Will high-price strategy feed back into marketing growth?

Yesterday, after "Cong Yan Cong Yu" attracted everyone to make sentences, Zhong Xue Gao was probably the most popular brand, with two consecutive pieces of content appearing on the hot searches on Weibo.

This "Hermes of the ice cream world" has once again successfully attracted people's attention with its high price. Its founder claimed: The cost of Zhong Xue Gao is only 40, you can take it or not.

I just don’t understand where the confidence of this tile-shaped ice cream comes from, and why it can “run rampant in the world” with a premium of nearly 10 times? You know, the normal price of ice cream is only 4 to 5 yuan, and the old yyds popsicle is only about 2 yuan. Maybe it really answered the netizens' words -

Coincidentally, some time ago, Nongfu Spring dominated the screen for a long time with the packaging design of its ninth new product this year, the natural snow mountain mineral water "Changbaixue". At the same time, it priced "Changbaixue" at 3 yuan, officially differentiating it from the 2 yuan natural water.

Marketing guru Kotler said: "You don't sell products by price, you sell the price."

In the 4P marketing theory, price is an important part of brand strategy.

So, what is the relationship between brands’ “high-price strategy” and “marketing”? Can a high-price strategy help brand marketing growth? Today, I want to talk about a specific case.

1. The information conveyed by high prices is itself a kind of positioning

For many new products, pricing is often not set for sales but for product positioning. There has always been a rule in the marketing world: if a product is launched at a high price, it will be difficult at first but will become easy later; if a product is launched at a low price, it will be easy at first but will become difficult later.

What you may not know is that as early as April this year, Zhong Xue Gao released two new products with unit prices of 68 yuan and 88 yuan respectively, which were only sold in the form of "series" packages. Not only did the prices set a record high, but they were sold out as soon as they were launched on the market. There was even a scalper price of 200 yuan per box (i.e. one stick) for purchasing. "The Hermes of ice cream" has become the mainstream impression of Zhong Xue Gao in the minds of netizens;

In addition, the well-known Xiaoguan Tea created by Du Guoying has positioned itself as a "high-end gift tea" since its inception, quickly finding a blue ocean in the niche category and achieving a market breakthrough through price.

We originally thought that product prices were composed of raw materials, labor, and appropriate profits. Now, product prices have the meaning of product positioning. They demonstrate the brand's long-term considerations in the segmented category, allowing the brand to stand out from the "mediocrity" and quickly gain the attention of consumers.

2. Price is a cognitive tool that affects consumer perception

As the saying goes, “You get what you pay for.” For consumers, price is an important label that represents product quality before the consumption experience. The product value that consumers can perceive is the value they really want to buy, that is, whether the product is worth the price in the consumer's perception.

No matter what the product is like, consumers will only have the desire to buy it if they perceive it as "good";

Regardless of whether the product is cost-effective or not, if consumers feel that it is "great value for money", then the probability that they will pay for "high value" is even higher...

We often use the word “cheap” to describe the low price of a product. In fact, its essence is to make consumers feel that they are getting a good deal. The same goes for high prices. It is not a simple number. The key is to create people's recognition of the brand's "high value".

Let's take a very simple example. When you go to a restaurant to eat, the same dish will give people a "high price" perception when it changes to a different environment and location.

There is also a very interesting phenomenon. Whether it is Starbucks or IKEA and other brand stores, they always put some products that are irrelevant to themselves or even have very high prices. For example, Starbucks sells Evian water for 20 yuan. Although a cup of coffee in Starbucks costs 30 or 40 yuan, when the prices have a certain comparison, consumers' perception is different. These are the cleverness of the brands. The high-price strategy is actually a psychological game between the brands and the consumers, which leaves much more room for imagination than facts.

3. High prices are a means of competition

The most famous story is the one between Kodak and Fuji of Japan.

In the early 1970s, Kodak suddenly announced a price cut for its color films, which immediately attracted a large number of consumers, squeezed out similar companies in other countries, and even monopolized 90% of the color film market. By the mid-1980s, the Japanese film market was monopolized by Fujifilm, which overwhelmed Kodak. After careful research, Kodak discovered that the Japanese generally tended to value quality over price when it came to goods. So it developed a high-price strategy to establish its brand and protect its reputation, and developed a trading joint venture in Japan that specialized in selling Kodak film at a price ½ higher than Fuji. After five years of hard work and competition, Kodak was finally accepted by Japan and entered the Japanese market, becoming a brand on par with Fuji, and its sales also soared.

We have seen that in the process of brand competition, low prices are always no match for high prices and are defeated by high prices. The reason is that lowering prices is easy to be imitated, and blindly lowering prices will inevitably cause people to doubt the quality of the product. In addition to maintaining the brand's reputation, high prices can also expand the brand's profit margin, facilitate the brand's marketing activities, and use marketing to support consumers' recognition of prices.

4. Low price or high price is actually the difference between promotion and marketing

Low prices determine that the core element of marketing can only be price, but high-priced marketing activities can be rich and diverse.

In the past, we could achieve brand premium upgrades only by relying on solid product quality, but the process was very slow; now, many "Internet celebrity brands" have suddenly entered the public eye, and the factors of brand premium can be determined by many factors:

It could be an unconventional price setting, or exquisite external packaging, or even misleading statements that seem to blatantly "challenge" the bottom line of public acceptance... Its ultimate essence is to create a brand effect and quickly increase brand awareness.

However, some brands know how to “play to their strengths” and stand with consumers’ real needs to achieve marketing growth, such as Nongfu Spring; but some brands are “proud” of creating topics. Whether their brand appeals to promote marketing growth can win the favor of consumers remains a question mark...

Author: Yi An

Source: Yian