Manage your price reputation
Brands do NOT need to reduce prices in order to be considered more price competitive.
Consumers’ assessment of a brand’s price competitiveness is not wholly determined by the actual price, but also, by its reputation. Forethought refers to this distortion as ‘price brand.’
The extent of the favourable or unfavourable price brand differs by individual brand. Some brands are benefactors of this distortion, whereas other brands suffer from a poor price brand.
We found evidence of such price brand distortion even for heavy users immediately after buying frequently-purchased goods and services.
Even in cases where price was a headline component of communications, such as bank interest rates or fuel prices, strong price brand effects/distortions were still evident.
All brands – even premium brands – need to manage price perceptions.