Lure of Lucre

Revenue success is perilous. Yes it is, when line marketing is unthought. This comes as an extension to a prior discussion with the MD of a "Fortune 100 best companies to work for" organizations. Also a one plus one (officially unreleased)buzz about Merc launching 'affordable' cars for the yuppies in Asia(to take on Chevrolet, Honda, Skoda in the segment ??!). What this discussion was about, was the apt pricing that needs to be done for the technology product that his company puts on the shelf. And he corroborated his 'cheaper sells' theory with the example of 'lapping up (the cheaper)Merc phenomenon' if it were to happen. And so it is!

BMW has already gone and done it. It has made itself an affordable(read, common) item with the 1 Series in Europe. The price of owning a BMW is no longer pocketholing. It for sure, shall bring in the promised revenue shower as well. But on the altar is a tradeoff of price vs prize(which it shall soon cease to be).

How should a Pricing be? Well, there are many a books and theories and talks, and 'pay for' research reports on this. My thoughts for free.

There's oft a blur between apt pricing and becoming cheap. We know that. A brand that's built has more to do to safeguard it because that's the only trump it's cashing on. Rest all disparities are as good as gone be it technology or innovation funding. Being Expensive has a certain amount of prestige to it. Corollary: What's prestigious will be expensive. But expensive is not being 'pricey'. Being pricey is when you are not even targetting pricewise the segment you were intending to target, therefore missing the mark. It's like this:

You have to place your grapes at the optimum height, where the fox does'nt give up even before he tries(that is, if the fox is at all the segment you are targeting) because it's just too high and sour(pricey). Neither should you put it too close to his mouth, which makes it too easy and therefore less prizey for him. A foot or two above, and you get him interested..real interested to the point where he not just finds the grapes worthy, but also shall be willing to pay the tree to lower the branch.

Consumers don't prefer cheap stuff. They prefer the best, the costliest, the priziest that falls within their budget...even a wee outside their budget. And that's how the pricing should be. Highlight your target market and price your product slightly more than what it is willing to pay.

If it's a Grand Vitara you cannot let it be driven by less grand people. Neither can you make it grandiose to match a Merc. The opposite holds greater truth. Almost like puncturing the air of propriety of 'appropriate' merc'ers driving alongside the 'inappropriate' ones in days to come. The prize car maker should know that better.