All of us are aware of the famous 4 P’s of Marketing but do we really understand the importance of all of them. Today I just want to draw your attention towards one of the Pillars of Marketing that is Price.
Price of a product/service plays a major role in its success or failure. I have several examples to substantiate the same. Let’s have a look at auto majors of the country.
Maruti recently launched rather re-launched its new car Eeco. But many of the auto enthusiasts might remember that this car looks exactly similar to its earlier model Versa. Versa was priced at around 4.5 lakh ex-showroom Delhi and in spite of marketing via brand ambassador like the Bachchans the car failed miserably and price was one of the most important reasons for this. Now the same car has been re-launched with a new name and new price. Price that is quite cheaper than the earlier model, almost half of the previous one. Neither the car is endorsed by any celebrity now but the car is selling big volumes for Maruti- the Company that recently made a record of selling 1 lakh cars in a month.
Another example of this is the America auto major Ford. Ford launched its Fusion in India quite a few years back with a price of more than 6.5 lakh rupees and the company claimed to change the Indian automobile industry but this is India and infact the company had to change itself rather than the market. The company recently launched its new car as Figo which was quite similar to the Fusion but priced at 3.5 lakh ex-showroom Delhi which is quite less than the previous one and one can see the difference. The company is selling good volumes of the Figo in the country with reduced prices.
Coming to another automobile major Honda, the company launched its world famous hatch in India as Jazz but the company failed to do any Jazz with the launch in the already very competitive Indian automobile industry. Infact the company overpriced the car so much that the hopes of the customers got shattered hearing that price. Jazz seems to be overpriced by atleast 2 lakh rupees and if the company really wants to do some Jazz with the Jazz then they need to look at its pricing.
Now looking at the FMCG domain, Axe-the Famous HUL brand has recently reduced the price of its deos by 25 rupees and wants to change its fortunes with this price cut in the market where its market share has dropped consistently over the past few quarters. Does this mean that the Deo was overpriced or is this just a marketing gimmick?
So, to conclude I would just say that price the product/service so that people accept it. Don’t fool the customer by overpricing because a lost faith is difficult to regain and one’s loss is other’s gain.
So THINK before pricing!!!!!!
--Sumit Jasoria
I think for the Indian consumer a small car is always a choti gaadi. The car might be from a big brand like Honda or whoever but if it is small in size then they expect to pay a lower price for it . The idea of paying a big amount and getting a choti gaadi is not acceptable to them and that is why the Nano rules. A case of perceptual value I guess. An exception might be the Bettle but then thats another story altogether:)
ReplyDeleteYes. In a developing country like India, Pricing plays a vital role in determining the market share of a product. Unlike Western countries, Indian people are very much concerned about pricing. Therefore, Companies must analyze the market strategy before pricing.
ReplyDeleteI think pricing a product has a major correlation to the socio-economic segmentation and then which particular segment is being planned to be targeted in the market for that product, apart form the competition in that product category of course. For cars perse , in Indian Markets, smaller cars are targeted towards middle class with smaller pockets, hence lower prices are eminent for good market share
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