Because you’re worth it ?

Fiona Drane recently spoke at a 5 Star Self Catering conference at the Old Course in St Andrew’s on the subject of pricing. In order to prepare for the conference we carried out in depth research into the subject of price and it’s direct relation to marketing. And we thought our findings and conclusions would make two interesting and hopefully informative newsletter articles. The first one we want to share with you looks at how you research your price and the second article in next month’s newsletter looks at how you then market your price.

As with any major business decision, the key is to carry out lots of research into the subject before you set your price and look at how you are going to then market your product. When we were looking at the pricing of 5 star self catering we looked at two main areas. Firstly current customer perceptions on price and secondly the competitor market. This approach is one that we carry out when we prepare Marketing Plans for all clients and allows a comprehensive look at the marketplace of the product we are working within.

There are various ways that you can carry out customer perceptions on a subject. For an existing product where a business already has a customer database, we would recommend using a survey tool like Survey Monkey and send out a survey to your customers. This can also be done in paper form instead or as well. Another effective way we find is to use Twitter. Twitter is a great way to ask people what they think of a particular subject and we have used it on a number of occasions and have found the insights we gained valuable to our findings.

So over a period of a week we carried out some research on Twitter. Throughout the week we asked various questions around the issue of price. Most of the answers did not surprise us however some did when we asked what people were willing to spend more on?

With no exceptions everyone who responded said there was one thing they were willing to spend more money on and that was ....................................FOOD! Yes food, not a new kitchen, a car or a holiday but what we need to survive, simply food!

Although we were very aware that we are living in a very price conscious market this made us realise yet again that we are all worried about the basics in our lives which means that if you are selling other products you need to work harder to get people to notice your product and actually buy it. We know we all are aware of this but it does help sometimes to hear it direct from people and realise this is not just media spin. It is reality. These are extremely tough trading conditions.

This research also does fit in with consumer studies which show that people are concentrating on the basics. This however does not mean that people are not spending money but they are spending less, analysing the market place more, looking for quality and giving much more consideration to what they do spend any additional money they have on.

Finally we took a look at the competitor marketplace and looked at every 5 star self-catering property in Scotland. A competitor audit is a very effective way of looking at the marketplace. We find that it is most effective too when you list items that you want to look at. So in this case we looked at ten ways that 5 star self-caterers market their business including looking at price. This gave us a very comprehensive view of the 5 star self-catering market.

So the customer research showed us that we are living in a very price conscious marketplace. It also gave us some valuable insight into what customer’s expect from 5 star self-catering. This then allowed us to look at whether 5 star self caterers are aware of these expectations and promoting them in their marketing. Finally we looked at the competitive marketplace with a comprehensive competitor audit.

This research was essential in giving us a greater knowledge not just of the product but also of the customer. This then allowed us to move on to the next stage of the process which we will discuss next month - How you set your price using this market knowledge and then promote your business accordingly.

As the burning question is How can you get customers to buy your product in a price conscious market place?
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