Is 80 yuan the Right Price?
In the globalized economy, the chances of a product reaching consumers all over the world are extremely high. But this does not mean that the product can be marketed in the same way. Localizing the product for each individual market is extremely important and so is product pricing.
The culture of the country and knowledge of this culture on the part of marketers should determine the product’s pricing strategy. An example of insight into a specific culture is the value placed on local goods in different countries. In North America and a growing number of European countries, locally manufactured products are becoming increasingly popular and as such, priced at a premium compared to imported goods. This is not the case for consumer goods in China. Chinese consumers privilege North American brands, and are ready to pay premium prices on imported goods. Another example of this is regional pricing. A natural ingredient based pharmaceutical was launched in both Mexico and Brazil but had very different outcomes. Consumers in Mexico were willing to pay the premium price as they valued the natural ingredients, but Brazil did not see the importance, resulting in lower sales. So even though Mexico and Brazil are both Latin American countries, there are still regional cultural differences that need to be taken into account when forecasting sales.
It is also important to consider the cultural traditions of a country to understand what pricing to attribute to a product. When thinking about the price to give a Chinese product, the significance of certain numbers in Chinese culture needs to be taken into account. Eight is considered a lucky number, bringing good fortune, whereas the number four is associated with bad luck. The value Chinese consumers attribute to numbers should enter into the equation to avoid negative perception of a product on account of the price.
For more information on pricing, see Paul Hunt’s article in the ‘Financial Post’ – http://business.financialpost.com/2012/03/08/pricing-for-cultural-differences/