I'm a bag designer bent on making a dent in the fashion industry. I've worked on my bags' designs diligently and even studied trends abroad. The materials are all durable, but I think they're still pale in comparison to what designer brands produce.
I don't know how to price my goods fairly. Do I set the price based on workmanship, material, or something else entirely? My designs are all original, will that justify a premium price point?
Hope you can help me out.
In the world of marketing, a product's ‘sellability’ is not solely measured on the amount of labor or material used (although that serves as your starting point). Part of what people pay for has to do with something more conceptual. They pay for the name, the packaging, the way it is marketed. There are a lot of names but it basically boils down to one thing: perceptive value.
A brand is called a brand for a reason. Beyond the product or service, it's the perceptive value that determines the worth of what is being sold. Building on that view point, here are a few pointers:
Say it. When weak channels cause value mismatch.
When distribution and marketing channels are weak, value is not justified. You have to communicate your worth. If not, what you get is a perception gap that renders the whole brand message obsolete.
In simpler terms, imagine yourself selling a random ornament. It's shiny, it looks expensive, but selling it based only on its luster or other defining characteristics is not nearly as impactful as saying it was handcrafted using techniques that originated from metalsmiths of feudal Japan. Say it's from Lourdes and watch people's perception jump from a cheap thrift shop find to a keepsake with its own social symbolic value. See the whole picture? That's how perceptive value works.
Not that you need to fabricate, mind you, you only have to sell in a way that markets your brand's story, its authenticity, its provenance.
There are cases where social status gets affixed. A cup of coffee in a restaurant celebrities seem to frequent can be more expensive than a cup of coffee a local diner serves. Starbucks has its retail experience, its branding, its history. There is also what you call a personal identity value, which goes for people who wear Nike, for example: what you have are your sneakerhead subculture (for the youth) and your more aspirational target, those who associate footwear with sportsmanship and athleticism, like in professional basketball.
To these people, you're providing a product or a service with a worth that far outweighs its purpose. Value perception affixes for them a kind of symbolic value they associate with their personal identity.
Prove it. When revenue models result in a perception gap.
Always remember: your value architecture and revenue model has to fulfill and satisfy your proposition. It must be clear to your audience why you should get their money and why they get their money's worth. Perception and proposition are lovers you have to marry.
Fortifying your marketing spend is practically pointless when your business model is rickety and not sturdy enough to support your proposition. Like in fashion; why do you think designer brands flourish? Fact is, very few people understand fashion the way designers built it to be. Underneath the glamour are layers upon layers of social and intellectual facets in play. That's what separates your Chanel from your run-of-the-mill ukay stand. There are design sensibilities, there's taste, functional considerations.
In the case of clothing brand Zara: how much of it do you think is the price of workmanship and design, and how much of it is brand? If you took the brand off of it and put it in a no name store, would its price be justified? Credibility plays a huge role, yes, but it only confirms that how people see you and how they think you fit in the whole landscape dictate how your pricing should be set. And no, value generation is not a one-way process. It is a cycle, a give and take wherein you, as a brand, must prove, continuously, if not, relentlessly, the reason for the worth of your goods. Back it up and deliver.
Love it. Brand value from an internal perspective.
For the last pointer, let me tell you the first step to value generation: honoring your own brand. Think of Wagyu beef as an example. Japanese Wagyu is now considered the most expensive beef in the world. But you see, a hundred years ago, the Japanese weren't even eating beef. It's the Europeans who taught them that. Although they had cows, in the past, their purpose was to only pull carts.
In fact, the whole marbling phenomenon that's being celebrated today exists because that particular fat gives more energy to the cows' muscles so it can work longer. When the Japanese started eating beef, they took this work cow and turned it into the most revered beef in the whole world. This dynamic stemmed from the fact that they honored their own culture, their traditions.
The secret to generation of value is honoring what you have. If you can't honor it, nobody will appreciate it. Look at it this way, if I took an authentic handmade kimono from Japan and asked you to hazard a guess as to how much it would cost, as compared to, say, a ceremonial robe handwoven by the T'boli, you'd probably say our T'boli wins by a mile in terms of pricing.
That's because we patronize our own brand. We honor our own tradition so it's worth more. Ask a Japanese and he'd probably answer in favor of the kimono because, well, he's Japanese. That's the marvel in value generation. You play to your audience's beliefs, their perceptions.
When you say your brand's worth, prove it, and honor it without a morsel of doubt, you're telling the world that it certainly is worth something. Its worth is based on where the perceptive value is built upon.
All the best,
About the columnist
Amor Maclang leads GeiserMaclang, an internationally awarded full-service marketing communications company that steers leading names in a diverse field of industries. For more information and to post her a message, visit Geiser Maclang Network’s online directory listing here.