There are multiple pricing algorithms and approaches out there which provide optimum prices based on elasticities, and strategies for price positioning. One key element that often is overlooked is the power of the brand. How much would a customer be willing to pay more on account of the brand value? Considering the digital channels that a customer has access to, this information could be harnessed at a very granular level and be factored in the optimization models to manage the outcomes.
The old school “word of mouth” has now manifested into multiple streams of the digital media. The customer not only has a point of view on a brand but also has the ability to influence others using the digital media. In wake of this, how does a brand influence its position to make more money?
There are numerous digital media forums which can be utilized by the customer to express their opinions of the product they have purchased. Different digital media properties have different functionalities to let the customer express themselves. Some of the more interesting properties have an ability to proliferate these opinions to an even wider audience thus making the opinion available to non-subscribed individuals albeit indirectly.
In wake of such complex systems, factoring the customer’s perceived brand value could be viewed as a challenge when computing product pricing. Thus, building a model around this would be a fairly complex task. Implementation and validation could also become complex and possibly dis-incentivize enough to not even begin the exercise.
In order to make the model simplistic, yet actionable, Blueocean Market Intelligence restricts the digital media platforms to those which are most helpful to understand and classify customer sentiment. Once we have done this, consequent steps include factoring sentiments in the analytical model to compute prices and validating results by revisiting the sentiments both quantitatively and qualitatively after the new price implementation.
In some of the models we have run using live datasets for our client, price realization improved, proving the fact that brand value has definitive influence on price and could be monetized.
Learn more in Blueocean Market Intelligence’s exclusive webinar in partnership with SCIP, “Leveraging the Power of the Brand for Pricing Using Digital Data”.