Almost everyone does it.
They get a product, look at the range of prices competitors charge, then charge somewhere in the middle.
If they are a smaller business, they can’t afford to price at the low end – that’s normally a position reserved for large companies.
If they price at the top end, they need to be able to explain why the customer should pay a premium.
It all gets too hard, so they price in the middle.
If you sit in the middle of the road long enough, you are going to get run over.
How your product is priced is intertwined with your brand strategy.
You have to have a brand strategy because people buy brands, they don’t buy no-names.
And your brand needs to mean something to them or it isn’t branding.
So this morning I saw a question in a forum relating to pricing in the middle of the road.
The business was getting buffeted by a price war and was wondering what to do. The answer is simple. The best thing to do is hold your price and execute a niche marketing strategy.
There is lots of information in this blog about pricing strategy (partly because it’s such an important component of marketing and also because there is little information around).
By the way, this person’s question is not uncommon. Businesses don’t know what to do.
However you price, you need a brand strategy to back it up. Narrow your focus to a profitable niche, hold your price, and align your brand to that niche.
And for a final word on price wars. Often, the very best thing a business in a price war can do is nothing. Zip. Nada. Competitors eventually price themselves out of the market with the slash and burn, and you’ll be left standing with your brand and pricing strategies intact. Fewer competition = greater opportunities for you. Not a bad outcome once the war is over.
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