Retailers these days spend a while to figure out what's the best price tag to slap on their merchandise. They wonder, should they study neuro-linguistic programming or complicated marketing economics to understand the psychology of how and why people buy? Does it have to be that complicated?
It doesn't have to be because really, it's never about the price.
You look at an amazing pair of hand-crafted denim jeans, stone-washed and fading at the right places, carrying the right label subtly on the back and desire overwhelms you.
You start dreaming about how you'd look in them, how small your hips would look when you let it snuggle just below your hipbone and your mind starts to tick really quickly, thinking how can you buy this in the shortest time possible.
You close the fashion magazine that you're looking at and start googling its retail price. Perhaps to your aghast, it will cost you 150 dollars for you to take it home. You may not be able to afford it right now….but you think of ways of how and when you can. You plot, you scheme and you sketch outlines of different ways to put your plan into action.
You, my reader, have just embarked on a journey of turning your desires into reality. That journey that you make, where the final destination is the store outlet and the last thing you hear that marks the end of that journey is the sound of the cash register, when you look back in hindsight, it didn't matter how much the pair of jeans were.
It could have been 89.95, 250.60 or 435.00 dollars, but it didn't matter. Your desire to buy them was so powerful that the price served merely as a goal or a target for you to aim towards to in order to afford them.
Does that make sense? It's just a pair of jeans some may argue but then some may argue back, defensively, it's not only JUST a pair of jeans…it's Calvin Klein or Gucci or Levi’s… Such arguments may hold no logic, no rationale but that's just the way it is. That means people don't care how much you charge as long as they can validate their purchase through its perceived value.
Now, as we all know in ancient marketing, value of a particular merchandise especially in the fashion industry, is not offered through its tangible features.
It didn't matter if the glittery pair of Manolos don't offer the same plush comfort as a pair of Hush Puppies suede shoes do, because what the consumer is essentially purchasing is the Sex and the City glamorous high life and not really soles to walk on.
A woman who can pull off a pair of Manolos is seen as a trendsetter, not a follower-a role that some women may aspire to and will walk over broken glass to own at least a pair in her lifetime.
Now, you may ask, what if the large percentage of masses may never afford to wear what you're selling? Those who are earning less than a certain wage bracket will never be able to buy those clothes at premium pricing.
Well, good for you because those people are not your target market. They're not who you want to be seen carrying your label. You are not Kmart and your store's sofas are not designed for children, babies in strollers and massive traffic.
You are not about to offer 70 per cent off all your merchandise because if you do, not only you have to hire more staff to handle the flow of boisterous customers but you might detract the right kind of customers who WILL pay $1000 for that pair of boots.
Which brings us to an important fact: price usually matters only when you set out to offer or alter one’s perception on your products. When you pay a slightly lower price for a pair of sneakers, say $20, you automatically doubt the prestige and the awesome factor that comes with that pair of shoes. You question its source, its origins and its brand.
If the brand of the sneakers is well-known, you wonder if it's made in China or Vietnam or Bangladesh. Who doesn't? If it's not premium pricing that you're paying, then surely the quality or the authenticity of the label must be questioned. Now, that is not what you want for your brand. You don't want to be labelled as The Reject Shop.
No price is arbitrary. They must be strategically designed to a price point so that they attract the right kind of customers, who at that point in their own journey, be able to pay that price.
It's beyond service, it's beyond the product, it's beyond rationale, people have already made up their minds when they decide to purchase and nothing will stop them from doing so.
Mark Davis is an international speaker and trainer and author on www.coachmarkdavis.com. He draws from a diverse range of studies, life experiences and successes in multiple platforms like the internet, education, marketing, sales and communications.