Positioning through pricing

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:
  • 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:

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.

"New and Improved"

Consider the recent blow-up at Medtronic, which "[...] estimated that about 2.3 percent of patients with the Fidelis lead, or 4,000 to 5,000 people, would experience a lead fracture within 30 months of implantation. Those patients will require a delicate surgical procedure to replace the lead, experts said.

Replacing leads on a heart device like a defibrillator is considered by experts to be far more dangerous than replacing the device itself.

The Fidelis lead has been used with Medtronic defibrillators since 2004, and most patients who received Medtronic defibrillators since then have them.

Vice President Dick Cheney uses a Medtronic defibrillator, but it was implanted in 2001, before the Fidelis lead was introduced."

I think this is just one illustration of the "new and improved" drive for revenue. Grocery or home improvement shoppers know that stuff keeps "changing" all the time.

For more on the "new and improved" tactic to branding/product positioning, check out the discussion at LinkedIn Q&A.