We all know the 4Ps of marketing: product, place, promotion, and price. It seems to be the norm for marketing to own at least the first three Ps, but pricing is usually left to other department such as the finance department. Perhaps it’s because the first three are a more natural fit for someone with a creative marketing background, while price is seen as more quantitative in nature — more fitting for someone who loves analyzing spreadsheets. Maybe this is the reason it often falls to finance to make decisions on pricing.
However, for a pricing strategy to make sense, it has to work for consumers or otherwise, they will stop buying our product. When this happens, it doesn’t matter if a theoretical profit model is being satisfied. Focusing on consumers should always drive our decisions, regardless of which P we’re talking about.
In this opportunity, our VP Pricing and Portfolio Solutions, Oskar Torneld and Director Asia-Pacific, Robin de Rooij explained at Campaign Asia the 3 big reasons why marketing and marketing research should get involved and take ownership of that last P of marketing.
3 reasons why marketing and marketing research should take ownership of pricing
Market research knows how to talk to consumers
Pricing is part of brand communication, and it has to be in sync with the rest of the message. We can’t communicate luxury in our advertising and price at a discount, or perhaps even more risky, communicate value and charge a premium. While the temptation might be to let profitability restrictions dictate how the product is priced, it’s important to also take into account how consumers would react to a price or change in price. Ad hoc research is often necessary in order to…