Pricing is much more than just 'Price'. That's mistake #1 when marketers are kept out of pricing discussions, because there are several key inputs that need to be addressed before "setting the price". No other person in an organization actually owns customer research. That's a marketer's domain. When determining what price to set for your product/service, you only get one shot at it (which is why it's always better to start high). 🚫 The most common method to pricing something is the 'cost plus pricing', where you calculate your total costs then layer on a mark up to make some profit. The issue with this approach is that it completely leaves the customer out of the equation, and oftentimes ends up significantly under-shooting your perceived value. 𝗣𝗿𝗶𝗰𝗶𝗻𝗴 𝗥𝗲𝘀𝗲𝗮𝗿𝗰𝗵 What pricing research does is it finds that sweet spot of how the market perceives your value. It tells you at what price point you begin losing people because it's too high, and at what price point you begin eroding your brand equity because it is too low. 𝗣𝗿𝗶𝗰𝗶𝗻𝗴 𝗖𝗼𝗺𝗺𝘂𝗻𝗶𝗰𝗮𝘁𝗶𝗼𝗻𝘀 Finally, communicating the price is as important, if not more important, than setting the price itself. That's where behavioural economics come into play. By framing your product or service through the right lenses (e.g., bundling, relative to a different category, etc.) you can anchor your pricepoint at a level that doesn't come with sticker shock. And that's where brand-building comes in to make the market less price sensitive. Strong brands have way less price elasticity than commodities - don't underestimate the importance of it in driving profitability in your organization! #marketing #advertising
Absolutely spot on, Pedro Porto Alegre! It's great to see an emphasis on customer research and strategic communication.
Strategic Revenue Leader: Transforming Vision Into Action
4moPedro Porto Alegre can’t wait to talk to you and the team about how we help with the first point you raise here. Pricing research and understanding those parameters is crucial.