In the marketplace, perception is reality.
You can have in fact the best product in the market but that is useless if the customers’ don´t perceive that, or even worse, if the customers perceive another product as better than yours when in fact that is not true.
You must keep in mind that Pricing is not only a tool to generate revenues or margin. Pricing is also the key statement about the quality of your product.
To be successful, when you design the price of your product you need to consider the costs, the required margins, competition prices and also the current customer perception of your brand.
Why the current customer perception of your brand is so important when you design your Pricing Strategy?
If there is lack of consistency between your prices and your brand image perception, customers will have trust issues with you, because your overall messages are conflicting.
Example: If you already positioned your brand in the market as a low cost service provider and you launch a new service in the market with a premium price, your new service and in the long term also your all business may be in jeopardy because you are losing consistency and customers don´t trust conflicting messages and customers tend to avoid brands that they don’t trust.
So, the key conclusions are:
Pricing is not only about margins… Pricing is also a powerful brand positioning tool.
You can have in fact the best product in the market but that is useless if the customers’ don´t perceive that, or even worse, if the customers perceive another product as better than yours when in fact that is not true.
You must keep in mind that Pricing is not only a tool to generate revenues or margin. Pricing is also the key statement about the quality of your product.
Remember that no one believes that the cheapest product in the store is the best one, therefore Pricing is also a powerful brand positioning tool.
To be successful, when you design the price of your product you need to consider the costs, the required margins, competition prices and also the current customer perception of your brand.
Why the current customer perception of your brand is so important when you design your Pricing Strategy?
The answer is… Trust.
If there is lack of consistency between your prices and your brand image perception, customers will have trust issues with you, because your overall messages are conflicting.
Example: If you already positioned your brand in the market as a low cost service provider and you launch a new service in the market with a premium price, your new service and in the long term also your all business may be in jeopardy because you are losing consistency and customers don´t trust conflicting messages and customers tend to avoid brands that they don’t trust.
So, the key conclusions are:
Pricing is not only about margins… Pricing is also a powerful brand positioning tool.
- Your Pricing Strategy must be aligned with your Brand Positioning Strategy
- If not, you will trigger trust issues in your customers that in the long term may jeopardize all your business.
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