The Basics of Marketing (4 Ps) - Continued
In the previous article, I highlighted how important it is to know your product and what solution it can provide to your customers, and what makes it special and stand out from the crowd, thus, the PRODUCT STRATEGY.
Today, I will be talking about how much a customer is willing to spend on your product/service, and how can you make that purchasing decision making process easier!
Some brands fall in the trap of 'market rates', trying to position their PRICING STRATEGY around the market average prices - which is not wrong - understanding the market rate is definitely beneficial when deciding on your prices, BUT, it all has to be linked together - the product, what you are offering, the place, where you are offering it, the people, whom are the target segment and what are their purchasing/consumption habits.
For instance, if you are planning to sell a unique product/service, in an upscale location - where most customers own their own houses, cars, probably are at executive or leading positions in their careers - you CANNOT sell at a market average or less. You will have to distinguish yourself. Not only because your target segment can actually afford that, but because the brand value and positioning is also important for the customers' perception, thus the sustainability of your product. Think of it this way: did Burberry ever price any of its products like Zara or H&M? NOPE! They might be seen in the same location (Mall) but definitely in different areas or zones!
On the other hand, selling a mass commodity/service that targets different segments of the society, means you will have to make your product/service available at market rate OR a bit less or more depending on your Product Offering (what is the unique selling point), along with the location and knowing your target segment.
In conclusion, understand your PRODUCT and PEOPLE so you can set your PRICE. And don't undermine your price just for the sake of being scare of pushing people away, nor overdo the price and actually scare the people away when your product/brand has nothing too special to offer for that value (which is okay!). If someone wants a Bic pen they can pay $0.5 for one, but if they want a Mont Blanc they should be ready to pay $500 for one!