Pricing plays an important role in branding. The luxury brands have been the first to "discover" such an interplay, wholesalers cannot be too far behind either.
Consumer markets in developed economies have been facing steady dollar inflation and rise in commodity prices.
From a branding/positioning perspective, the status qvo for companies selling into the US market is being challenged.
US imports come from the following areas:
Consumer markets in developed economies have been facing steady dollar inflation and rise in commodity prices.
From a branding/positioning perspective, the status qvo for companies selling into the US market is being challenged.
US imports come from the following areas:
- China for trinkets--whose currency is pegged to the dollar;
- Europe for upscale products--since the "discovery" of (affluent)consumers in emerging markets they are no longer that dependent on the US consumer;
- Japan for automobiles and electronics--pegged currency;
- Latin America for agricultural products--prices have come up since such products are imported mostly by US brands.
Exporters into the US have several options:
- Pass the increased costs onto the US consumer through higher prices,
- Lower the quality;
- Gimmicks;
- Revive US based manufacturing/assembly plants.
As examples for gimmicks, consider the socks at Wal-Mart that are shorter and sell at the same price. Trash bags at Costco, sold under Kirkland Signature brand, are weaker. Import cars, due to the annual cycle of "innovation" and reduced Detroit competition have been able to play the "segmentation" game to their advantage and passed along cost increases. Moreover, sensing the market share opportunity play, automotive luxury brands are coming in with cars at lower prices.
For a conversation about this, check out the Q&A section at LinkedIn.
For a conversation about this, check out the Q&A section at LinkedIn.
