Pricing and Communication |
The Communication Power Of PriceBy: Robert F. Abbott When I go about selling my book, one of the issues I face is pricing. Library wholesalers, for example, tell me it's too expensive for them to put in their catalogs. On the other hand, my research indicates the price is probably on the low side when it comes to specialized management books. Further, in setting my marketing strategy, I decided a perceived high price would be better than a perceived low price, to distinguish it from the other books on newsletters. More specifically, I wanted to convey the uniqueness of the book - it's the only one that approaches newsletters from a managerial, rather than editorial perspective. Somewhere along the way, of course, income and expense issues have to enter into a pricing strategy. In the book publishing industry, for example, the rule of thumb is that your retail price should be at least eight times the cost of production (mainly printing). Still, pricing should strongly reflect marketing strategies. Of all the elements in a marketing mix, price may be one of the most potent communicator of messages. Consider: One of the ways that prospects and customers may judge quality, and other factors, too, by reflecting on the price. On the flip side, the way customers react to prices also sends messages back to us. Traditionally, price has been a surrogate for quality, as in, "You get what you pay for." A Cadillac costs more than a Chevrolet, and you can see the difference. Of course, slick marketers also realized they could use this widely-held perception to trick prospects and customers. For buyers, price also can be a surrogate objection, as in, "I'd love to buy this car, but I can't afford it." Prospective customers use price as an objection because it's easy to do or because they can't articulate why they don't want a particular product. Price can also communicate exclusiveness. By setting prices that seem absurdly high to most of the market, sophisticated marketers can offer well-heeled clients a unique experience. In the same way, price communicates rareness. Does the pricing of diamonds reflect the cost of finding, mining, processing, and marketing them? Of course not. Diamonds are expensive because they are rare and monopolies can be maintained. At the same time, though, that rareness makes them a unique gift, and as we all know, highly symbolic. Price also communicates messages to your competitors, including your positioning, your aggressiveness for market share, and your ability to sustain competitive pressure, as in a price war, for example. Finally, it sends messages to your channel partners (in my case, wholesalers and distributors); giving them some idea of the quantity they can expect to move, all other things being equal. In summary, marketing considerations should be a key factor in setting prices for products and services. Prices represent one of the most important factors in communication to and from customers. To read another article, click here More communication resources...Want to make your writing more lively, more interesting, and more effective? Robert Abbott shows you three quick and easy techniques for achieving those goals, and as a result, getting better results. You get the techniques, a practice document, and an example document in one concise booklet.
One of my favorite resources on public speaking is a free newsletter that arrives by email -- Tom Antion's Great Speaking. Whether you're an experienced speaker/presenter or you're just getting started, this newsletter will help you.
Effective communication begins with a strategy. A plan and a statement that ensure you put your words into the right framework. How to Craft a Communication Strategy, guides you through the four steps involved in developing a strategy and a statement for the strategy. Want to know more? http://www.effective-communication.com/booklets.htm
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Copyright Robert F. Abbott 1999-2006 |
What do you need to know before you begin writing or designing your newsletter? Find the answers in A Manager's Guide to Newsletters: Communicating for Results, the response-focused newsletter book. It was written by Robert F. Abbott, who wrote most of the communication articles you've seen above.