Issue link: http://psai.uberflip.com/i/870386
W EEKLY EDITION SEPT 6, 2017 Improving Your Pricing Strategy ...continued Based on an article by Nigel Hollis and adapted for the PSAI 2. How different does your company need to be? The answer to this question depends on the nature of your competitive field, the product category, and context. In our industry, it may be hard for the average decision maker to tell the difference between one company's portable restrooms and the next. Assuming both companies have equipment in comparable condition and both do a decent job of service, even you may have a hard time ju stifying a price difference to a skeptical customer. This doesn't mean, however, that you can't find a way to create a perception of difference that is worth paying for. Consid er the beer industry. Research shows that most mainstream beer drinkers, no matter how brand loyal, cannot actually tell the difference between their "favorite" brew and another in a blind taste test. Because of this, tone of voice and creative advertising may be enough to build the perception that a brand is worth paying more for. For instance, the Mexican beer Dos Equis decided to stand out from the crowd in the U.S. by employing amusing and aspirational communications using ads featuring The Most Interes ting Man in the World (MIM),"a storied combination of James Bond and Ernest Hemingway." Check out an example here . The MIM campaign differentiated itself from typical beer communication, which relied on juvenile humor and girls. Perceptions that the brand was worth paying more for rose, and Dos Equis achieved double - digit growth year - over - year in all five years of th e campaign, becoming the fastest - growing brand among imported beers. This occurred in spite of the fact that most beer drinkers really can't tell the difference when labels are removed. 3. How can you best create the feeling of difference? When thinking abo ut how your company is different than your competitors, it is tempting to think only of tangible, product - or service - based uniquenesses. That type of advantage, while powerful, is often short - lived. The challenge is to sustain the feeling of difference, a nd there are lots of ways to do it that reach beyond the usual points related to your units or service. • Build perceptions of product superiority. Innovation, the type that produces a step change in perceived performance or service, is still the most eff ective way to build competitive advantage. Tide Pods and Singapore Airlines are good examples of brands that have used product innovation to improve premium perceptions and justify prices. P&G's commitment to innovation paid off in the U.S. with the introd uction of Tide Pods — a three - in - one liquid tablet that allowed the new product to gain market share at a significant price premium. To stave off competition from budget carriers, Singapore Airlines is investing $16 million into upgrading its airport lounges to improve customer experience and has chosen BMW to redesign its cabins. In the portable sanitation industry, you can do something similar if you think of pain points for your customers and solve them. Toilet paper runs out midway through the week? Custo mer needs access to you 24/7? Provide an answer your competitors don't and you can position your company as superior even if their units are a little nicer or newer than yours. PAGE 3 CONTINUE D ON PAGE 4