âś…Innovate.A new product that better meets consumer needs, even an upgrade of an existing product, can one-up competitors and force them to invest in matching or exceeding the new specifications.
âś…Bundle.Selling a commoditized product with differentiated ancillary services (such as after sales service) can appeal to buyers willing to pay a premium for the convenience.
âś…Segment.Mature markets are large markets that can be divided profitably into multiple segments. Marketers can focus on providing applications expertise for less price-sensitive customer segments for whom the product is still important.
âś… Trim costs and acquire competitors (with profitable customers) to extract maximum scale economies in procurement, manufacturing and distribution.
✅ If you aren’t the low cost producer, complicate your pricing structures so customers can’t easily make side-by-side comparisons, and provide discounts as needed off of artificially inflated published prices.
âś… Use Price Structure to Clarify Your Advantage
Make Price call attention to the value your product or service delivers, and ideally to the one dimension that most meaningfully differentiates it from those of competitors. Goodyear’s problem for a long time was that customers were unwilling to pay a premium for the innovations the company introduced to extend tread life. Goodyear solved that problem by pricing its various models on the basis of how many miles they could be expected to last rather than their engineering complexity; this highlighted the advantage of those innovations for customers and taught them a new way to compare offerings that was perfectly aligned with the company’s value proposition.
âś… Willfully Overprice to Stimulate Curiosity
The implication is that for every purchase decision, there’s a price range above what potential customers say they are willing to pay that will provoke them to ask, “Do I need this benefit or not?” rather than the usual (and damaging) “What is the cheapest option in the store?”
âś… Partition Prices to Highlight Overlooked Benefits
A third thought-provoking strategy—known as price partitioning—is to break a price into its component charges. This highlights dimensions of differentiation that might otherwise go unnoticed. Charge an add on fee for wanted benefits/features.For supplements it could be instead of pricing based on the manufacture cost, price based on each benefit or ingredient and show how the end price was reached.
âś… Equalize Price Points to Crystallize Comsumers Personal Relevance
When Nicholas Hayek brought the Swatch to international markets, in the 1980s, every design had the same price. The plastic watches he created couldn’t be sold more cheaply than those rival products, but with an array of fresh, colorful designs, they offered a new means of cool self-expression. Why was their pricing thought-provoking? Imagine a price-fixated consumer arriving at a watch display. When she encounters a broad assortment of Swatches, all for $40, her price fixation is suppressed by the question “Which of these is right for me?”