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Pricing can be used as a marketing strategy or as a way to increase perceptions of quality. Sometimes it’s baked directly into a brand’s ethos.
It’s so much more than a simple calculation—pricing, especially the practice of psychological pricing, can have a real impact on the purchasing decisions of your customers.
This is a balancing act. A low price isn’t always ideal, as the product might see a healthy stream of sales without turning any profit. Similarly, when a product has a high price, a retailer may see fewer sales and “price out” more budget-conscious customers, losing market positioning.
Ultimately, every small business will have to do its homework. Retailers have to consider factors like cost of production, consumer trends, revenue goals, and competitor pricing. Even then, setting a price for a product isn’t just pure math (numbers behave in a logical way; humans, not so much).
Brands and brand managers must learn to embrace the more inflationary environment.
Inflation gives you the flexibility to do a lot of things.
It’s not particularly fun to brainstorm ways to cut back your marketing budget year after year. It’s far more invigorating to consider an environment where you have more money to play with and a broader set of tools at your disposal for continuing to grow your brand.
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