The Pricing Strategy Assessment℠Lowest Price Branding: We’ll Make It Up with Volume!
The Wall Street Journal’s
October 7, 2010 "Business Section" reported, “The only thing missing from the U.S. economy today is demand, and the answer is for the government to supply it.” Regardless of your political persuasion, these stressful economic times place enormous pressure on printers, packagers and communicators to adopt strategies that will build back their sales.
Pricing strategies can have a dynamic impact on profits, so they should be considered as carefully as all other branding and marketing strategies. After all, over time a 10% reduction in profits can significantly impact what brand marketing your company can and cannot afford to invest in.Price branding has a place in a branding program.
Let’s look at two different printers that used two very different price strategies.Printer #1:
This printing company decides to feature one of its pressroom capabilities. A branding campaign is prepared to run as a special 90-day promotion that offers reduced pricing to customers who send projects that fit its equipment parameters. The company promises at the end of the promotion to promote heavily the best print samples using direct mailings and a special Website that highlights the creative printing that was produced. Printer #2:
The other printing company decided to build new sales in the next 90 days using outbound telephone calls by its sales representatives and allowing them to lower pricing, when necessary, to win new business. This decision was based on motivating the sales representatives to make more calls to everyone they knew and to be aggressive in getting new orders. New orders were brought in, including some from existing customers that were glad to get a better than average price for their everyday printing, but then the push ended and so did further orders. This left the firm in the same place it was in when it started.
Of these two printers, which do you think benefited more from its 90-day price branding? Was one approach superior to the other? Printer #1
positioned how it wanted to be perceived by its target audience. Price was a factor, but not the primary factor, so its brand value was maintained and the company achieved new sales. Because the specifics had been worked out in the beginning, the promotion attracted high-quality projects and that led to high-quality work. This provided the printer with additional opportunities to promote its services using actual recent work—and that led to even more work!Printer #2
, on the other hand, created panic inside the company and among its clients. The company painted a picture of a print shop that desperately needed more printing and devalued its brand in the process.
The bottom line is your price is a major way your customers place a value on your company. If you use price as a brand strategy, you risk lowering your brand’s value among your prospects and your customers—and that is a problem. There is a joke that goes, "What we lose on individual projects, we’ll make up in volume!" Unfortunately, that never works. Tom Wants to Hear Your Branding Issues:If you are a printing company, or product/services company serving the industry, and would like to be considered for a feature in this blog, please contact Tom Marin for an interview.
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