This price at all costs… but at what price?
At the beginning of this week, I was in the mood to slash my humor with the documentary The True Cost. Having made some noise when it was released on Netflix, I had to trade my time dedicated to my favorite series for 1h32 of an alarming reality thrown in my face (denial being in the foreground until that moment, you get the picture). I will only relate here one part of this documentary: the one talking about the price, in its globality and its dark side (but not only!).
Knowledge feeds our intelligence and a objective overview on the world.
The aim of this step is to deliberately channel our energy on contemporary problems (but whose state of being is not from yesterday) and no longer on our self-centered recreations which feed a dangerous ignorance (regarding the last one, let’s put the ego aside and admit it. After all we are (only) humans full of flaws…).
Do we take the big leap together?
Let’s go.
Marketing on its own influence.
Let’s face it, the price is the materialization of capitalism (we’ve already talked about it here dear if you want to catch up). Although there is no more immaterial than a figure on a bank account that can be accessed virtually via an interposed screen.
So let’s dig deeper.
1) A remade of 4Ps.
The price is part of this barbaric marketing strategy, lovely named: the Marketing Mix, or the 4Ps (I’ve been told at the headset that a fifth P is a subject of debate). In a very academic way (not too long, I promise), we find Product, Place, Price (ah!), Promotion (Communication) and the last one that gets its place but not too much: People.
However, the last one becomes essential in any marketing strategy because it is the essence of empathy, the one that allows us to put ourselves in our client’s shoes and ask ourselves the right (real) questions to understand them. Let’s add another angle of attack: those terms can be linked in order to the 4C’s: Customer, Convenience, Cost & Communication. And the “people” part will concern each of these parts upstream.
2) Setting up a fair price thanks to marketing strategies.
Let’s dig a little bit deeper into the subject of price in marketing in a technical way because otherwise, I’ll feel quite like an impostor. To give you an idea of the existing pricing strategies, we find the skimming strategy which is very present in the luxury sector by its very premium prices. Roughly speaking, we target a niche of consumers by segmenting them according to their purchasing power (#WealthyPeopleFirst).
Conversely, we talk about a penetration strategy when the proposed price is considerably low in order to reach the global audience (i.e. people, dudes, blokes, lads… Ok I stop). We set out to conquer market shares in order to generate substantial margins based on the principle of economies of scale. In other words, to create margin thanks to a substantial sales volume.
On the plagiarism side (or I-don’t-have-a-personality, welcome), we think about the alignment strategy that implements a price similar to those of your competitors' #benchmark.
The (sneaky) role of neuroscience in the pricing strategy.
As we have understood, price plays a major function in marketing strategies because it is consequently part of capitalism’s economy. It goes without saying that our eyes are used to quickly see a price once the product has aroused the suspicion of interest.
This influence (aka hidden manipulation) is studied a lot in marketing, in particular in the field of Neurosciences. Welcome neuromarketing (another lovely article on the subject).
We can therefore understand neuromarketing as a soft mix between consumer behavior, brain and cognitive activity.
Let’s focus on pricing because it is the subject that interests us today #digression. It can be found in the main “principles” (non-exhaustive list) of neuromarketing. You understood it, the “[…].99” at the end of the price is not irrelevant. Believe it or not, there is an emotional commitment regarding the decision making of our (future-ex) consumer.
The price must be fair in the consumer’s mind; we judge if this purchase is appropriate enough regarding the quality, the quantity for the price proposed. But how can a fair price be set by mixing subjectivity from the consumer’s mind and objectivity from the brand’s point of view?
We block on ethics.
This dilemma leads us to think that the right price is simply a utopia. When subjectivity comes in the playground, it is complicated to consolidate everyone on a standard.
All the more so since behind a price, there is a product, and behind that product, a qualified workforce.
Let’s go back to our documentary The True Cost. There are many comments and filmed proofs showing this workforce is mistreated by our international companies. Behind a price coming from the high-end sector, there is a cost, and it’s a worker’s salary of only less than 4€ per day. These so-called indirect costs are being given up in favor of increasingly greedy margins.
Let’s make an effort and remember that this work is what this forgotten workforce does every day for the price we see in shops. Although the lure of buying ever-cheaper for our personal comfort is tempting (I’m working hard on changing it, not that easy), let’s re-establish the link with ethics in our buying habits.
The price leads us to forget this ethic by attributing more value to the economy than to the human being.
This tendency is moreover alarming in these times of health crisis #CapitalismFirst. It’s not in my idea to take sides in this polemic #coward, but simply, let’s act in such a way that the big companies in Fast Fashion (the sector that is mainly studied in the documentary) do not get as rich as they should, and especially thanks to fake benevolent and warm communications #Greenwashing.
The price is locked in the marketing’s prism in a capitalist environment, and this is the context we are facing today. We can play this game for earning (or saving) more money, that’s right, we also have to eat at the end of the month (drama first), the point is to finally take on this bias (the idea of transparency, honesty, modesty, being in line with our chakras…). But if we could (re)connect to the chakras of the hard workers behind all those prizes blooming in our day-to-day lives, it would be better. In other words, let’s keep in mind that…
Behind an enticing price, many people pay the price.
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