As CEOs, we often consider price discounts and sales to grow market share but, often, the opposite is what sells. As a graduate student at Northwestern University in the Medill IMC marketing program, I have studied the price to value relationship and found two articles you need to know about.
According to Maureen Morrison and Matthew Creamer's latest article How P&G, Ford and Wendy’s are Redefining Value from adage.com, those companies are trying to shift consumers’ perception of value from a product. The companies want to command premium prices for products which could offer convenience and high quality. The reason why they don’t choose the low price strategy again, because they’ve found value speaks directly and louder to what benefits a product or service could add to customer’s life. A good example in this article is Tide, a premium laundry detergent brand of P&G. Although its retail price is 35% higher than any cheaper offerings’ in Walmart, consumers still choose it when they find those bargain brands won’t offer the same effectiveness of cleaning clothes and they have to use three times of the dose of the bargain brands to reach the same effectiveness.
Jin (Jerry) Zhu is a M.S. Candidate in Integrated Marketing Communications at Medill, Northwestern University. Her three-year experience was in product and branding management in fashion and luxury industry. Her focus is on brand strategy and marketing analytics. She will be graduating in December 2013. Follow her @Huaijerry