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Price and branding

The first impression matters: How pricing affects the value of your product

consumer behaviour psychology of price

As the saying goes, "you never get a second chance to make a first impression." This holds true not only in personal relationships but also in business. Your product pricing, in particular, makes a significant impact on the perception of your product's value. In this blog, we'll discuss how pricing affects customer perception and offer tips on how to set the right price for your product.

You need to understand that your target audience plays a critical role in pricing your product. Different people have different purchasing behavior, and the price that one group finds reasonable may seem exorbitant to another. Thus, it's crucial to evaluate who your customers are, what they value, and what they can afford.

"Too high or too low pricing can create an unfavorable perception of your product. If you set the price too high, potential customers are bound to compare it to other products in the market and may decide not to proceed with the purchase. Conversely, if the pricing is too low, consumers tend to doubt the quality and view it as a cheaper alternative instead of a valuable investment."

Think about what your competitors are doing. Research about similar products on the market, their quality, and their pricing strategy. Analyzing their pricing and understanding how they've priced their products compared to yours can give you a better understanding of how to price your product competitively. Pricing your products too high or too low compared to those of your competitors can negatively affect your sales.

You may want to consider offering deals, discounts, or limited-time offers to entice potential customers. These promotions can be used to launch your business, test the market, or temporarily increase revenue. Make sure you price the product just right to cover the costs and gain a profit while offering these promotions to customers.

Key actions to consider when setting the price:

  1. Consider your target audience and their purchasing behavior, as well as similar products in the market and competitors' pricing strategies.
  2. Be mindful of pricing too high or too low; customers may compare prices with other products and doubt quality when the price is too low.
  3. Promotions such as discounts, deals, or limited-time offers can help attract customers.
  4. Ultimately, the perceived value of your product should equal or exceed its cost. This includes branding, packaging, customer support, and overall brand perception.

You can consider your pricing options based on your product characteristics. If your product is unique or offers exceptional features compared to your competitors, you can price it higher to reflect its value. Alternatively, if you're selling a product that's more generic or common but still high-quality, you can price it lower to attract more budget-conscious customers.

Download FREE Price Sensitivity Workbook It has 5 questions you should ask your customers to understand their price sensivity.  Before using the sensitivity workbook read more on Understanding the price sensitivity of buyers.

Setting the right price for your product is crucial in creating a positive first impression on your potential customers. The perception of the value of your product relies heavily on your pricing strategy. By understanding your target audience, analyzing your competition, offering promotions, and pricing your products according to their specific characteristics, you can set the right price that makes your product stand out in the market and attract potential customers. Remember that price is not solely based on the cost of production. The value of your product also lies in your branding, packaging, customer support, and overall brand perception. So, ensure that everything else equals or exceeds the perceived value of your product.

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