FT Start-Up Stories Episode 5 - Setting the right price
Nov 23, 2015
Lorne Vary, finance director at Brompton, shares insights on the company's bold pricing strategy, which has seen a 65% price increase without affecting sales. He discusses how market conditions shape these decisions while maintaining quality and brand integrity. Gerard Burke, a marketing expert, emphasizes the importance of pricing as a strategic tool that influences customer perceptions and competitive positioning. Together, they navigate the complexities of pricing in the cycling industry, revealing practical advice for businesses to thrive even in challenging economic climates.
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Avoid Discounting To Protect Brand
- Do avoid discounting your product because it damages brand perception and trains customers to wait for sales.
- Do maintain consistent pricing to give dealers confidence and protect service levels.
Publish Standard Prices Globally
- Do publish standard prices across channels so small dealers and big chains pay the same and service remains viable.
- Do use online configurators and recommended prices to curb distributor overpricing abroad.
Price Reflects Quality Not Hype
- Focus pricing on justified cost and quality rather than on brand aura or artificial premiums.
- Emphasise innovation, quality and rider experience; the brand then follows naturally.
