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Place & Price Should Play Along
By: Janet Kalandranis
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It seems that everyone assumes a brand equals a certain price. That’s somewhat true. Walmart equals lower prices, Lexus equals a pretty penny for a great car. It’s easy for customers to associate a certain price range for a specific brand — it’s what they know and how they’ve come to interact with the brand. But what if price was specific to place and what customers assumed was a set value could ultimately be changed? Then brands could reach different audiences and ultimately change the perception of overall brand price. It allows brands to potentially sell more products, be more successful, and ultimately be the choice for different sets of customers. But it’s not like price can be changed without some product changes, so maybe there are levels — higher-end product at a high-end store is a more expensive price and then a slight variation to offer a discounted price at a more affordable place. It’s like doubling brand success without changing brand perception.

Starbucks is known for the more expensive coffee and offerings. Customers are aware that their daily cup of coffee or fancy espresso drink at Starbucks won’t be just pocket change. And Starbucks realizes that by having these set prices there is a guarantee that only certain customers will stop in. So there are the regulars at Starbucks that like the product so much they continue to pay and then there are those that drop in for a treat. And Starbucks has accepted this. Actually, the brand likes it this way. It allows them to keep their product specific (no shortcuts) and gives them the opportunity to offer an experience that is much different than a self-serve coffee station. And Starbucks is not budging; the brand is keeping its prices where it wants and counting on brand loyalty to continue its success. In its stores, that is.

But don’t think Starbucks is snobby or unrealistic. Because the brand has other ideas to reach different audiences at prices that make more sense to them. For instance, grocery stores. Starbucks has no problem cutting prices on bags of coffee sold at retail (outside its cafes) so it’s able to offer its product and gain brand users just on their terms and at their own means. This is the idea of price and place, instead of brand and price. Starbucks is letting a specific set of customers know that they are serious about offering them a product they love at a price that works for them in a location that makes sense. It’s all about serving the needs of a customer set that may be different than the original core Starbucks customer. And that’s okay. Because as long as brands love both, offer them what they need, and still make it a “Starbucksy” experience, then all will be happy. And that is how price and place get along.

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About the Author
Janet Kalandranis is here to give you all the little brand thoughts that run through her head with a little dash of spice. Find her online here.
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