Friday, July 27, 2007

Higher Prices Don't Mean Lower Sales

I read an online article this week about Karen Wilson (a Canadian designer) who made a strategic decision to charge a premuim for her products (purses). She believed that in the long run she would not be able compete with foreign-made products and knock-offs so she deliberately priced her pocketbooks at a premium level.

Many retailers would consider this to be a suicidal approach but I respect her decision. She was also clever in HOW she executed her plan. Retailers who sell her products were skeptical about her pricing so she offered area rights and gave each retailer the exclusive right to sell her products within their local trading area.

Her strategy seems to be paying off. She has a growing list of retailers and is currently expanding her product line to keep up with the demand.

Remember, price is not the only influencing factor in a person's buying decision. If you provide true value and can effectively position that value, price becomes less of a factor. However, when everything is equal, price becomes the default factor.

Take a lesson from Karen's approach and think of how you can change your results.

**Read the entire on-line article here.

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