Pricing strategy plays a very crucial role in a marketing strategy of a product. Now, the option to choose a pricing strategy can be very challenging but you would need to start by choosing one to understand how your product should enter the market and how you have a high consumption rate.
7 Pricing Strategies for Beauty, Health and Wellness Sector
One size does not fit all so does the pricing. Pricing strategy is different depending on the mode of buying and location with slight variation in prices of their product/service. Due to covid-19, e-commerce is a higher bet now and has a slightly different pricing strategy than retail store pricing. Big beauty brands like L’Oréal, M.A.C, Lakmé and nutrition and fitness brands have an online presence and are running the business through e-commerce retailers or directly through their apps with a combination of pricing strategies. Let us find out these proven and trending ways of pricing in today’s age and time:
Subscription Box/Services – Box of healthy food/supplements or skincare essential products or beauty/cosmetics customised as per consumer needs is delivered at the customer’s doorstep. The subscription is available on a monthly, quarterly and annual membership basis the type of box one subscribes for. Similarly, the subscription services/deals for health and wellness programs go on. Usually, the annual pack/membership will turn out to be the most cost-effective
Competitive– Smart pricing where other payers’ prices are used as the benchmark until a business has an exclusive range
Bundle– A package of related products is sold at a lower price than each of the products separately
Try and Buy – Consumer selects a product and chooses to pay later. Upon product delivery and post-trial, the customer can either keep or return the product ordered online
Psychological – Two items/products with almost similar price i.e. one at INR 499 and another at INR 401 plus INR 99 shipping charges. Online retail sellers use this price strategy to encash even though the overall pricing is the same for both the products
Special Event– E-commerce player link discount to a holiday, festival, season and advertises like Sale of the day etc.
Promotional– Buy1Get1/Buy2get2/Buy3Get3 pricing clubbed with other special discounts forms promotional pricing
Prevailing credit card offers also attract consumers to buy and get additional discounts like loyalty/reward points along with refer & earn promotional programs for boosting sales.
A balanced and sustainable approach to the pricing of a product or service is essential in any scenario either changing market trends or consumer behaviour. Adaptability is critical for Sustainability!
What’s in it for me?
A balanced and sustainable approach for pricing is essential. Low priced products/services may underrate the brand value and keeping the premium pricing may become the reason to lose competitiveness. Hence, strategic pricing will be required.
During lockdown due to coronavirus, many retail businesses/entrepreneurs adapted online retail mode (e-commerce) to bring the product to the consumer as they saw the changing consumer behaviour for purchases through e-commerce sites. It drove the retailers all the more to change their selling pattern and thus the cause had an effect on the pricing strategy as well. Businesses swiftly transformed their approach to mitigate the losses and to sustain. Nykaa is a perfect example of this scenario! After all, Adaptability is critical for Sustainability!
To be a successful Entrepreneur, be cautious of varying trends arising due to any situation, know your competition and watch their offerings but don’t follow them blindly, understand consumer behaviour, make dynamic and adjustable pricing, assess market position correctly, be up to date with the fresh data/numbers and use mind-hacks to win over. Blending strategies from time to time i.e. a combination approach is always better than a single strategy. Additionally, the use of tools/technology for better pricing insights and crafting one for your business shall enhance the sales. And last but not the least, keep loyal customers delighted and customise offers for them as retaining the existing customer base may be more effective than looking out for new ones.