Should we sell cheap and win over millions of customers or should we sell expensive and create a cult like feeling amongst a privileged few?
Culturally, the word cheap has some connotations if used in a certain context; that is not the case here.
We are presenting a case for every business owner struggling to make a final decision regarding the pricing method of his/her products or services.
This piece will dig deeper as to why this is one of the most debated decisions ever.
Amazon and bic have experienced tremendous levels of success in several ramifications.
For every customer, the idea of cheapness is dependent on several factors; some of which will require behavior modification as income increases or decreases.
Amazon has released some data that implies; the cheaper a book is, the more copies it sells.
Also, the folks at bic biro have managed to only increase price primarily to adjust for inflation.
These has given bic the needed advantage to connect better to an audience looking to just “write” and get it done with. This low pricing or ‘cheap’ approach in this context means they do not have to run expensive ad campaigns to convince more people to justify high end prices
Value is perception.
Some brands, notably in the fashion, and automobile industry have managed to cultivate a deeper sense of connection within their clientele. For some, it is deeper than the functionality and utility power of the product.
Brands like apple, chanel, Ferrari embody the “expensive is better” mentality.
A report at Investopedia articulates that “Consumers wait overnight for new releases and have immense brand loyalty even though MacBooks and iPhones aren’t technologically unique or superior. In fact, Samsung makes phones with better features and Microsoft Corp. (MSFT) and Xiaomi make phones at a much cheaper price point. Nevertheless, Apple seems to break sales records year after year”
Understanding the odds, you are up against, your unique selling point and competitors within the same industry are very important factors when deciding if you should sell cheap or expensive. It’s important to note that cheap doesn’t necessarily mean quick sales will happen and expensive doesn’t also mean a deeper connection to your brand will foster. Identify what your brand stands for and its long term goals before setting a price. ultimately, find the best way for your brand to be recognize and accepted in the market. After all there is market for both; cheap and expensive.