Harvard Business Review’s Post

Interesting article

Came across an interesting conversation on marketing and its history. While the manifestations of the same have been there since time immemorial, but the spotlight on it as a science has been a century old when it started making its way to the dictionary (alongside the word “market”) and then to mainstream academics & professional practice. In its nascent stage, it was primarily about supply and demand economics, where pricing was the fundamental driver. Majority businesses focused on producing goods, setting aggressive prices, and pushing their products to as many consumers as possible. It was indeed a straightforward transaction --> the right price would attract the right volume of sales. Straight from the Adam Smith Economics 101. Fast Forward, the landscape has drastically evolved. It is way more complex than just pricing; it is more about having a compelling value proposition for customers and understanding their needs. Not discounting the fact that arriving at the right pricing and solid distribution network would play a key role too. It is no longer surprising that brands that wish to win in the long term remain focused on building meaningful relationships with their customers in every touch point possible within value chain. This means providing exceptional value and engaging in authentic conversations on the benefits of the products. Winning the consumer is no longer an option; it is a necessity for the business. Goes without saying that overcoming this challenge will be crucial for building a solid business on path to a sustainable growth! #Marketing #SundayMusings #Meaningfulconnections

"The Psychology of Pricing" is a subject of interest for both business and academic circles. It is an area of research that attempts to understand how different factors influence the perception of prices, and how consumers make decisions about purchasing products and services. The study of pricing psychology has gained importance in recent years, as businesses strive to compete in crowded markets, where price has become a key factor in customer decision-making. Understanding the psychology of pricing can help businesses to develop effective pricing strategies that appeal to their target markets. The psychology of pricing is a complex subject that involves various factors, such as the perceived value of a product, the context in which it is sold, and the consumer's emotional response to the price. It is also influenced by external factors such as economic conditions, market competition, and social norms. In conclusion, the psychology of pricing is a critical area of research for businesses that wish to stay competitive in today's market. An understanding of the factors that influence consumer behavior and decision-making can help businesses develop effective pricing strategies that are both profitable and appealing to their target market. For more, visit www.edubridge.com.ng #pricing #target #branding #principlesofpricing

“Research: How Price Changes Influence Consumers’ Buying Decisions” 📈💵 Consumers have easy accessibility to price tracking services, letting them see how the price of a specific project changed over time. What impact does this have on their purchasing decisions? Check out this article from Harvard Business Review to see the results from a series of experiments that answer this exact question. https://bit.ly/3WozxfK #Research #PriceTracking #CustomerExperience

What George Akerlof’s classic paper “The Market for Lemons” reveals about brands and their purpose. The paper focuses on the effects of asymmetric information between buyers and sellers in markets. -The quality of goods can be hard for buyers to determine before purchase. 🔍 -Sellers usually have more knowledge about their products and know whether they are high or low quality. 🧠 -Dishonest sellers can create profit for themselves while hurting the market overall by passing off low quality goods as high quality. 💸💔 -Buyers don’t want to buy or pay as much if there is a chance that they are being ripped off. This risk makes buyers cautious.🤔 -This information asymmetry leads to lower trust between buyers and sellers -> lower sales and prices for all sellers. The lack of trust harms the market's efficiency. 📉 -Dishonest sellers drive out honest sellers because they cannot charge a higher price even when it is justified by higher quality. Honest sellers struggle to compete and may leave the market. 🚫 -Brands can lower quality uncertainty by creating a reputation for high quality products. Trustworthy brands help buyers feel more confident in their purchases. ⭐️ -Reputable brands benefit from increased sales by maintaining trust and keeping markets healthy. Trust leads to more sales and a healthier market overall. 📈 #marketing #brand #economics 

Did you know that either one large price decrease or a number of small regular price increases is more likely to encourage customers to buy now?! Why? Simply because customers expect that prices will rise again soon, prompting them to take action before that happens. This was discovered as part of a study in Harvard Business Review, undertaken to identify the impact on purchasing behaviour of different types of price changes. 💡 If you’re thinking about a price increase, consider how the direction and frequency of price changes (both past and future) will influence your customers’ perceptions. Discover more about this study: https://lnkd.in/eerdAjhS #BuyerBehaviour #PricingStrategy #Pricing

Demand is precisely driven through three things: 1. Willingness to pay (Need, marketing etc.) 2. Ability to pay (EMIs, small packs etc.) 3. Availability (Supply Chain agility, Quality etc.)

Really informative article about industrial mark-to-market and other fundamentals.

🛍️ New Year's sale is coming!Are you planning to lower your prices?Discover the power of the 0.99 PLN price and increase your profits!🔍 Scientific basis: Research from Tilburg, Monash and Cornell Universities reveals that prices ending at .99 PLN (e.g., 0.99 PLN vs. 1.00 PLN, 49 PLN vs. 50 PLN) are most effective when: 1. Displayed next to the original price: By showing the original price next to the discounted price (e.g., was 9.50, now 7.99), the discount appears larger, attracting customers' attention. 2 Perception of a bigger difference: People see a bigger difference between prices like 8.00 PLN vs. 6.99 PLN than 8.01 PLN vs. 7.00 PLN, even with the same price difference. 3 Greater effect on casual and new buyers: The effect is stronger on customers who rarely buy the product than on regular customers. 🧠 Why it works. Price comparison method: When prices are listed side by side, we focus on the first digits, which makes the difference appear larger. Single price evaluation: When we only look at a single price, our mind rounds up the amounts, so PLN2.99 is perceived as close to PLN3. 📊 Example in practice: A price of €49.99 next to the old price of €55 will definitely attract more attention than simply €50. #ecommerce #pricestrategy #ClawRock #increaseprofits #new year'ssale

Time to Flip the Script on Pricing Strategies Ditch the $0.99 mindset. It's outdated and could be holding your sales back. Consider this: A 2022 study unveiled a counterintuitive approach to pricing that doubled the upgrade conversion rate. When researchers moved from the traditional 'just below' pricing to a 'just above' or round number pricing, the willingness to upgrade soared from 28.95% to a staggering 55.56%. Why? The psychology of spending changes when prices cross that round number threshold. Upgrading feels like a bargain, not a stretch. So, if your pricing ends in .99, it's time for a bold experiment. Test the waters with a $50 or $51 price point instead of $49.99. The result could be a significant uptick in your Average Order Value (AOV). Are your pricing strategies ready for a refresh? Share your experiences or plans to innovate your pricing approach below. Let's discuss the psychology of pricing and its impact on consumer behaviour.