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23 September 2022
Price is an essential element of a brand’s communication
Research indicates that consumers place far more emphasis on price as an influence on their perception of a brand than executives believe – part of a set of findings that suggest pricing should be part of the brief for the department that owns the customer relationship: marketing.
Why it matters
Prices are going up across the board, and to maintain any margin, consumer prices are rising too – this is a communications challenge, given the significance that buyers place on price, and should drive a re-think of marketing’s influence over pricing.
What’s going on
This is the conclusion of an article on pricing strategy in the Harvard Business Review, in which marketing professors and researchers from the universities of Ramon Llull (Barcelona), Munich, and Massachusetts, explain how price is far more than the result of a numerical calculation, but a signal of the business’s intentions, and look to theories in the field of linguistics for ways to approach it.
They make three recommendations:
Prices reflect values. Certain brands have made good, fair prices a core value. Sometimes, this can be a case of showing slightly higher prices so long as there are no nasty surprises later in the interaction.
Explain the price. Break down the costs or explain the rationale behind an eventual price, with transparency on internal costs like rent or wages humanising the eventual figure.