BY SIMONE J. SMITH
Our nation’s retail sector is continuing to rebound from a pandemic socio-financial swatting of historic proportions. Retailers and brands are attempting to restructure and find their new pricing position within a bruised marketplace.
Price positioning: a marketing strategy that involves setting the price for a product, or service in a way that appeals to a specific market segment. The perceived value of the product, or service to the consumer, as well as how it compares to similar offerings from competitors is considered within the strategy.
The strategy’s goal is to provide the best value for the price charged. Depending upon the industry considered, the retailer targets consumers from specific economic and even social levels. For example, if it is a luxury brand, they may use a high price positioning to convey exclusivity and high quality. A budget conscious consumer would be presented by a discount retailer with an acceptable price point, a best deal.
The price must always reflect the perceived value of the product, or service to the forever changing marketplace. Retailers who have been forced to limit their expenses, promotions and expectations by the pandemic are blooming with enthusiasm and hopefulness. Price positioning will attract its targeted market, differentiate its offerings from its competitors, and hopefully drive sales and profitability.
These categories divide the market.
Premium pricing: Highest profit margins present quality products and service
Competitive pricing: Compare pricing with equal quality products
Economy pricing: Price is king; quality is secondary
The consumer’s perception of the product or service value is primary. Product availability and promotional value allow consumers the ability to create a winner within a demanding market. Mass advertisement, limited availability of product and perceived high-end value create a buying spree, while a lack of enthusiasm creates failures.
To date, luxury products and services continue to be extremely profitable. The relationship between price and consumer behavior can place brands products in a maximized state of increased sales and profitability. Of course, our market conditions are crucial influences towards pricing and sales. Product life cycle needs to be considered too. Introducing a product allows for higher prices, while with time passing the prices will decline unless the brand can revitalize the products design, making it more unique than the initial offering. With less promotion, less design and development of the product, and less investment the lifecycle can end quickly.
Price positioning has had an influence upon other sectors, even public election practices. Instead of purchasing a product, the consumer becomes the electorate, and the product becomes a platform and image of a political party or individual.
Today’s environment is quite shaky and socially validated. The wealthy continue to purchase their toys of leisure, while the majority of us ply our financial capabilities, seeking out less costly items of acceptable quality. Attempting to find good quality food at acceptable prices has become a task for many. When price is more important than quality, many sectors of our economy evolve on task, possibly becoming permanent. If the consumer wants cheaper prices, the consumer must get used to offerings that are smaller, weigh less, and look less new. Manufacturers hire less and spend less on improving their products.
You get what you are willing to pay for, or you are what you eat. What are we exactly becoming?
Stay in the loop with exclusive news, stories, and insights—delivered straight to your inbox. No fluff, just real content that matters. Sign up today!
