My apologies to all the people that have been trying to access the chart titled ‘different approaches to pricing’ linked from this post. It got lost somehow…it must have been me. Anyway, I’ve recreated it and it can be accessed from the original page: Different approaches to pricing.
This is a positive and bold move from Tesco: they are set to roll out free WiFi across its UK stores, allowing users to compare prices and access Clubcard online while they shop.
Shoppers will be able to compare prices and read product reviews on internet enabled devices, in a bid to drive competitive prices in-store.
Tesco is currently trialing the free WiFi in four UK stores. If successful, the service will roll out across all Tesco supermarkets.
via Tesco to roll out WiFi in UK stores – Marketing news – Marketing magazine.
It is often said that the way to carve a position in a market is to do things differently from your competitors. This means that in a bundled market you unbundle and conversely in an unbundled market you bundle.
The advantages are that direct comparisons on price and service are made difficult and your brand never appears to be one of the pack.
Read this article to see the latest bundling of a product against the market trend: First Choice turns back the clock to become 100% all inclusive | News | Marketing Week.
If:
a) A product brand is what the customer will pay for over and above the commodity price of the ingredients, and
b) A service brand is what the customer pays for over the simple cost of providing the service.
What is a solution brand?
You know, I really don’t like shopping at Asda. But you never know, I could get converted. Recently I have been impressed with a number of their marketing activities:
So well done Asda. From my point of view choice and quality are things I want to hear are progressing and then I’ll be back to have a look.
Ignore sales promotions, put your prices up and most customers probably don’t care…assuming they notice.
The “big four” of supermarkets, Asda, Tesco, Morrisons and Sainsbury’s, have increased the number of £1 promotional price tags 150% over the past year. This compared with a 6% increase in their general promotions, according to a report compiled on behalf of industry magazine the Grocer.
Source: BBC Magazine
The above article is an extract from an article about the rounding up of prices from 99p to £1. Do the maths: what might that equate to in increased annual profits? Simple and effective; this is a great example of pricing being used correctly in the marketing mix.
Cost plus pricing is one of the biggest evils within businesses. It appears the safe approach but fails to maximise opportunity. Also, taking this approach, sale prices tend to erode to the level of cost prices. This is unacceptable for most businesses.
There are in fact many different solutions to determining a price. Some of the ideas are: temporal/time based pricing; multidimensional pricing; risk based pricing; variable pricing. A chart showing these is available for download.
One of the concepts on the chart is the diamond-water paradox:
The diamond-water paradox is the apparent contradiction, or paradox, that although water is on the whole more useful, in terms of survival, than diamonds, diamonds command a higher price in the market.
Can you suggest any more approached to pricing that I can add to the chart?
