The Price as Marketing

The Price as Marketing
Excel Spreadsheets

The price you put into your business says a lot about your business. Mentally, the customer will already assume a lot about your business, the quality of your product and how your service works compared to its history of similar products. In addition, the price will also affect the other definitions of your marketing mix.

See also: All About Pricing

The 4P's of Marketing (composed of marketing or marketing mix)

Any and all marketing strategy can be explained through the definition of the famous 4P's:

  • Price
  • Product
  • Square
  • Promotion

And the most interesting thing is that they are shown separately as didactic, but in reality they are completely interconnected. For this reason, it is understandable that the price is used as a marketing strategy. And this is not just in discount strategies, but as constant positioning of the business. Let's do an exercise, imagine two different companies that sell mineral water.

  • Company A: bottle of water costs $ 2,00
  • Company B: Water bottle costs $ 15,00

Without knowing about the business itself, what can we imagine of each of the marketing compound items of each of them? Reflect a little before continuing reading, this will show you the impact of price on marketing and our perception of value.


Now let's go to the considerations you might have thought of as I thought:

a) Because it is much cheaper, company A should also be of lower quality.

b) To sell such expensive water, company B must sell to people of greater purchasing power.

c) I would never pay R $ 15,00 for a water on the street.

d) To pay R $ 15,00, they would have to have a good argument.

e) A bottle of $ 2,00, has to sell a lot to make a profit.

f) You will hardly see the advertisement of a water of $ 2,00 on TV

Well, those are just a few ideas that occurred to me while I wrote the post, but that are already used to build the marketing mix of the two companies based on those premises.

Company A

  • Price: R $ 2,00
  • Product: Popular water
  • Square: Probably on the street in street vendors
  • Promotion: Almost anything, just the same sellers and market shelves

Company B

  • Price: R $ 15,00
  • Product: Premium water
  • Square: Probably restaurants, luxurious places
  • Promotion: Famous actors in TV commercials

Marketing Strategies for Your Pricing

As we have seen, each price of each product tells a lot about the marketing strategy being used and the positioning that the business wants to have in its market. Some of the key strategies have already been mapped and can be summarized in an array with 4 large groups:

  1. Premium: The premium products are those that possess the highest quality and also the highest prices. This is an almost always desired strategy because it typically comes with higher profit margins.
  2. Discounts: This is the case of your product being of poor quality, but with the high price. With this, you want to generate the perception of greater value, but being willing to give aggressive discounts as a marketing strategy.
  3. Penetration: When your quality is high, but you practice low prices, the result is fast market gain. The idea here is to get as many customers as possible, to keep it loyal and then gradually increase the price.
  4. Economy: If your product is of low quality and also low price, you are in the balance for price. The value you generate to your customer is precisely to have the lowest price on the market!
Excel Spreadsheets



Please, write your comment
Please enter your name