If Product A & B are identical, what can be a reason that Product A sells 5x more than B successfully? I love button up short sleeve shirts, I usually buy them at $15-$30. I came across one I loved, but it costs a whopping $85...
Many people in consumerist countries buy on emotion. It isn't the same at the lower end of the market, so brands lose out massively in that space, but they aren't really too worried about it given the disposable income available elsewhere.
Branding involves understanding how your 'badge' makes your customers feel. There has to be a congruence between what they see and thus imagine. Oddly, this can also include what they can almost smell and taste! Even though those are not at any point defined in the brand strategy per se.
The first thing is to identify your market segment. In the example you gave, ask yourself what is it you do? How old are you? Do you have children? What sort of job do you do? Are you happy with it? How much do you make? What sort of house do you live in? What other things do you like? etc. etc. etc. these all form what is known as a 'customer persona'. You may even help yourself along by cutting out items from magazines which help visualise answer to those questions or even create and cut out a large cut-out of that archetype.
I do this a lot in different capacities, especially in IT and tech, since that is the market I revolve in most. I can definitely help with the strategy, but I'm going to say something quite odd. If you are thinking to, DO NOT contact me about manifesting it ;) As you can probably tell, there are two parts to this. The first is the strategy which I can do with my eyes closed. The second is the branding exercise, which involves the folk focussed on the emotional aspect of the process, even if they lack the strategic oversight or plan.
If I were you, I'd find someone who has both. The strategic 'cognition' and the emotional/EQ skill. That is the sort of person you need or you can find people that work well together and use them both.
Very best of luck!
Imagine your best friend is arrested for a crime you know they did not commit, if convicted, they would be sent to jail. You need to hire a lawyer. The lawyers have the same level of experience. The only difference is the price. One is $50/hour, and the other is $600/hour. Which one do you choose? Most people would want the $600/hour lawyer because they are perceived to be higher quality and it gives you the piece of mind that you are doing everything for your friend. This mindset is the same when people buy shirts, food, cars, or services. A cheaper cost leads people to assume there is something wrong with the product.
Purchase decisions are made based on presentation and then need. The same products presented in different methods will sell drastically different. Think about this, shirt A & B are identical, Shirt A is presented in a comfortable nice store with a well dressed sales person and Shirt B is neatly folded and layed out in a street vendors trunk. At the same price, shirt A will sell better. The only difference, presentation. This too is the reason a great web store design is needed in the online world.
As a branding consultant, you'd expect me to say that the brand is the answer. Often it is, but not necessarily in the example you gave.
You found a shirt you "loved", and it appealed to you (I suppose) BEFORE you had noticed anything about the brand label. If you found the expensive shirt alongside the less expensive shirts in the same store, then there was no difference in context. So we can't credit the branded environment either.
In your example, product quality itself is what mattered – material, design, etc. Branding might make a difference, but it didn't in this case.
Let's not forget the simplest things. Better products are more desirable and therefore can sell for more. The challenge is to place products in front of people who will not only want them but who are likely to pay the asking price. If you put the shirt back on the rack, then others might be dong likewise; and it isn't clear to me that their higher price point is working.
Branding can make a difference in how people regard a product. But product quality itself has an equal claim.
Ideantical products? That's hard to imagine but, even if the two products respond to the same need, there is definitely a reason why a product sells more than the other one. At the moment of purchasing, the emotional side is definitely a reason, like the customer's mood in that particular moment in time. But answering that these elements make the difference is reductive.
There are a few factors to consider. First of all the life span. How long has each product been around for? If one of them was launched earlier it has a bigger chance to win a larger share of the market. Second, the way those products are advertised; some marketing campaigns definitely add a value to the product's success. The quality of their online presence is determined by Marketing initiatives too and by the time and ideas developed around those initiatives. Furthermore, the opinions of the end users about the quality or effectiveness of the product is a key value to create interest in a product rather than another.
But one thing to definitely consider is the way the products are presented, the feelings created around them, the quality of the communication of its benefits. For instance a product that is presented with a number of good case studies is able to gain more attention and the customers can identify themselves with that particular story.
A number of customers is definitely acting emotionally, but details make the difference. So, if you want to win a client, always try to show that your product is much more than what they think, and make sure you deliver that promise.
Last but not least, if you don't know who you are talking to, it's quite hard to explain your values in the right way. So make sure you understand very well your audience and you talk to them in the right way.
Think of the hotel industry: List price is a key driver of perception. An expensive hotel will attract you because you'll think this is where "good" people go and service must be outstanding. Also, an expensive perfume isa perfume for the stars. That being said, that premium price will convey an explicit or implicit customer promise and that's where you need to be true to it. This does not mean your product or service have to be the same as the all the expensive ones. It means you have to find a "hook", something that will make you different and justify the price: Shopping experience, customer service, unique material etc. can be differentiators. You usually find this through a mix of intuition, direct customer experience, and confirmation through research.
If you're not able to say why your product is not worth an expensive price, it's better to sell it for cheap, but you may be losing a lot :-)
Hope this helps!
I think it really comes down to the consistency of your branding—namely, your visuals. There are more e-commerce websites than there are customers. Use branding as a way to reinforce the quality that your customers are buying into. Achieving visual consistency (product photos, style/editorial shots, banners, logo/identity, etc.) will complement your move to be a premium brand. That's a classic example of how branding can become a powerful tool to achieve your business goals.
When you pay $85 for a shirt, you're buying into a brand.
I believe that if you dream to become a premium brand using bold pricing positioning you have to follow the price positioning strategies. Each strategy has it’s own advantage. Let us look at them one by one.
1. Skim: This strategy clearly positions your company above the rest; it tells consumers something is special about your products. We can smell the fried onions and seared, aged prime meat already. To skim, set your prices higher than the competition does to “skim off” customers who are willing to pay more.
2. Match: This strategy puts your pricing on par with the competition, but not necessarily for all rates. To match, set one rate comparable to your competition and another slightly higher. This allows you to stay competitive for a larger pool of customers yet does not undercut the competition.
3. Surround: This strategy positions your first room type as the cheapest in the market but offers your rooms with better options at a price that’s close to your competitors’ first available rates. Hence, you are “surrounding” the middle market, hoping to capture customers willing to pay in those ranges. For example, look at Sizzler’s $16.99 sirloin steak and lobster special.
4. Undercut: By undercutting your competitors’ rates in some categories, you can potentially attract more customers. Take this example from the hotel industry.
5. Penetrate: Being the low-priced option in your market has benefits and drawbacks. For new establishments, low prices often seem the best way to entice consumers to try their products. Do your prices reflect how consumers value your hotel or restaurant? Here is what consumers see as they peruse online hotel options; those using penetration pricing certainly stand out.
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath