It’s My Company and I’ll Charge What I Want To
“Clearly Nike needs no tutorship in selling athletic gear; the company made $20.9 billion last year.”
But, finding the right pricing strategy can seem elusive for any business. Inevitably, you will encounter mixed reviews from consumers who may argue, “You’re priced too high? That price isn’t worth the investment?”
Pricing is one of the most challenging dilemmas any company will face. Testing price sensitivity in market is no easy feat – just ask Nike.
A wide array of variables impact pricing decisions and further market acceptance. This is why it is essential for entrepreneurs and marketers to know, with laser-focused precision, who their customer base is and why they buy your brand. You may find that your brand appeals to multiple audience segments. If so, prioritize accordingly.
Spark conversations with your actual customers early and often, and qualify market perceptions. Most importantly, before you set prices, use qualitative and quantitative research to validate your pricing strategy.
When in doubt – test.
Should Small Businesses Yield to Pricing Criticism?
Many arguments surrounding the pricing of Nike’s LeBron X product line are tied to the perceived insensitivity of Nike releasing a premium product in a challenging economic environment.
If this is a logical argument, then every company in America could be deemed “insensitive.” In fact, possibly all prestige products should be pulled from the market completely?
Not quite.
Is it socially “irresponsible” to launch a product line with varied price points, including value-based and premium-placed products? No.
Should we blame (or persecute) a company for misaligned financial decisions made at a household level?
No, again.
Instead of penalizing for-profit businesses for producing, distributing and marketing premium products, it would benefit us (as consumers and entrepreneurs) to address the root of the issue: financial education.
As a consumer, I take responsibility for my own actions.
In layman’s terms, you should not buy what you cannot afford and then blame the company who sold it to you. It’s a bit insensitive, don’t you think?
The New LeBron X shoes will hit stores in the Fall.
What would you do, if you were in Nike’s position? Is their prestige pricing strategy insensitive, given current economic conditions? Let me know in the comments section below.
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Photo Credit: Nike
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