What advertising to do according to your pricing strategy?

When we talk about the marketing mix and the 4Ps of marketing, product, price, promotion, and distribution are often treated as if they were separate elements. But when it comes to planning your advertising pricing strategy, you can’t forget that the 4 are closely related. So if you want your advertising to make sense, plan it based on your prices.

To simplify, today I am going to explain what the best strategies are for brands that bet on low prices and for “premium” brands that compete in other aspects.

How to Advertise for Low-Price Brands?

Competing on price is a very attractive bet to attract a large number of consumers, but it is not within the reach of all brands. If you want to go with this option, the first thing you need is to be clear about the numbers: your company must be able to keep prices low in the long term without sacrificing profitability. Avoid falling into “price wars” at all costs if they are not part of your overall pricing strategy.

You should also know that, in general, it is not possible to obtain high returns with low prices (it would be too nice, right?). To maximize your company’s profitability with a brand that competes on price, write down these principles:

• Have a low price position from day one. With very few exceptions, all companies competing on price have followed that strategy from the beginning, focusing on producing large volumes at low cost.
• Be focused on a high-growth, high-revenue model. The higher the turnover, the greater the opportunities to create economies of scale that reduce costs at every step of the process.
• Be extremely efficient. In order to have good commercial margins at low prices, it is necessary to be extremely efficient in costs and processes. In particular, you need to reach beneficial agreements with all your suppliers. The supermarket chain Aldi and IKEA furniture stores are very good at this aspect.
• To offer adequate and consistent quality. Competing on prices means giving up on competing on quality… but only to a certain extent. No matter how low your prices are, they won’t be able to hide poor or inconsistent quality. So you need to set minimum thresholds and make sure that absolutely all units manufactured exceed them.
• Focus on key products. Instead of trying to offer endless product lines, focus on what your consumers really demand.

Once you have a profitable and sustainable business model to produce and sell at low prices, it’s time to decide how to approach your advertising strategy. In general, three aspects should be present in all your communications:

• The price. Elementary, dear Watson: if your brand’s strong point is its prices, show them to the world! Take a cue from big, low-cost brands like Ryanair for inspiration to design your advertising.
• A key message. Almost all successful low-priced companies follow a “low prices every day” strategy and show this clearly in their ads, rather than resorting to temporary promotions. Avoid mixing messages so as not to confuse the potential audience.
• Comparisons and guarantees. If your product is the cheapest on the market, be sure to mention this fact in your ads. Some brands have successfully used “if you find it cheaper, we’ll refund the difference” claims. It also doesn’t hurt to assuage customers’ potential fears regarding quality. To do this, you can offer guarantees such as “X day return period” or “if you are not satisfied, we will refund your money”.

Another aspect to consider in advertising strategies for low-priced products is the budget. The principle of maximum effectiveness also applies here: in order to be able to offer the cheapest products on the market, advertising costs have to be as competitive as possible.

Thanks to digital marketing, the cost of entry to advertise your products is much lower than in the days of advertising in the press, radio, and television, so use it to your advantage! By basing all or part of your strategy on social ads, you can keep a close eye on your costs per click and conversion. And if you want to optimize your results, don’t forget that segmentation is key.

How to advertise for premium brands?

You may not be interested in competing on price, but rather in placing yourself on the premium end of the scale and making high-quality, more cost-effective products. In this case, you’ll have to approach your advertising differently.

Quoting Aristotle, that great marketing expert, we could say that to advertise premium products, you can resort to two types of arguments: logos and pathos.

• Logos is rational argumentation, based on the most objective aspects of your products. If the superior quality of your product can be measured and compared, you have a great asset in your favor to use in your ads.
• On the other hand, pathos is the use of emotions to persuade. This is where the values associated with your brand come into play, which you can highlight in your advertising with proposals such as “the car that will make you dream” or “the deodorant of the bad boys”. In this way, you will be able to differentiate your product and associate it with the identity of your target.

And speaking of identity, another key aspect of premium product advertising is segmentation through buyer persona. It’s no longer about appealing to everyone, but only to those who can truly appreciate the added value of your brand.

Finally, the good news for premium brands is that they can afford to spend a higher budget on advertising. You’re sure to find creative ways to invest it, but just in case, here are some ideas:

• Design and launch your app to establish an ongoing relationship with users.
• Create a high-quality content strategy, including professionally finished videos.
• Stand out from the competition by investing in cutting-edge solutions like augmented reality (it works for Pokémon Go!).

I hope this article has been useful to you and makes it easier for you to design your online advertising campaigns according to your pricing strategy.