What is your price positioning? How can you improve it?
Sellers can remould price positioning with an appropriate pricing strategy, which alters customers’ image of the brand or a particular product.
Maria Jose Guerrero
Price positioning is determined by whether consumers perceive product prices as expensive, neutral, or cheap. This perception is associated with the quality of each brand’s products and services. Competitors’ movements and fluctuations in supply and demand condition this perception. Sellers can remould price positioning with an appropriate pricing strategy, which alters customers’ image of the brand or a particular product. We explain how to change price positioning and why consistent pricing across the brand is important.
Remember that a change in price positioning will also attract a different target market. For example, a price increase linked to higher-quality products will more easily leverage price-sensitive users. Therefore, changes in brand price positioning can affect sales volume, increasing or decreasing it. However, an in-depth understanding of the brand’s price positioning helps to optimise key decision-making to drive business growth.
Strategies to alter your price positioning
To change your price positioning, choosing an effective pricing strategy in line with your needs is crucial. Two pricing strategies are effective in impacting users’ perceptions:
- Penetration pricing: very low prices to attract a new customer segment or to enter a new market. These prices will position the selected products as low-priced and more competitive than those of other companies. The medium- and long-term goal is to gradually increase prices once you have gained the trust of these new consumers.
- Price Skimming or inflated prices: the opposite approach. This strategy is used when launching new products or new editions at higher prices than the competition. This favours premium price positioning and thus strengthens users’ perception of the brand’s quality.
Alongside these two strategies that you can use at specific times or for certain products, you can regularly apply similar prices to competitors to achieve a comparable positioning to other brands. The main advantage is that price will not be the main factor in the final purchase decision, given the similarity in prices. However, you can work on other aspects to encourage engagement, such as user reviews. You still need to know competitors’ prices and maintain a consistent position to avoid damaging the brand image.
Price positioning across all your sales channels
In line with this consistency, maintaining the same price positioning across all brand sales channels, such as vendors or marketplaces, is vital. Setting wildly different prices, whether higher or lower, can impact the brand. Therefore, you should have a recommended pricing policy that binds your sellers to comply with your guidelines when pricing your products or services.
Monitoring sellers is easy with an automated recommended price monitoring tool. This advanced software analyses every distribution channel daily, in any country in the world, in any currency or online store to prevent price wars or channel attacks. It also generates a price history to measure how prices vary over time.
Find out how Minderest can take your business to the next level.
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