The pillars of a localized pricing strategy

05/02/2018

Angela de la Vieja

A price internationalization strategy is the way to define the prices of products and services for each market in which you wish to operate. This is not a novelty in electronic commerce, a sector in which it operates beyond geographical borders. However, the way to define prices to reach the whole world has two very different states. A first more superficial state, in which prices are adapted, and a second state with really localized prices for each market.

The first state of adapted prices is usually the first phase and is actually a 'translation' of the price strategy. It is based on adapting the visible parameters of the strategy: prices, currency and language.

The first thing an online store does in this regard is:

· Establish an exchange rate system to convert the price to the equivalent in local currency and thus present the price in the currency of use of regular customers.

· Translate the complete ecommerce site, so that potential customers can understand in detail from the product catalogue to the ecommerce operation.

These tasks do not really form a location strategy. They are the starting point to have a localized offer and so potential customers can understand in detail all the operation of electronic commerce. A true localization strategy must investigate the interests of potential customers and the situation of each local market to establish its strategy.

1.- The interests of potential clients

The interests and needs of consumers can vary greatly depending on the market, from the perception of the value of the entire offer to the details of the product characteristics.

The fashion giant Zara analyses the behaviour of its consumers both online and off line and the conclusions in terms of product interests are that they are very similar in all markets. The main variation between markets is climate. That is to say that in winter in the northern hemisphere, the fashion interests of Poland or the United Kingdom are similar, which allows them to offer practically the same the products.

However, the perception of fashion and the perception of the brand in each market (among other variables) means that the prices of the product are not the same in each market.

A very valuable technique to understand the interests of potential customers in each market is that of the buyer person. This technique goes far beyond a simple segmentation and, through the use of tools such as empathy maps, proposes to inquire about the perception of the consumer considering four dimensions: what he feels or thinks, what he sees, what he hears and what it says.

A good example of how to use this technique is Stella MacCartney, who used empathy maps to boost their internationalization strategy.

2.- The competitive situation in each market

The way of functioning of each market obviously influences the pricing strategy. The presence of local players can be decisive for the definition of prices and even for the entire market strategy.

Another Inditex brand, Pull & Bear, sells part of its catalogue through Asos in the United Kingdom. Companies with digital products, such as Netflix, Dropbox, Evernote or Spotify, have a price model for practically every country in which they operate (especially in Asia, where the competitive situation differs substantially by location).

One of the keys to understanding this competitive situation is to monitor the competition using price intelligence technologies. The monitoring tools allow you to track the prices of the competition, to analyze their movements, draw conclusions about their strategies and make decisions.

This type of price analysis is a permanent practice to understand market price movements, rather than an initial analysis. All the participants are incorporating products into their catalogue and improving their offer, so, beyond technology, the monitoring of prices of the competition is a way of understanding the dynamics of each market to define the correct pricing strategy in each moment.

11/11/2022

Consumer behavior: How can behavior tracking be effective for setting the right pricing strategies?

Behavior tracking is becoming massively popular today. As a result, pricing strategies born from studying consumer behavior are a merchant's dream come true. If done right, it can conquer every market for the business quickly. With abundant data available, the strategic makeover of the pricing models is becoming easy for companies.

What is behavioral tracking, and how is the data beneficial in pricing?

For a quick understanding, behavioral tracking refers to gaining in-depth knowledge and insights into consumers through their web data. Their browsing habits, spontaneous decisions, shopping interests, and preferences come under behavioral tracking.

How can enterprises use customer behavior data?

Companies can use customer behavior data as a tool to strengthen their hold on the market. A customer’s preferences, values, and tendencies allow businesses to work in sync with them through the collected data. Apart from this, customer behavior can also aid in:

Tailoring customer needs for customer retention

Personalization is becoming the heart of a company’s growth. No matter in which area an enterprise is functioning, tailoring the services, products, and solutions is becoming increasingly crucial. Uniqueness and personalization attract the crowd like no other.

Increasing the overall value

One of the best ways customer behavior data affects a business is by upgrading the value of customers for the business. The customer’s characteristics allow the company to target the people that match the business prospects well.

Optimizing every type of content

Everything that is up for digital display requires content. You must have seen companies unveiling their products or services through advertisements and making the initial public appearance. Two essential sales strategies – upselling and cross-selling comes through content optimization.

Pricing Strategy

Last but certainly not least is the influence of customer behavior data on the pricing strategy. The pricing strategy essentially constitutes content derived from data analysis. Companies need to have a dynamic approach to the pricing system to attract the right customers.

17/02/2015

Saint Valentine’s Day, always a good opportunity

V-Day is looming, a long-awaited date for all and also a good occasion for the eCommerce. According the study conducted by Prosper Insights and Analytics, it is forecasted the average consumer expense that day will be the highest in last years. Furthermore, 25% of them will buy online, which means an increase of 4% regarding 2014 (The US department of Commerce). This is, therefore, a key date where market competitiveness increase and which could be assumed as a big opportunity for our business or, a big fail if we do not adopt the correct strategies.

How to turn this event into an opportunity? To achieve this goal, we need to adapt our prices to this hostile environment, i.e. we need to develop an appropriate Dynamic Pricing strategy that allows us to adapt our prices to the variations produced in supply and demand and to position us ahead of our competitors. In V-Day, the frequency in changes will be higher, carrying it out each hour or even each minute. It is estimated that 65% of leader retailers have the ability to respond quickly at these variations, such Amazon. For this reason, it acquires great importance the correct use of a software specialised in price motorisation of competitors. Do not miss the time and adapt your business to new adversities.

28/12/2022

Which are the best footwear marketplaces to sell on?

Footwear marketplaces are booming. The last decade has seen the launch of new specialized marketplaces with millions of different users. Among them are Spartoo, Sarenza and Farfetch, portals with international reach. Their main value is that they unite hundreds of footwear brands, as well as offering clothes and accessories. Although each has its own characteristics, they are all vertical marketplaces, i.e., they focus on a specific area, and their sales categories are interrelated. For sellers, these portals provide an opportunity to expand sales channels and drive the globalization of their e-commerce business. We explain how to sell on these footwear marketplaces so that you can assess whether they align with your plans for the future and then start defining a possible pricing strategy.