Before You Continue: The Union that Fuels Our Capabilities
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It can be difficult to stand out in the market today. It can be even more difficult to determine the appropriate price point for your product or service.
When your target audience is trying to make a purchasing decision, the price of a product or service alone can sway what they think about your brand when they see it on the shelf or a search result.
On the other hand, the way that your established target audience feels about your brand (Google reviews, word-of-mouth, testimonials) can influence the value that a prospect associates with your product.
We want to help you understand the relationship between these two truths to help you optimize your marketing strategy for the best results.
Keep reading to learn 3 ways that brand strategy influences pricing strategy!
What do customers think of your brand? Are they just paying for a product or service? Are they paying for an experience? Or the feeling they get from using your product?
Your audience’s perception of your brand determines and reinforces its value to them. When comparing your product to a competitors’, your audience is ultimately choosing to pay for the engagement that comes along with what they purchased.
Or to put it simply: they’re buying the product they think is going to make them feel better about themselves or their situation.
For example, you don’t buy ivory soap because you really want the bar of soap. You buy the soap because you want to feel clean and all the feelings and emotions that come along with that.
→ TO SEE THE IMPACT OF BRAND PERCEPTION AND HOW IT CAN DRIVE SALES, CHECK OUT THIS FORBES ARTICLE ABOUT NIKE’S SUCCESS WITH ATHLETIC WEAR COMPARED TO OTHER BRANDS.
Whatever benefits your customer believes they are gaining from purchasing your product, the price should reflect that value.
People will make purchasing decisions based on the brands they have an established connection with.
Imagine you’re interested in buying a toaster. The store has 5 different toasters in stock, but you only recognize 2 of the brands. In most cases, this is no longer a process of elimination across 5 toasters, but instead a choice between the 2 toasters, because these are the brands that you recognize.
Strong brand recognition significantly helps your product stand out. For example, you know a Coke when you see it. You know a Nike symbol when you see it. When you’re in the frozen pizza aisle and you’re in a hurry to get in and out of the store, what pizza are you going to grab?
Our brains store memorable brands as trusted sources in our minds and help us make the decision-making process easier.
Without good brand equity, you will be stuck trying to market your product based on competitive pricing alone, and that’s a tough battle to fight.
Another great example of strong brand recognition can be found in Apple. Their brand is so powerful, in fact, that you would be hard-pressed to find more than one or two other tech brands that are quite as ubiquitously purchased and used.
POSITIVE BRAND ASSOCIATION
If you have strong brand equity, you can use it to leverage your pricing strategy.
If your audience associates your brand with benefits such as exceptional quality and devotion to customer service, then they will be willing to pay a premium price for your product.
There are many examples of companies who do this, but we suggest looking at brands such as Adobe and Microsoft 365. Their products are considered the “standard” in their industries, and they are therefore able to set higher price points to reflect the value that they provide.
Make note: your customers must be aware of the benefits and value of your product/service before it’s time to buy.
Most customers, without brand association, will operate solely under competitive pricing and will seek to make the least expensive purchase to fill their needs.
Here at Deksia, we understand the importance of your brand and how it’s perceived, and we’re always looking for ways to optimize its position in the market. Building memorable brands is our specialty.
We work with clients to learn the intimate details of their brand and use those details to craft impactful marketing strategies — which will ultimately help them to maximize their return of interest.
TO LEARN MORE ABOUT HOW WE CAN HELP YOU GROW YOUR BUSINESS, CONTACT US.