How to Raise Price

June 25, 2012
Marketers are taught early on in their education that price should not be used as product differentiation. If a product is positioned correctly to the right audience, price (in an ideal world) will not be a factor in the purchase decision making process. While that concept sounds great in most Marketing textbooks, it largely ignores reality (and basic Economics). Consumers and businesses do have budgets and finite resources, and at some point reach a limit on what they can purchase.

Yet another, sometimes unaccounted for, reality is that customers are sensitive to price increases. Often times, companies who look to raise the price of their products put themselves at the unnecessary risk of losing long-term cash flow from their current customers (the ones that are generally the most profitable to maintain).

This Dilbert comic strip illustrates how some companies treat their customers when it comes to price:





In response to this comic strip, below are a few tips I have picked up on over the years for companies (in markets where customers have different solutions at different price points to choose from) looking to raise prices for existing customers:
  • Bring a unique product or service to customers that truly stands a chance at keeping a conversation focused on the advantages and benefits of that product or service...not on price. Customers will pay more for a product or service if they see the benefits of it when compared with the previous product or service
  • Understand (and acknowledge if necessary) that customers do not have bottomless wallets: their resources (like yours) are finite. The trick with pricing is to understand current customers' individual economies and position the product or service as an opportunity that is well worth the price for their business or personal needs. Even after making such an effort, be prepared to lose long-time customers who don't have the ability to pay an increased price (even for a better product or service) if you are unable (or unwilling) to provide a discount
  • When introducing a higher priced product, allow customers the option of purchasing the lower priced product for at least a temporary period. While their may be greener pastures with a higher priced product that appeals to different customers, it will take a good amount of time to find those customers and establish your brand within that market. Why not keep money pouring into the coffers in the meantime?




 

Is Your Business Branded Internet Friendly?

June 3, 2012
Companies can brand themselves in many different regards. The proliferation of smart phones and tablet computers amongst consumers, combined with the increasing importance of staying "connected" while on on-the-go, makes it paramount for businesses to ensure customers associate Internet connectivity (at no charge) with their locations. Two industries the concept of being "Internet friendly" plays especially well for are hotels and restaurants.   

I've stayed in four different hotels so far thi...
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Branding and Strategy

May 7, 2012
A recent interview by Adage of Bud Light brand Vice President Mike Sundet revealed what Bud Light Marketing folks think they did wrong when it came to their Golden Wheat beer (a product they have since stopped producing).

Ad Age: Bud Light is your biggest and most important brand. How do you make sure you don't overextend it with new versions?

Mr. Sundet: The key is to make sure that it all ties back into the essence of what Bud Light is all about. Bud Light is a fun, social, spontaneous br...


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What Are They Selling?

May 1, 2012
Many people have seen the New Era commercial where Alec Baldwin "relieves" himself while watching a Yankees-Red Sox game:



But did you know there was a series of these commercials created? Below is another in the series I hadn't seen yet:



These commercials are another example of an attention grabbing way to bring attention to a brand or product (in this case a hat company). The off-brand humor appeals to the target market (young males), and the celebrities do a terrific job of showing passion to...
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The Value of Viral

April 21, 2012
Self-correcting products (products you use to "white-out" mistakes on paper) are pretty boring. One way to promote that type of product, especially with a low Marketing budget that doesn't make television or print ads possible (which I presume is the case for this type of company) is with a viral, social media focused campaign.

Tipp-Ex has taken this concept further by creating a series of viral campaigns focused on a "hunter vs. bear" concept.

Here are two below:






While the campaigns do nothing ...
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