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Value is one of the top-level components customers use to determine their personal interest in a brand. Therefore, choosing prices becomes an integral brand pricing strategy for a brand. Below are two useful recommendations when determining value and price.
Reasonable Prices
People often establish a reasonable pricing in their minds for a category of products or services. A “reasonable price” is the price at which people expect or determine to be acceptable for a certain type of product. Here are some common factors that might affect reasonable prices:
- Past pricing experiences
- Pricing references (competitive prices, pre-sale prices, manufacturer’s suggested prices, channel-specific prices, marked prices before discounts, substitute product prices)
- Current price comparisons with other brands
- Presentation of pricing whether shown as a whole product or pricing per quantity / unit
Consumer Sensitivity
What flexibility is there in the price setting that might cause changed behavior amongst the population of consumers? It is important to know how a brand’s price or change of it will impact consumer response and sales. Some business people think that simply raising the selling price of an item will ultimately enhance the business’s bottom line. But some situations have proven that doesn’t always hold true. If a brand chooses to change their pricing, it becomes important that they prep the customer based with information to justify their reasoning for the change. In doing so, customers tend to continue to stay loyal to the brand and product.
If you are seeking assistance in establishing pricing that reflects the quality of your brand, be sure to get in touch with us here at MatthewVermeer.com so we can assist you in this process.
