Price, Promotions and Positioning…

Recently a number of my clients have asked me about pricing and promotions. In particular one client, who has a “higher end” offering, was using a discounting method that was simply devaluing her brand. Reflecting on this I decided to write a series of 3 blogs focused on pricing, and this is the first… the second will cover the price ladder and the third will consider price elasticity.

Your approach to pricing and promotions should reflect your positioning…

A number of business writers and coaches talk about “arrows up” and “arrows down” in relation to  positioning. If you want a bit more detail or have not come across this before then have a look at this from Shirlaws Online.

In summary, there are 4 arrows which represent 4 key areas of your business proposition. These are market, product, service and price. If your portray your proposition as up market, top end and have a high quality, exclusive product with a price point to match, you will understand the incongruence of a low level of service offered… And the impact that will have on word of mouth, loyalty and trust in your business!

Positioning, in a nutshell, is about aligning all your arrows relative to the whole of the market and making sure that your market is given a product, price and service to match.

So what has that got to do with pricing and promotions?

Everything – as explained above, price is part of the impression you give – not to mention if you present an upmarket, glossy (read expensive) brand and offer a fantastic product and service you MUST have a higher price point in order to cover the costs of the other 3 areas! Don’t forget the very clever strapline used by Stella Artois, “Reassuringly Expensive”, this is so true! People assume if something seems too good to be true then it probably is… I am sure you’ve also heard the statement “It’s too cheap – something must be wrong”. It is. Your arrows aren’t aligned! And just to reiterate what Shirlaws say in their article as above – you don’t have to be a high end business to make a profit, what you need is all your arrows pointing in the same direction. Think “no frills” – Easy Jet has become massively successful with the ultimate arrows down approach!

Bear that in mind when it comes to pricing. You can still offer good, better, best within the assortment you present to the customer. Of course your target customer’s perception of acceptable pricing for good, better & best will be very different if you have down arrows vs. up arrows!

Carry this through with promotions. If you have down arrows you can easily carry off clearance discounts, and the “big red sale” image. If your arrows are all up, as was the case of my client who had used “big red sale” discounting for her end of life products, it simply doesn’t work!

Promotions for “arrows up” brands need to be more creative – still offering good value and an incentive for the customer to purchase, but remaining congruent with the arrows up.

Some ideas include:

  • Don’t slash prices – give customers voucher codes – these can still become viral, but the customer feels that it is a little more exclusive.
  • Package up bundle deals – offer a collection of products typically purchased together for a special price which represents a desirable discount
  • Offer link-save and multi-buys to reduce unit price but without the appearance of item discounting.
  • Simply make specific relevant products “featured” e.g. Product of the month – by highlight an item you may never need to change the price at all and still enjoy uplifted sales!

Pricing, Promotions, Positioning – Summary

To wrap up, make sure you are clear on your positioning and from this you will be able to have far greater confidence in your pricing strategy and approach to promotions.

As a final thought, you might want to have a chuckle at my extract from a visit to BBC Breakfast News in November 2010 when we talked about the different kinds of promotional stategies retailers used to “entice” consumers into their stores in the run up to Christmas! Bill Turnbull really just wanted a simple lower prices for all approach… I don’t think he gets it! Enjoy 🙂

Advertisements

About Clare Bailey

Clare Bailey, The Retail Champion (formerly Clare Rayner), is one of the most well-known and respected retail experts in the UK. With unrivalled knowledge in retail, high streets and consumer matters, she offers unbiased, independent content – whether engaged as a professional speaker, for broadcast media, or for a written feature. Clare is a business woman, entrepreneur and founder of several small businesses. Having been born into a family of successful business owners, it was inevitable that she’d eventually jump off the corporate treadmill and step out on her own! Today her brand portfolio includes The Retail Champion, The Retail Conference, the Future High Street Summit and the Support for Independent Retail campaign. In addition, she is co-founder of Mobaro Retail UK and a non-exec director of Beed Virtual Assistant Services. Having started her career as a fast-track store management trainee for McDonalds, she went on to work with leading retailers such as M&S, Dixons and Argos. She moved swiftly into management roles before being headhunted into senior consulting roles with global software giant SAP, and international management consulting brand, Accenture. Her corporate background in senior retail, consulting and technology roles, coupled with her experience of creating and running her own business, has enabled her to be equally capable whether consulting to global brands or micro businesses. This unique blend has not only positioned her as a leading expert in all things retail, but has enabled her to add meaningful commentary and insight to the debate around the future of the high street, and, how technology is driving fundamental change in the way consumers, and businesses, interact. Clare has become an influential voice in her field, which has resulted in her becoming a regular media contributor and sought-after conference speaker. Often seen on Good Morning Britain, BBC Breakfast, Sky News, and Chanel 5 (to name a few), Clare speaks on a myriad of retail, high street and consumer issues – but is particular adept when it comes to explaining the context behind retail trading results, newly released data, and government stats, in a palatable and informative manner. In addition to broadcast and conference speaking, Clare is the proud author of two best-selling business books published by Kogan Page - The Retail Champion: 10 Steps to Retail Success, published July 2012 and How to Sell to Retail: The Secrets of Getting Your Product to Market, published February 2013. She has provided contributions to various academic texts, including Retail Marketing Management (published by Pearson). With an engaging, conversational yet informative style, Clare writes for press and content agencies, providing features, articles, blogs and opinion pieces as well as contributions to white papers and reports. However, when the situation demands a more serious style, Clare can deliver - In 2016 she wrote an extensive report for a major insurance and risk law firm, as a retail expert witness, to support a public liability suit. She found that project particularly enjoyable as it played well to her strengths – assimilating large amounts of data and information, identifying the key points and articulating that in an understandable manner. When not on TV or speaking at conferences, Clare’s “day job” sees her supporting consumer-facing businesses through her consultancy services. When asked to describe what she most loves about retail consulting it is typically the opportunity to “dig deep”, getting “under the bonnet”, in order to leverage the business data to uncover the insights that lead to “lightbulb moments”. She also loves working on business change programmes that centre on improving the processes and systems to increase profitability by supporting more rapid, better informed decision making, improving the customer experience, or simply by become more efficient and streamlined. In this respect she considers herself a “business engineer” with a brain that works like a relational database! Due to her years of experience, her logical, objective approach, her quick, rational thinking, she is known for being able to cut through complexity, seeing right through to the crux of issues, finding creative solutions that others may have overlooked. As if all that wasn’t enough, Clare is a working mum, juggling a home life in rural Lincolnshire with her partner, their 5 kids, 4 cats, and geriatric Labrador! For all enquiries, contact Clare directly on 01727 238890 or email champion@retailchampion.co.uk.
This entry was posted in Pricing and Promotions, Retail Strategy and tagged , , , , , . Bookmark the permalink.

8 Responses to Price, Promotions and Positioning…

  1. Pingback: Why your retail business needs a price ladder… | Clare Rayner: The Retail Champion

  2. Pingback: The benefit of understanding price elasticity… | Clare Rayner: The Retail Champion

  3. Pingback: Trade Show Season: How to select the right products for your retail range. | Clare Rayner: The Retail Champion

  4. Pingback: You don’t just want footfall, you want the RIGHT kind of footfall | Clare Rayner: The Retail Champion

  5. Pingback: The ultimate guide to setting price and position for greater profit by The Retail Champion | Retail Computer Solutions Blog

  6. Pingback: Price and positioning for greater profit | The Ultimate Guide

  7. Pingback: Do you know your competition ? #marketresearch | Beed Virtual Assistants

  8. Pingback: Know your competition! #marketresearch | Beed Virtual Assistants

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s