Strategic Brand Management - The Beginner's Guide

Price is an important element from a brand’s point of view for building brand equity. Brands set the price of a product depending on three factors: i) the cost of production, ii) competitor’s pricing strategy, and iii) the consumer’s perception of the value of the product. What is Consumer price perception? Consumer price perception theory states that, consumers already have a predefined price range (a minimum value and a maximum value) for any product category, which is acceptable to them for purchasing a certain product. The consumers tend to correlate the quality of this product with the price of the product in the price band. Where, the price of the product is at the lower end of the price range or price band, the consumer assumes it to be of a lower quality. Whereas, if the price is at the higher end of the price band, he/ she equates it to be of superior quality. Hence you find several companies such as Procter and Gamble, Unilever Ltd., Volkswagen and...