Getting customers to pay more
When a new brand launches and compares itself to the rest of the market, it must be tempting to put a price tag below your competitors or simply a few pence more.
It’s difficult, when “recession” has been the watchword for what seems like forever, for companies not to become solely price-led or offers led.
So how do you get consumers to pay more for your product? The latest research by marketing agency Iris, sheds some light on this complicated area.
It asked consumers to rate brand’s values and then asked if they would be willing to pay more for a particular product.
Almost a third of respondents said they’d pay more for Innocent smoothies and Coca-Cola, compared to only 12% saying they’d pay more for Pepsi. Consumers apparently perceive Innocent and Coke as better quality than a fizzy can of Pepsi.
It’s easy to see why a fruit smoothie is seen as a good quality drink, but interesting to see that vegetable-based carbonated drinks Coke and Pepsi draw such variable results. What makes these drinks so different? Is it the years of powerful advertising campaigns that help Coke to pull ahead?
The alcohol industry has spent a vast amount in advertising to help brands stand out and the results in this survey show it’s not simply a case of advertising spend or positioning that motivate people to pay more for a particular brand.
Almost a third are willing to pay more for Jack Daniel’s whisky compared to only 11% who would be prepared to spend more money on Johnnie Walker, despite the fact that this brand is positioned as the more premium brand.
Jack Daniel’s is a more accessible version of premium, argues Iris’ executive planning director Sam Noble. The recession has made people evaluate their spend in ways that they might not have done previously. In the alcohol sector, the study suggests that if a brand comes across as too exclusive, the next option down still makes you feel like you’ve treated yourself, without the guilty feeling.
The balance that brands have to strike between being seen as better than rivals yet remaining accessible is tricky. And predictions from this study suggest that consumers might not change their behaviour when the good times come back. Considered consumption, it seems, is here to stay.
To read more on Iris’s study click here
