This series revisits the basics of branding and marketing by answering questions marketers, entrepreneurs and small business owners face when growing their business. I hope this series provides you with knowledge to think smarter and a nudge to make stuff happen.
What Role can Marketers Play in Pricing Strategy?
Pricing tells a story. There is always a story behind the reasons marketers choose to price a product no matter if the pricing strategy is high or low.
The common story behind many low-priced products is the company buys in bulk and passes on the savings to customers. A valid story, but an uninteresting one.
A more interesting story behind a low-priced product is told by IKEA. Customers get high design AND low prices at IKEA.
When it comes to charging high prices, having a great story is mandatory. The rule of thumb is: the higher the price, the richer the story needs to be.
The role marketers must play in pricing strategy is telling a story to match the price.
Apple is the poster child brand for telling rich stories to match its rich prices. Apple devices are never the cheapest on the market. Thus, Apple must tell a more interesting story in how its devices improve one’s life.
For lower priced products, the story doesn’t need to be all that interesting. (Ahem, Walmart.) But high-priced products must always deliver an interesting story to justify the higher price.
REVISITING THE BASICS | archive