Jun 09, 2016 04:50 PM
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Today's consumers want to get the best prices, but offering your brand at a discount can undermine profits and threaten viability. Smart brands utilize strategies to create and sustain a meaningful difference that helps consumers justify spending more. By identifying your audience, understanding your competition, and knowing your brand's meaningful difference, you can ensure that consumers perceive your brand as premium and worth a higher price.
Pressure on pricing is as strong as ever
At the end of The Great Recession in 2011, Nielsen conducted a survey on consumer shopping habits across 51 countries and found that 59 percent of interviewees were reducing household expenses by buying products on sale. Today the proportion of consumers looking for a deal, stocking up, and trading down is as high as ever; there is no going back to pre-recession ways. Be it packaged goods, technology items, or cars, people want the best price they can get.
With the ever-present imperative to grow sales, giving way to consumer and retailer pressure to discount your brand is tempting. However, as outlined in my previous Point of View, "Command A Price Premium For Profitable Growth, " doing so undermines short-term profits and threatens the brand's long-term viability. So how do you widen the user base and grow sales without diluting profit? Smart brands figure out ways to command a price premium.
