Prices, strategies, consumers

By: trademagazin Date: 2007. 02. 28. 08:00

Several factors can effect the profitability of a brand. Pricing is in the focus of brand strategy, which means we should understand how consumers interpret prices. The Shopper Trends survey prepared by ACNielsen in 50 countries shows us what consumers expect from retailers and helps us to understand how consumer behaviour is influenced by brand values. How do consumers react to the increasingly aggressive, price-focused retail environment? Though competitive prices are regarded as important by consumers, “discount prices” are not an especially powerful tool for attracting consumers to particular chains. Some other forms of added value can have more influence on consumers’ choice of retail chain to visit than low prices. For example, adequate stocks of quality products, ease of access, or the composition of assortment can be a more important consideration for customers. Shopper Trends revealed what customers say about their priorities and how they behave in six major markets. Adequate and diverse assortment is regarded as far more important than depressed prices, because customers prefer to buy everything in one place, if possible. Analysts from ACNielsen have pointed out three typical price strategies in European retail Trade:
1. Cost-based pricing where a certain margin is added to costs is used most frequently by manufacturers.
2. Competition-based pricing takes the strategy of competitors into consideration and defines itself as offensive or defensive in comparison with these. This is used by competition-oriented enterprises which position themselves against another enterprise or product.
3. Value-based pricing is based on consumers’ appreciation for a brand. This value is often quite independent of costs. Marketing-oriented enterprises prefer this approach. Other pricing strategies are regarded as derivatives of the above three.

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