“Pricing now has got nothing to do with how good a product or service is, what it does, what it doesn’t do, or where it came from or how many of them there are. Pricing is decided by how much people want something, and the degree to which it is novel and available.” That’s what Mark Di Somma asserts in a recent article on Branding and Strategy Insider’s website.
In Brands and the Balance Between Price and Desire, Mr. Di Somma also goes on to say that commoditization is driven by desirability: when desirability of a product fades, people want it less and, therefore, want to pay less for it. And according to a BrandZ survey, only 7 percent of consumers buy on price alone, down from 20 percent ten years ago. However: a whopping 81 percent of consumers regard brand as an important purchase driver.
Grocers like Whole Foods and The Fresh Market understand and have capitalized on this emerging landscape of desire. Selections such as organically farmed poultry, imported gourmet cheeses, ethnic cuisine, and hard-to-find produce fetch a premium, yet create a cachet not typically found in a traditional supermarket.
You can read the full article here, but we’ll close with one more quote from Mr. Di Somma: “Unless what is being planned, made and told is being planned, made and told as more and more desirable, it must, by deduction, be at risk of becoming less and less valuable.”