of Preferences

(16:43) Cash Flow Durability, Consumer Surplus as Churn Mitigation

(21:23) Brands, See’s Candy, Fulfilling Psychological Needs

(24:51) Real World Applications of the Framework, Chipotle Again, Retail Apparel Companies

(29:17) More Examples, Amazon, Fine Dishware, Temu, Shein, Depop, Facebook Marketplace

(32:50) Sustainability as a Potential Preference, Tesla, Patagonia, Allbirds

(36:15) Summarizing Key Aspects of the Framework and When to Implement

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Become a Speedwell Member here to gain access to all of our research reports: https://speedwellresearch.com/subscribe/

Our first Consumer’s Hierarchy of Preferences Piece: https://speedwellresearch.com/2022/11/18/the-consumers-hierarchy-of-preferences-the-other-side-of-the-consumer-value-prop/

Our second Consumer’s Hierarchy of Preferences Piece: https://speedwellresearch.com/2023/02/04/the-consumers-hierarchy-of-preferences-two-ends-of-the-strategy-spectrum/

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Disclaimer

Nothing in this podcast is investment advice nor should be construed as such. Please see our full disclaimers here: https://speedwellresearch.com/disclaimer/