Why Pricing Strategy and Integrated Marketing Communication Must Work Together in the Digital Era

Pricing strategy and integrated marketing communication should not be considered as two independent business decisions. Today, in the digital age, customers encounter a brand at websites, social media, ads, marketplaces, emails, reviews, sales talks and during physical interactions. Concurrently, price is always on display and readily accessible. This is because price is not just a factor which influences revenue. It conveys quality, positioning, credibility and value.

If the price and the communication are sending conflicting signals, consumers may lose faith in the company. Together, businesses can achieve greater perceived value, positioning, and a consistent customer experience.

This relationship has become crucial for organizations and MSMEs that want to take on the competition in overcrowded markets.

Price Is More Than a Number

Businesses tend to have a pricing strategy that is mostly financial.

They consider costs, margins, competition, and anticipated demand. All of these can be a factor, but price isn't a customer experience.

They interpret it.

An expensive cost can imply quality, rarity or proficiency. A low price may communicate affordability, accessibility or efficiency. However, frequent discounts can create a sense of the brand being cheap, which can affect their perception.

That's why price and branding go hand-in-hand.

Using frequent discounts can lead to customer confusion when a company claims to be a premium brand. But if a firm costs a lot more than its competitors and does not communicate to customers the added value they are gaining from that offer, then customers may be in doubt about the pricing, not the positioning.

Communication is key to a strong pricing strategy.

What Integrated Marketing Communication Really Means

Integrated Marketing communication (IMC): It is the synchronization of messages at various touch points of stakeholders.

It's not just to push the same ad across all platforms.

It is to provide a consistent awareness to customers of:

·         Who the brand is.

·         What it offers.

·         Why it matters.

·         What is unique about it.

The standards that the customer should presume.

This is especially critical in the digital world, where customers are able to zoom from one channel to the other.

A person could initially find a business on Instagram, then check prices on a website, look at Google reviews, watch a video and perhaps ask a question on WhatsApp and lastly place an order from an online store.

When each channel is making a different promise, customers get a disjointed experience.

This inconsistency can be minimized with a strong IMC program.

Pricing and Communication Shape Perceived Value Together

Price is not the only factor in customers' minds.

They evaluate prices based on the value they think they can get.

It's the value that the customer senses.

If customers are not aware of the differences between one product and another then a product at £100 can seem very expensive.

The same £100 can seem reasonable when the business provides superior quality, expertise, convenience, reliability, service or a unique experience for its customers.

Therefore:

The three elements of price, message, and experience make up the perceived value.

This is why the organizations should not ask just:

How do we set our prices?

They ought also to question:

What does this price portray and do our marketing messages reinforce this portrayal?

This establishes a higher linkage between Pricing Strategy and Communication Strategy.

Digital Markets Make Inconsistency Easier to Notice

Pricing transparency has risen in the digital age.

Customers are able to compare products, service and competitors in minutes.

They can also view promotions, reviews and customer feedback that happened in the past.

This means opportunities, but it also means that it's easier to spot inconsistent positioning.

A business might lead off one marketing campaign with a message of high quality and customization, but spend nearly all of the other campaign on low price on its website.

A company might post about how affordable it is to buy their products on social, but establish their checkout process to be complicated and costly.

Such inconsistencies have an impact on trust.

Consequently, businesses need to get aligned with digital marketing:

the promise, the price and the experience.

When these elements complement each other, customers will have an even better justification for picking the brand.

Discounting Can Help Sales but Damage Positioning

Discounts are a good marketing tool.

They can be used for product launches, seasonal marketing campaigns, inventory management, and customer acquisition.

The issue arises when discounting becomes the brand's focal point.

To those who are repeatedly seeing:

·         20% off.

·         One is free with the purchase of one.

·         Limited-time discount.

·         Special price.

·         Another special price.

They can start looking for the next promotion when they aren't buying the regular price.

This can erode credibility of the prices over time.

The better way to do it is to explain the value of the product, instead of the temporary lower price.

Businesses need to safeguard the distinction between:

creating value and reducing price. The two are different. Creating value strengthens the customer’s perception of the offer, while reducing price simply lowers what the customer pays.

Premium Pricing Requires Premium Communication

There are occasions when higher prices will work, as long as customers are aware of the rationale behind the price increase.

The premium positioning can be backed by better materials, know-how, ease of use, customer service, innovation, reputation or exclusivity.

Those benefits need to be conveyed in a straightforward way.

It may be a quality product for a high price, but poor communication can make it seem like it's too costly.

A high price that is backed up by good positioning can seem believable.

That's why it is important for companies implementing a premium pricing strategy to make sure that all elements around the offer convey the same message.

Perceived value is the impact that your website design, sales communication, packaging, content quality, service standards and customer reviews have.

The price tells something.

The whole brand should reinforce the message conveyed.

Customer Experience Must Support the Price

Marketing communication can set expectations, but the customer experience is what will turn them into reality.

Suppose that a company is promising you high quality service.

The look of its adverts is professional.

Its price is high.

However, the customers have poor response time, lack of information and inconsistent delivery.

In fact, the problem is no longer just an operational issue.

A positioning problem.

The price and the touted message have resulted in a customer expectation that the customer experience can't meet.

Therefore, good pricing strategy and integrated marketing communication should be related to operation.

No business can guarantee more value than it can actually provide.

The Role of Data in Pricing and Communication

Businesses now have access to more information about customers than ever before via digital platforms.

Organizations can analyses:

·         Customer behavior.

·         Conversion rates.

·         Campaign performance.

·         Price sensitivity.

·         Repeat purchases.

·         Abandoned carts.

·         Customer feedback.

·         Channel performance.

·         Turning information into coordinated decisions is critical.

Don't optimize messages in your marketing team while pricing team is doing its work separately.

The information should enable both teams to see what customers are interested in and how they react to various offers.

For instance, if customers regularly select a more expensive package that provides more rapid support, then the business has discovered something valuable regarding customer value.

That understanding can impact both pricing and communication going forward.

Why is it important for MSMEs?

For MSMEs, it is particularly crucial to ensure there is alignment between pricing and communication, given limited resources.

If you have a smaller business, you may not be able to improve weak positioning by splashing your ads all over social media.

It should have a clear message, from the start.

MSMEs should understand:

Who their top paying customers are.

What those customers care about.

What is the unique thing about the business.

What value represents that price?

How this value is to be conveyed.

Even a modest marketing budget can be more effective if these decisions are made in sync.

The business is competitive based on clarity, not volume.

Pricing Should Reflect Positioning

The pricing should be a part of the sense of the company's market position.

Business cannot realistically communicate:

·         Premium quality

·         Personalized service

·         Specialist expertise

·         Outstanding customer service.

·         Having only the lowest price as their sole basis of competition.

Similarly, a value-based brand must not end up with something that's too complicated for people to feel like they're getting a good deal.

Well-positioned leads to expectations.

They are assisted by good pricing.

They can be understood through good communication.

Competitive Advantage Comes from Alignment

Product, technology or cost is often associated with competitive advantage.

With a proper alignment, however, it can become an asset.

When a business is clear about what it stands for, the price is appropriate for that position, and the experience it provides upholds that promise, then there's more clarity for customers.

That clarity can be reinforced:

·         Trust

·         Brand recognition

·         Customer loyalty

·         Conversion

·         Long-term value

When there's a lot of competition, customers tend to pick out the company they know best.

A Practical Strategic Framework.

Five interrelated questions for businesses when considering pricing and communication:

Positioning: What should customers think of our brand?

What is the benefit of this?

Price: Is our price value and market positioning?

Communication: Is our offer clearly communicated as to why it is worth the price?

Experience: Is the customer getting what we said they would get for the price we quoted?

The whole strategy is weaker if one element doesn't fit.

Pricing in the Digital Age

Pricing can't be neglected during digital transformation.

It makes it more obvious what the cost of a product is.

It's easy for customers to compare alternatives, but it doesn't mean that the lowest price gets the home.

Trust, convenience, quality, speed, expertise, reliability and experience continue to be paid for by customers.

The problem for business is that they need to make certain they communicate these sources of value clearly.

When all the companies are the same, competition becomes deadly.

When the choice is between two similar products, differentiation provides a second rationale for choosing.

Frequently Asked Questions

How is pricing strategy related to integrated marketing communication?

Integrated marketing communication (IMC) is about informing customers about the value captured by the pricing strategy of a business. If both are aligned, price, positioning and brand messages reinforce each other.

Why price is regarded as a Marcom?

Prices are a message to customers. The higher the price, the more premium it might be or the more skilled they might be, and a lower price might indicate that it is more affordable. Therefore, price information is given about the brand.

What is Integrated Marketing Communication?

Integrated marketing communication is the synchronizing of messages in the web, on social media, in advertising, via e-mail, on sales calls and in any other contact points with the customer to ensure that the brand is communicating the same message.

What impact does the price have on the consumer value?

When customers compare the benefits, they anticipate getting with what they're asked to pay, they are looking at the price. Effective communication can enable customers to comprehend quality, convenience, expertise or other advantages that enable the price.

Is continuous discounting harmful for a brand?

If customers start identifying the brand primarily with a discount, then they can. Over discounting can lead to the expectation of promotions and can impact the credibility of regular prices.

Why Pricing is crucial for MSMEs?

Advertising scale is often not available for MSMEs due to limited resources. It makes them more efficient in communicating value and targeting the right people, with clear pricing and positioning.

What is value-based pricing?

Value-based pricing is one type of pricing that determines prices mainly according to the perceived value of the offer to the customer and not only on the price of comparable offers by other competitors or on the production cost.

How can businesses align pricing and branding?

To ensure that the price of their product/services, brand positioning, marketing messages, customer experience and service quality reflect the same level of value.

What impact does digital marketing have on pricing?

Price and competitor comparison is easier with digital channels. This means that businesses must further differentiate themselves and communicate why their offer is of value to its consumers apart from the price.

Which factors should businesses consider prior to changing the price?

Businesses should consider customer value, market positioning, competitors, cost, margin, customer demand patterns and how the new price will be communicated through all customer touchpoints prior to price changes.

Conclusion

Pricing strategy and IMC should be a single strategic system.

Pricing communicates value.

Marketing communication is the solution to the question of what value.

The positioning of a brand generates expectations.

If those expectations proved to be warranted, then you have a great customer experience.

If these elements are not connected, customers will get mixed messages.

Combined, companies can establish greater perceived value, more definitive positioning and more competitive advantage.

What is the most useful question for business leaders is, rather:

How can we set a price for our services?”

It is:

What is the message in our pricing and is the same message heard at every touch point with our customers?

In the digital age, that alignment can be the difference between having a direct price competition challenge and creating a customer-understood, customer-trusted and customer-chosen brand.

To learn more about business strategies, strategic marketing, MSME growth, branding, customer value and digital transformation, visit https://dramenasibghatullah.com/.