Feature pricing is the cornerstone of North American marketing strategy. Canadians and Americans alike will spend hours searching out what they perceive as a ‘deal’. They talk about the great deals that they got and gain bragging rights for particularly large discounts. We as a society approach price deals like our ancestors approached a good hunting trophy. My own mother-in-law comes from Europe to stay and turns into a fanatic about finding deals.
How do you plan for this when you are taking a product to market? The savvy manufacturer will set aside a certain amount of profit for feature pricing. A well-planned and executed feature-pricing plan is the fertilizer that will make your sales grow. When your product goes on deal at 15 or more percent off the regular price consumers are suddenly inspired to buy 2 and perhaps they will try that new flavor that you just came out with. We have all seen what can happen when a product goes on sale at 2 for 1. It conjures visions of fistfights in store aisles. Imagine if a car dealer offered 50% off for a limited time. If it was well timed and advertised, riots could be the result.
Every manufacturer wants people to talk about their product and spread the news. Feature pricing at 15% off, 3 or 4 time per year will keep a product in consumer’s thoughts. However, consumers will wait for the sale if it is too predictable. Timing has to be considered as well. I personally don’t care how good the price is; I will not buy flip-flops in the middle of winter unless I am going on a tropical vacation. In some parts of Europe the government regulates the timing of sales. Retailers are not allowed to feature more than 2 times per year for 2 weeks each time in January and July.
Whether you are a consumer or a manufacturer. It pays to examine yourself in the place of the consumer. Think about when you would buy this or that product. What time of year, or what personal circumstance. Always keep your consumer hat on and be a thoughtful consumer. What are you being sold in an aggressive manner and why? Is it working?
Written by: Leanne Ward
