Price Communicates

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As a marketing communications specialist, I’ve been most closely involved with the Marketing P for Promotion throughout my career. However, there is another P that communicates with consumers, perhaps more potently and certainly more quickly—Price.

P for Price is not merely a matter of numbers. It is not an accounting function that totals the cost of inputs and adds a margin. Price communicates. It has a psychological effect to convey value and help establish an offering’s positioning, a comparison with alternatives to claim a place (hopefully positive) in the consumer’s mind.

Pricing strategies are designed to prompt a consumer’s purchasing decision. Traditional approaches include:

  • Price skimming: introducing a product at a higher price to capture those customers who will pay a premium price.
  • Penetration pricing: introducing a product at a lower price to capture market share.
  • Status-quo pricing: deliberately matching competitors’ pricing.
  • Price lining: creating a good/better/best among one’s offerings, with reflective pricing.
  • Bundling: offering a lower overall price for a group of offerings than what they would cost if purchased separately.

Note what is communicated with each strategy. Price skimming says “new and superior,” frequently seen with Apple’s product launches. Status quo says “equivalent,” which can be a powerful statement for a small entrant going against market leaders. Price lining says “sufficient” when consumers select a “good” offering, knowing what they are giving up by not going with a higher priced offering. Bundling says “bargain” as it illustrates savings when making a larger total purchase.

The ultimate margin that matters in pricing is not the marketer’s profit but the consumer’s perceived value. Did the consumer’s benefit exceed the offering’s cost? Benefit can be the direct performance of the offering along with the qualities of the enhanced offering, often represented through intangibles—prestige, convenience, joy associated with the product’s usage (e.g., the social aspects of attending a sports event). Going beyond emotions (as important as they are in marketing), note in this study for Harvard Business Review the very tangible benefits that business consumers may want to derive from their purchases as they seek to deliver value to their own customers.

So, should Christian marketers always aspire to present offerings at the lowest possible prices? No. A price that is too low may conceal the inherent quality of an offering, actually dissuading potential buyers. A price that is too low may deprive marketers of a justified profit from providing superior value in one or more of the ways described above. Price communicates. Communicate accurately and positively.

Leviticus 19:35-36 ESV
[35] “You shall do no wrong in judgment, in measures of length or weight or quantity. [36] You shall have just balances, just weights, a just ephah, and a just hin: I am the LORD your God, who brought you out of the land of Egypt.

How can Christian marketers measure the value an offering provides when benefits may be personal and intangible?

Is it just for Christian marketers to seek market share from competitors with penetration pricing?

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