Differentiation using pricing

Price point is a common distinguishing characteristic used to market products. Thre are textbooks which devote an entire chapter to discuss how companies can use pricing strategies to differentiate themselves, but here, I will just share with you, three basic price positions that are often used in marketing.

A company can differentiate itself by using low price point. In this way, it expects to attract price-oriented consumers who are looking for products which are the lowest priced, yet meets a minimum standard.

A company can differentiate itself by using middle price point. In this way, it expects to appeal to consumers who are price-conscious, but also value-oriented. Such customers want to look for products which give value for money and has certain desired product attributes, not necessarily the cheapest.

A company can differentiate itself by using high price point. In this way, it expects to buy in customers who are not price-sensitive but are looking for a top quality product. A high price point is a common and expected match to a top quality product. Hence, high-end or luxury brands with high price points are typically marketed as best quality, best service or with other top-notch sought-after qualities to match their prices.

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