Pricing Speaks Volumes... What Is Yours Saying About Your Brand?

There's an old but still very relevant adage in marketing:

"Perception is reality."

This philosophy works something like this…you can make the best products around and even offer impeccable service, but if your brand is perceived as inferior in some way — even erroneously so — the market will often adopt it as reality. Then you have a branding problem.

The Power of Branding

Branding plays a pivotal role in creating and managing perception. Certainly, a brand is not merely a logo or a catchy tagline; it represents the overall image, values, and promises that a company conveys to its target audience. It's what the marketplace thinks of or feels when simply hearing your brand name or seeing your brand mark. As such, effective branding captures the desired perception and cultivates a positive association with your brand.

Consider renowned brands like Coca-Cola, Apple, or Nike. They have successfully crafted strong brand images that evoke emotions and resonate positively with consumers, thereby influencing their perception of quality, reliability, and desirability.

Perception vs. Reality

This is not to say that your quality, service, or meeting your customers' other important needs are irrelevant. Quite the contrary. If you have real problems with your products/services, then you are only fueling poor perceptions. That said, while reality might be objective, people's perceptions are often subjective and shapable.

In marketing, it is vital to understand that consumers' decisions are based on their perceptions rather than an absolute reality. Consumers rely on their perceptions to evaluate a product's value, benefits, and overall appeal. If a brand can shape a positive perception, it can help overcome potential shortcomings and even outperform competitors.

Managing Perception

To harness the power of perception in marketing, it is crucial for brands to manage and align their messaging, actions, and experiences with the desired perception. Consistency across all touchpoints, including product development, pricing, promotions, and customer service, is vital in reinforcing a brand's desired perception. Additionally, actively listening to customers, addressing concerns, and continuously improving products and services can help bridge the gap between perception and reality.

Complicating matters even further, brand perception is influenced by a variety of factors that shape how consumers perceive and interpret your brand. Such important factors include brand identity, messaging, quality, customer experience, reputation, societal views, brand association, competitor comparisons, visual and sensory elements, digital presence, and social media influence.

But wait, there's still more...

Pricing's Impact on Perception

Pricing is another key element to your brand's perception within the marketplace. The reality is that customers and prospects make assumptions about your brand based on your pricing. Not surprisingly, a study by Deloitte found that 31% of consumers perceive products with higher prices as having higher quality.

Given no other familiarity with a brand or lack of experience with a particular product, customers often make assumptions based on price. In fact, according to a survey conducted by Shopify, 43% of consumers consider price as the most important factor influencing their purchase decisions. Moreover, pricing can significantly impact how consumers perceive a brand in several ways, including:

• Perceived value: The pricing strategy employed by your brand can directly affect how consumers perceive your overall value proposition. A higher price may lead consumers to perceive your brand as offering higher quality, exclusivity, or luxury. On the other hand, lower prices may create the perception of affordability or value for money. Sale and discounted pricing can make customers believe they are either getting a great deal or that your brand has slipped in value and needs a promotional "carrot" to close the deal. When prices start dropping, some customers move on to the "next big thing."

• Positioning in the market: The pricing of your brand's products or services helps position it within the marketplace and among your competitors. A brand that positions itself as a luxury or premium option will typically have higher prices, aiming to attract a specific target audience seeking prestige and status. Conversely, brands that focus on affordability and accessibility will often have lower price points to cater to a broader consumer base.

• Brand image and prestige: Premium pricing can contribute to the perception of your brand as prestigious, exclusive, or aspirational. The perception of high prices can enhance a brand's image and attract consumers seeking a status symbol or a sense of belonging to an elite group. Many prestige brands have employed this strategy, including Tiffany, Rolls-Royce, and Gucci, among others.

• Price-quality relationship: Consumers tend to associate higher prices with better quality and lower prices with lower quality. This bias is known as the "price-quality heuristic," and it can shape consumer perception and influence their purchasing decisions. Additionally, premium pricing can create an image of exclusivity and superior craftsmanship, influencing consumers' perceptions of the brand's overall quality, while lower prices may be perceived as indicative of lower quality, low-effort craftsmanship, or inferior products.

Keep Control of Your Brand

Because of pricing's definite influence on a brand's perceived value, it makes sense why several manufacturers have employed a Minimum Advertised Pricing (MAP) strategy. Utilizing MAP allows manufacturers to develop and control how pricing contributes to their brand perception and perceived value in the marketplace.

However, to work effectively, this requires manufacturers to safeguard their pricing; to keep others, like online resellers, from degrading it. This is why price monitoring is critical to manufacturers who employ MAP. Otherwise, resellers can move your product from a perceived high-quality or prestige brand to the bargain basement very quickly.

Price monitoring has become easier than ever with real-time date SaaS solutions like MAPCOP. You can easily monitor your pricing among online retailers, 24/7, conveniently at your fingertips. It's simple to have your SKUs uploaded and immediately begin identifying MAP violations.

If you've yet to give MAPCOP a try, you can do so today with a no-obligation free trial.

It's important to note that brand perception can vary among different consumer segments and demographics. Effective brand management involves understanding these influences, including the power of pricing.

To be successful, you must consistently align your brand strategies and customer experiences to shape a positive, desired brand perception. That's simply the reality.