Monday, December 16, 2013

Sharpen Your Price Image

When Ford Motor Co. redesigned the Mustang to appeal to car shoppers worldwide, Jim Farley, Ford’s head of global marketing, said, “Launching Mustang globally is not about the people who buy it. It’s about the people who don’t…. The good feelings will make them more inclined to buy Fiestas and F-150s.” What Ford plans to sell internationally is not so much Mustangs as the Mustang image.
     Skilled retailers take a similar perspective when selling price image rather than price points. “Price image” is the general belief your target markets hold about the level of prices your store charges compared to what other stores charge for similar items. Some stores have a set of product line price images. “They’re high if you’re looking for meat or fish, but I find unusual bargains in the bakery in the early afternoon.”
     Some consumers seek the exclusivity of stores with an image of charging premium prices. But in general, consumers shop more often, buy a larger range of items, and buy larger quantities of each item at retailers with lower price images.
     In an extraordinarily through review of the consumer behavior research literature, marketing professors at Emory University and Northwestern University catalog the considerations which determine price image other than the actual prices on items. Here’s my version of that list:
  • Range of prices. The frequency with which the shopper sees low prices influences price image more than does the amounts by which prices are lower. Many consumers look at only three to five items before settling on a price image assessment. Retailers can take advantage of this fact by offering low prices on Known Value Items—the most popular categories, brands and/or package sizes. Some retailers call these “signpost items” 
  • Price-match guarantees. These cause an image of lower prices, even though few customers ever make use of the guarantees. 
  • Claims about price image. These claims could be in advertising or word-of-mouth. WOM claims by friends, family, and acknowledged experts do have greater influence than advertising. Still, don’t count out the power of repeated ad impressions. 
  • Store location and décor. Many consumers are happy to pay somewhat higher prices to guarantee a pleasant physical environment. 
  • Customer service quality. This includes factors such as the degree of promptness, courtesy, and accuracy in receiving assistance with purchases. Customers like service. Yet there’s a point at which customer service is so high as to lead shoppers to question the value they’d get from buying the merchandise. 
For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more: 
Guarantee with Care 
Accelerate Purchases with WOM 
Perpetuate Beautiful Days in Your Neighborhood 
Design Stores with Visual Aesthetics 
Meter Your Customer Service

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