For many product groups, with a slightly higher price is part of the implementation of a quality image in the minds of those who buy and use the product. Companies that their products are missing on the basis of price-cost is often the place and hurt sales by prices that are too low. As you can see the price and non-price methods to improve sales and profits of your job?
In the 1970's, Kentucky Fried Chicken are generally offered two types of chickens, one prepared byColonel Sanders' original recipe and others like that are typically found "Crispy" Fried Chicken across the southern United States. Since the crispy chicken were offered, were both products the same price. The concept behind this approach was that the company's competitors usually sell their products at lower prices, crunchy, and the less attention to the price difference, the better.
Original recipe was actually less expensive than the product make it crispy. Colonel Sandershis product was well designed. He had his taste of the product better and easier to prepare. Some people in the company was taking into account cutting the price on the original recipe. This would reduce the price gap with competitors.
The research results showed something quite different. Customers who believe that the original recipe chicken was a better deal and thought that it was worth a premium price. They reported that were confused by the basic crispy and original recipePrice equal. They also had some doubts about the quality of crispy product that doubts about the quality of the original recipe, if it sells for the same price created.
It was a test to collect five percent premium to the original recipe made, together with a blue ribbon set on the containers. Volume increased for both original recipe KFC. Consumers reported that the original recipe for increased quality. And it may have. Knowing that customers already pay more for it, the chefsmight have given more attention. This successful program ran for many years before volumes parity between the two products was introduced by a new management team again.
The introduction of a premium-priced brand can make a similar positive effect on adding profitable market share. Black & Decker found out that level when they received the more expensive DeWalt line of portable power tools. While many people who want to do home improvements, the cheapest product, will execute the work,others are proud of their work and enjoy the feeling and look of the top-quality instruments, while they work. And those Tool fans will be happy to pay a high price for the premium-feeling, even retrofitted.
By offering both brands, Black & Decker can be more competitive on prices with those on the functioning of a product, support during and thus more competitive on the image and quality for those who are sensitive about these factors. As a result, the company was able toGain market share and expand profits even faster.
Where you can strengthen a quality performance to price changes?
Copyright 2008 Donald W. Mitchell, All Rights Reserved
My Links : Dewalt tools
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