Hello again, I’m Jim Glover, That Branding Guy, for Once a Day Marketing, where business takes shape.
Welcome back, glad you could join us today and hopefully you are finding us all over the internet. We’re trying to do that, but I’d love for you to find us on Facebook.com/OnceADayMarketing. We’d love for you to go there, like us as a Friend and a Fan and then share with your friends on Facebook as well, especially if you have peers out there who might need a little marketing nudge.
Today’s topic continues in our series on the 7Ps of Marketing is the “7Ps of Marketing: Price.”
I’ve talked about the 7Ps of Marketing. It’s interesting that “price” is the only one that drives revenue. All the other Ps are positioning you to be able to generate revenue but they’re all costs. So you can see that pricing is a very important factor for your business.
It’s important to remember that pricing is related to supply and demand. If there are a lot of widgets out there it’s harder to have a higher price. If your product is a little bit more scarce and in demand then you can raise the price and so usually what happens, if you remember your economics, is there’s an equilibrium point between supply and demand. You can control that intersection a little bit through your pricing strategy. But it’s also important to know that it’s not all about price.
There is something called commodity, I’ve mentioned it before. Certain products only compete on price and if you only are competing on price, what’s your competition going to do? They’re going to undercut you and you’re going to undercut them and so it’s a downward spiraling sort of strategy that doesn’t benefit anybody. But if there is no perceived value by your customers, then price is about the only thing you can compete on.
But what you want to try to do is create value. You want to differentiate yourself from the marketplace. You want your customers to value what they are getting. You want them to feel good about your product. And the more that you can do that, enhancing that brand, and that’s why we talk about that so much, then they’re not so particular about the price because they’re getting something more out of your product or service, they’re getting a benefit and satisfaction. And that’s what you’re trying to do with respect to brand building and relating that to your price.
Now what factors do you have to keep in mind when you’re pricing? Well, the first is your competition. Unless you’re a monopoly and the only game in town you have to keep in mind what your competition is doing with respect to their pricing. You might be a lower price, you might be the same price, you might be the higher price but you can’t price in a vacuum. It’s very important to know what your completion is doing out there. Next thing are goals and objectives of your company. What are you trying to accomplish? Are you trying to take time to build a market like I am, for instance, with Once a Day Marketing? Or are you trying to just penetrate the market overnight? Each requires different pricing strategies.
Also, how unique is your product in the marketplace and where in the marketplace is it? If it’s very unique you have the opportunity to price more. If it isn’t then you are going to have to price less. Again, we talked about being a commodity, you don’t want to be a commodity, you don’t want to be only pushing your product on price. That’s a bad competitive place to be.
And then finally who are your targets and their willingness to pay? If you build a multi-million dollar condominium in a low rent neighborhood, chances are it’s going to be hard to find a customer that’s going to be willing to pay the price that you want. Again the willingness of your customers to pay and also who they are is a big part of pricing strategy.
On our Strategic Tuesdays we’ll be talking a lot more about specific pricing strategies whether you’re penetrating, or skimming or option pricing. There are all sorts of things you can do with respect to your goals and targets and we’ll be talking about that in the future.
But the main thing you want to try to do and it’s just part of everything we do here at Once a Day Marketing is to build up the brand and build up that familiarity and the reward and the expectations that your customers have with your product. If you do so then pricing is less important. And again, as we said, you don’t want to be competing only on price.
So what is my pricing strategy you might ask for Once a Day Marketing? Well, I’m a young brand, a young product in the marketplace so I decided that I would provide value to my customers, you watching or reading this blog, by providing at this moment a free video blog. So, I’m able to penetrate the market a little bit faster because there’s no risk to you to watch my video, there’s no cost to you. And hopefully as you begin to trust my brand and become more loyal to my brand I have opportunities in the future to do monetize my brand and that’s my goal.
I want to thank you for tuning in today. If you can, stop by tomorrow for Strategic Tuesday. I’m Jim Glover, That Branding Guy, for Once a Day Marketing and we will see you next time.
James Glover: (505) 501-1330 or firstname.lastname@example.org