Brand No. 1: Vacancy Competition Series 009

In the fierce battlefield of commercial competition, how can brands win the market through precise positioning and pricing strategies? The article points out that pricing is not just a numbers game, but also a reflection of brand positioning and market competitiveness. By analyzing how different brands shape their market position through pricing strategies, this article reveals the complex logic and consumer psychology behind prices.

Pricing

Pricing is not a simple number. Pricing is first and foremost about positioning. Only with that positioning can there be a support point for the price.

Who are you serving? Who are you showing your products to? Who are you selling to? Before buying, consumers have a budget in mind. This budget is your lock on the market and customers.

1. A misunderstanding: cost pricing

If you produce an electric kettle, would you describe it as an electric kettle or an electric tea kettle? Of course, the functions of the products are the same, boiling water. However, the markets and channels of electric kettles and electric tea kettles are completely different, and consumers' value perception points are also different, so consumers' price acceptance of electric kettles and electric tea kettles is also completely different. Is it an electric kettle or an electric tea kettle? This definition can differ by 10 times or even more than 10 times due to differences in categories, scenarios, and value perception. The price of the product comes from the value recognition brought by the category and scenario, and the brand, channel, and promotion are the channels for conveying cognition.

The logic of pricing is not just about cost;

It depends more on how the company defines and delivers product value;

First-class entrepreneurs know how to set prices. Pricing is a thorough expression of an entrepreneur's commercial penetration and a judgment of market trends. For consumers, whether it is 19.8 yuan or 39 yuan, it is ultimately a reason for purchase. And this reason for purchase comes from the understanding of space competition from beginning to end.

To deeply understand pricing, let’s first look at a math problem: If, keeping sales volume and costs unchanged, a company can increase its product prices by an average of 2%, what does this mean to a company?

Amazon's corporate profits will grow 276.2%

Honda Motor could boost profits by 65.2%

HP's profit can be increased by 37.9%

In the 4Ps of marketing, products can be discussed in terms of packaging and visual appeal; channels can be discussed in terms of models and mass penetration; promotion can be discussed in terms of content and seeding. However, when it comes to price, there seems to be nothing to talk about. Often, the more obvious something is, the more it is ignored.

Genuine goods and reasonable prices, good quality and low prices, good products but not cheap, cost-effectiveness, behind these familiar words are all talking about prices. An entrepreneur's top ability is pricing; first-class companies know how to set prices, second-class companies do promotions, and third-class companies do Pinduoduo.

2. Price is potential energy

You can set a price according to the position you occupy. If you are not in that position, you cannot set a price. It is not that you cannot set a price, but that consumers do not accept or approve of it because you do not have the potential energy. Price is potential energy. A good fighter seeks it from the potential energy, not from others. Therefore, he can blame others and take advantage of the potential energy.

The iPhone can be priced high as a matter of course;

After several generations of efforts in the Mate series, Huawei's extraordinary masters have secured high prices;

Xiaomi is still working hard to move towards a higher price point;

The first generation of Tesla must be priced high. The $100,000 Roadster represents not only Tesla but the future of electric vehicles. If the first generation of Tesla was priced at the same price as ordinary fuel vehicles, Tesla would not be the Tesla of today! Musk is very clear about this - first-class entrepreneurs know how to set prices.

After the accumulation of high-priced potential energy of Model S and Model X, the potential energy released later was different. The advent of Model 3 penetrated into the mid-range electric vehicle field with a price of $40,000. The strong brand, popular high-tech and attractive price quickly attracted a large number of buyers from the market share of traditional car brands of the same level.

3. Cognition and Price: Scenario and Anchoring

In fact, compared with the cost, consumers are more concerned about the benefits of purchasing products. This includes: use value, functional value, image value, and social value. The logic of pricing is never just about cost, but about creating advantage recognition and price anchoring. You think no one will buy the Mercedes-Benz that replaces aluminum with steel, but the reality is just the opposite. It sells well. This is because consumers are concerned about image value and social value.

Price anchoring: standing next to the expensive and anchoring the present with the past

What kind of product you want to be, you have to stand beside it. So, Xiaomi SU7 has to imitate Porsche; when inviting people to dinner, the white wine is Maotai, what kind of red wine is suitable? Not expensive and face-saving, Penfolds 407 is tied to Maotai Feitian, and the price suddenly becomes reasonable.

In the absence of more information, past prices (or other comparable prices) may be an important determinant of current prices, by anchoring past prices to determine current prices.

Down jackets that originally cost 499 yuan can now be bought for only 199 yuan. With this as a reference, consumers will be more likely to accept the price of 199 yuan. Here, 499 yuan is the anchor point. Films cost hundreds of yuan, and membership services cost thousands of yuan. If you just bought an iPhone for 8699 yuan, you may feel that it is acceptable.

Add one more sentence: If you don’t buy Apple Care service, the cost of repairing the screen is 2600+, and the cost of replacing the whole machine is 4600+, and you will be captured instantly. 8699 is the price anchor point, and the intimidation of not buying is loss aversion.

In addition, we need to look at pricing from a higher industry perspective. Pricing is not just a matter for one company, it even determines the industry ecosystem. Ren Zhengfei said in an interview that Apple is great, and its high pricing leaves opportunities for other brands. Otherwise, once Apple phones are reduced in price, other brands will not be able to compete. Only by understanding pricing from the perspective of the industry can we stand on top of the world and see the small mountains below.

15 Pricing Tips

(1) The numbers on the left affect price perception

(２) Smaller fonts are cheaper

(３) Remove the thousands separator to make the price look lower

(4) Place text around the price number and choose a description that is less expressive or smaller in magnitude

(5) Break down pricing into its components

(6) Consumers are willing to pay more when prices are more accurate

(7) Put the low-priced items on the left and the high-priced items on the right

(8) Showing consumers two approximate values ​​of the price

(9) Emotional elimination; rational addition

(10) The order in which products/prices appear determines the criteria for subjects to make purchasing decisions

(11) Anchor Price/Reference Price

(12) Place the price to the right of the larger quantity

(13) Small characters are placed next to large characters

(14) Follow the “100 Principle”

(15) A discount of more than 30% must have a reason for the discount