How YOU Set The Price, Not Your Competitors or Customers
posted by Stuart Cumming ~ 09/02/14
Category: Business
Too often we've heard the GFC or disruptive technology blamed for discounting and reduced margins, which of course, are contributing factors. But I think there's a much more basic reason. Simply, marketers have been slow to adapt to the new fundamentals.

That marketers are unable to dictate the price at which they want to sell is really a function of not differentiating themselves sufficiently from their competitors.

In short, they have failed to adequately explain why customers should pay extra for their product rather than the competitors.

It's a matter of building a compelling story that customers understand - and respond to by buying your product. And it's not always because of your product delivering a better result; in fact, in the luxury market, it may have nothing at all to do with the practical outcome.

Consider the example of the humble ballpoint pen with hundreds of brands all charging as little as 50c per unit. Now think of Mont Blanc, with its distinctive icon on the end of the pen cap.

That simple icon adds hundreds of dollars of "value" in the mind of the consumer which has nothing to do with what the pen produces. And I've certainly never seen Mont Blanc "On Sale" as such.

What Mont Blanc have been able to do is have their target market understand they are delivering something intrinsically different.

How will you do that for your customer?
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