Pricing Strategies - The customer ultimately has to pay the price and purchase the product. The price of a product has to be precisely determined. Too high prices would result in consumers not buying the product, and too low prices would not be profitable depending on the type of product. In case of products with short product life cycle: -

1. Sell the product right away with minimum down-payment and recover the money in future in form of equated monthly installments. For example, in case of products with high price, it is difficult for the customers to pay the price at one go, so they pay some amount of money initially, and then rest of the amount is paid in installments. In fact this strategy has brought a revolution of sorts in recent times with the consumers able to make high and multiple purchases.

2. It is believed that the consumer makes the maximum purchase in festive seasons. So a product can be made attractive by combining additional gifts, or companies can have a combination of products for sale. This type of strategy is especially useful when the consumer wants to make multiple purchases.

3. Offer discounts on early purchases or introduction stage. And just as the product enters the growth stage and demand increases, increase the price. But this is not followed by the companies today, because of intense competition. Instead, this is used in the test phase to determine how much price the consumer would pay for the product.

Brand equity can also be created by merchandising - Though it is more of a concept extension, but sometimes it works well for the product. Companies should take a cue from Pantaloons which has perfected this art.

Meet the consumer's expectations and empower the consumer - Like we saw earlier, it's very easy for brands to create expectations but most of them fail to meet the standard of expectation set by them. Now that the marketing philosophy emphasizes so much on the consumer, it is important for the companies to set the right kind of expectation. The next alternative would be to involve the consumer in product development process. Not only involve but also inform, engage and energize them in the process of building the product. In this way, the product gains a fair share of consumer's mind and heart.

All these initiatives will not only create brand equity but also value equity and relationship equity. In short, don't sell products... empower the customer.

Concluded.

* Contributed by: -
Saikat Dey & Madhulika Verma,
ICFAI Business School, Gurgaon.