Price is not King.
Often in-store and more often online, I hear and read about "price is king". Obviously the customers making these claims believe it and so do the individuals who quote these statements on their blogs, sites and social media.
However, making such a statement indicates a fundamental error in reason and logic. In fact, if it was this simple, business would be significantly less complicated. However, clearly it is not. No doubt situations exist where consumers would like to get the best deal for a comparable item.Â
Before starting the journey of finding the best price, it is imperative to unearth my needs. Once i know what I want, I have to figure out where, when and how I want it.
The journey starts by identifying the the competing retailers who may be able to help you. Squarely opposite what the retailers offer is what I would like.Â
These likes can be grouped into three categories:
Quality of Service(s) of Retailer (as the brand being purchased is a give, no comparison of quality is necessary)
Timeliness (Availability)
Price
Each retailer attempts to build a value proposition (not price proposition)Â based on these likes that better meet the need of the target market than those of competing retailers.
Considering each retailer, I have to ask myself the following questions:
Do I want the item immediately or can I wait a day/two/week for it to be delivered or for me to collect it? Is this acceptable to me to justify the lower price?
Does my time investment of going from one store to the next justify the potential saving?
What is my position towards after-sales service and repairs?
Price is important but only if the boxes of quality and timeliness have been ticked. In other words, you can select only two of price, quality and timeliness. If you choose price and quality, you cannot have timeliness or if you choose timeliness and quality you cannot have price and lastly if you choose price and timeliness, quality may be left behind.
It is a balance of these factors that retailers attempt to achieve that match the needs of their target market and therefore provide value to the consumer.
In the next few weeks I will discuss in detail what I have merely discussed briefly in context above.
NOTE:
[In my discussion we are specifically excluding luxury goods where emotional drive plays a significant role in purchasing and exclusivity, design and brand play and important role.]Â
