The Pricing Strategy Assessment
The Wall Street Journal’s July 3, 2009 reported, “Rising Job Losses Damp Hopes of Recovery.” These stressful economic times place enormous pressure on printers, packagers and converters to adopt strategies that will build back their sales. Pricing strategies can have a dynamic impact on profits, so they should be considered as carefully as all other branding and advertising strategies. After all, over time a 10% reduction in profits can significantly impact what your printing company can and cannot afford to invest in or fund.
Price branding has a place in a brand program. Let’s look at two different printers using two very different price branding strategies.
Printer #1: This first printing company decides to feature one of its presses capabilities. A branding campaign is prepared to run as a special 90-day promotion that offers reduced pricing to customers who send projects that fit their printing company’s press. The company promises at the end of the promotion to promote heavily the best print samples using direct mailings and a special website that highlights the creative printing that was produced.
Printer #2: The second printing company’s sales management decides it needs to build new sales in the next 90 days and calls in its sales representatives and tells them they can lower pricing to win new business. This decision is based on motivating the sales representatives to make more calls to everyone they know and to be aggressive in getting new orders. New orders are brought in, including some from existing customers that are glad to have a better than average price for their everyday printing, and then the push ends.
Of these two printers, which do you think benefited more from their 90-day price branding? The first positioned how they wanted to be perceived by their target audience. Price was a factor, not the primary factor, so its brand was enhanced. Printer number two, on the other hand, created panic inside their company and outside in their marketplace. They painted a picture of a printing company who desperately needs more printing.
The bottom line is your price is a major way your customers place a value on your company. If you use price as a brand strategy you risk lowering your brand’s value among your customers – and that is a branding problem. As the joke goes, what we don’t make on individual projects we’ll make up in volume! Unfortunately, that rarely works.