Never underestimate the psychological power of price and packaging.
As I understand it, the chemical composition of most face creams is pretty similar, especially the active ingredients. Exotic “extra” ingredients are added to tell an impressive story, without adding effectiveness.
The difference between an expensive cream and an inexpensive one is the packaging, a brand label, advertising and the price. Yet most women, especially affluent women, will choose a more expensive brand.
Which is better, a $5 lipstick or a $35 lipstick? Both of them might be essentially the same, yet many people will tell you the $35 lipstick is better, simply because of the price.
The price and packaging you choose for your product sends a positioning message.
Some businesses choose to have several different brands that are essentially the same and positioned to appeal to different levels of customers.
For example, General Motors offers Cadillac, Buick and Chevrolet. The chassis and many of the parts of the cars are interchangeable. Some finishing details, such as a more elegant interior, and the price distinguish the brands for different groups of buyers. The cost of manufacturing the cars is nearly the same.
A higher price usually supports a bigger marketing investment than a lower one.
Would you like to discuss how your price is positioning what you offer? Write to me at mgray@profitadvisors.com to schedule an initial conversation.