Product, Place, Price and Promotion
What is that? Does it sound familiar? Those wonderful words stand behind the core principles of Marketing. Let’s examine an important part of the mix: the Price of something you sell. Whether you sell an ebook, a small rosemary plant, a boxed lunch, a cruise vacation or a large bottle of salad dressing – all these items have to have a price associated with them for you to consider making the purchase, correct?
The reason for this blog post tonight is that I made a trip to our local Farmer’s Market. I encountered a very nice couple selling their salad dressings. The dressings sounded remarkable – great product descriptions, natural ingredients, cool trendy labels and here they were promoting their product right next to the leafy green veggies at the market – good positioning, right? Not so fast. I tasted one of the salad dressings and it was delightful! A great blend of spices (fresh), not to runny, not too thick either….I really loved it. I saw the 16 ounce bottle and wondered (hmmm, I wonder how much?). One of the owners smiled and said, “$8!” What? Really? I thought to myself, this is not right. For a product of this quality and size they are only selling it for $8? I really did not believe it when she told me the price. I actually told them (after hesitating a split second) “that price is too low – you should sell it for $12“. I guess I am thinking about marketing way too much.
I thought about how hard it was for them to be in the hot sun selling these salad dressings all day in the open air market. I thought about them having to use a commercial kitchen to make these items. And then there is the labeling and the cost of the bottle and the cost to ship the labels and the bottles to them. I wondered if they had really included all of their costs in making this pricing decision. Most likely, our salad dressing creators did not think of all the handling, shipping, production, etc. costs in the making of this product.
Could I be wrong? Absolutely! Is the price perfect in their eyes? Sure.
Could they possibly be trying to get a foot in the market first and then raise the price? Perhaps that is the situation, but that is a problem later on if I go to buy it and then the price has doubled. It leaves the consumer with a bad feeling. Your brand would be losing its value already.
Pricing is not an exact science.
You have to understand “what the market will bear” in the price as well. There are many talented Etsy craft people doing amazing things with yarn and felt and numerous handcrafted pieces, but if you add up the hours into a project sometimes you cannot sell it for all those man-hours. It will actually sell at what the marketplace feels is the fair and balanced price. Perhaps our salad dressing people are just looking around to see what is selling in the supermarkets. But you cannot compare their product with something mass produced on the grocery store shelves. It is clearly not the same. That as a very fresh, high quality product that I tasted!
Set yourself up to sell at least two units by leveraging the Price and Quantity
A neat way to structure your pricing is to do what the Bath and Body Works salespeople have been successfully implementing for years. It’s a tried and true method. Do you know what method I am describing? It’s the ….Buy One for $16….Get Two for $20 … or Three for $26! ……Yes. This is one of the best pricing schemes out there and it works like a charm. As you go through the numbers, your customer knows the deal is getting better and better and they start thinking that – “gee I really could use 2″ or “with 3 I can give them as a present to my friend – she likes salad dressings just like me!” Ah ha! Now you are selling! By marketing and selling your products to get the maximum reach you are also moving inventory – making profit. I hope your website address is on every label! Always point out to customers how they can buy more when the product is depleted.
The new hot item now is the QR code. This is that black square picture that you can place your smartphone up too…take a picture…and be automatically lead to the website of that product. Should our salad dressing people have that on their label? Absolutely! I will discuss QR codes in my next blog post. Stay tuned!
Have I made you think a bit about your pricing? When was the last time you raised your prices? Are you lowering your price and giving coupons out? Do you think you can last with these methods? With the price of gas increasing, your shipping costs are just getting higher. Be sure to price out your products correctly so you don’t end up having a hobby instead of a business. Make money. Pick the right price. Have fun selling and growing your business. It’s the only way to go. If I can assist with your marketing ideas in any way, please connect with me here and let’s get started! – Jan.
Note: a Quick review of the Bath and Body Works site reveals their recent tactic of “Buy 3, Get Two Free”. So, you leave with 5 of one item. Wow, inventory must be moving at the stores. Remember, it’s a combination of the price and the quantity that contributes to the items perceived value and great deal. Good luck and happy selling!