The term affordable is literally thrown out sometimes as a magic wand in the area of marketing. But how is affordable really defined? Provided it is the price, does it end there? What else does it encompass? As an online marketer, grasping at the appropriate definition of affordability will help you to market your products as well as convey the value to the intended customers appropriately. In this particular piece of writing we will define affordability in marketing, its actual meaning in practice and suggest some practical measures to facilitate marketing of your products or services.
What Is Affordable Really?
In its most basic sense, affordability means that a certain product or service is possible, and in most cases, within reach of a consumer. However, costs simply do not measure up to it. It is also about value in terms of quality and how well a product or service meets the customer’s needs and objectives. In such a situation, a customer considers an item affordable, to the extent, he is evaluating costs and benefits. “What are the perceived benefits versus the costs?” They will ask themselves.
The second issue one might encounter is that the term affordability has different meanings to different people. To some, affordable as this will be, will still be unaffordable to some other depending on their financial status and their priorities and raised expectations. This implies that marketers have to do more than just reduce prices to be able to maximize on this affordability perception of their target market.
The Role of Affordability in Marketing
From consumers’ perspectives, affordability is one of the most compelling elements that impact their choices. In an increasingly competitive market where a million options are available, consumers will always seek products whose costs are reasonable and do not require them to compromise too much on quality or features. By stressing the affordability of their products, brand will be able to capture larger portion of the markets and there will be trust and loyalty built.
Nonetheless, if you are projecting your service or product as “affordable” without analyzing this term for your target group in a more detailed manner, you are risking losing potential customers or, what is even worse, creating a lack of trust. For this reason, it is reasonable to consider this factor when developing and implementing PPC/Affordable Media Campaigns.
Three Factors Constituting Affordability in Marketing
As you already know very well how to make your product or service affordable to the prospective easy spenders, always remember you don’t have one sided view. Affordability is synonymous with price only to those outside marketing discipline. There are three basic elements in affordable marketing: price, value and cost. Let’s investigate each of these elements in detail.
Price: The Most Basic Dimensions of Affordability
Out of all the aspects of what is considered affordable, price is the most evident. And for a body of people, this is the very first and in many cases the only factor they think about before making the buying decision. However, just because the prices are cheap does not always means that you have met the correct pricing strategies or approaches. You have to come up with a price which is both appealing to your audience and allow you to make profits out of it.
Example: For budget airlines, one reason is that nothing beats Weber for marketing why it pays to fly on low-cost no service airlines like Southwest or Ryanais – the tickets are expensive but low-cost airlines do away with some of the services that are often standard with higher fare paying carriers. And those passengers who go for these airlines, understand that these are basic qualifications and they will pay for those basic qualifications for they are satisfied by the trade-off that is informed.
Actionable Tip: Establish a range for your product or service taking into account the price range of your competitors, customers’ perceptions, the core offering and its value. Tiered pricing gives you room to meet the needs of a larger market.
Perceived Value: What Customers Think They’re Getting for the Price
The other dimension of affordability modeling is the very basis on which each of the affordability products presented in the outreach service for the purpose of acquiring customers works— perceived value. Price is what sets the stage while perceived value is the factor that actually gets one’s customers to want to make a purchase because they want to get value for their money. It is seen in many instances that people do not mind overpaying if they realize that the offering delivers plenty of value, solves a problem or improves their life in any way.
Example: Apple has been successful in emphasizing perceived value among its consumers. This is because Apple is one of those marketers whose products tend to be more expensive than those of rival firms and are quite troubled by their clientele. People do not only purchase an iPhone, but also the associated lifestyle which includes that brand’s name which appears to be worth the amount.
Actionable Tip: When selling your product, concentrate your marketing messages on the worth of what you offer to the market rather than the figures attached. Emphasize the selling propositions that justify the price. Social proofs in the form of queries, whale cases, and feedback also create a perceived benefit towards potential users by providing practical ways on how your solution can benefit people.
Relative Cost: Comparison of Your Offer with Alternative Solutions
Relative cost tells: what else is on the market and how do your buyer’s products and services contrast to that. There would always be a portion of your market that will likely cost more than what your competitors would offer, but you still can sell your product as inexpensive by simply stating that it is much better than what is offered in the market. People usually mentally balance the price of your product that they are buying with alternatives they can purchase, so it is important how you explain the price you charge against others’ prices.
Actionable Tip: The first and foremost suggestion is to observe how the same services are offered by the competitors including the cost. Make it clear, what is it that makes your product stand out from the rest: higher quality, more functions, extra service, or some other inexpensive unique selling proposition (USP) that other firms will not be able to replicate. On the other hand, people look for such value propositions in marketing – which makes the offer seems so upfront looking.
Article Title: Economic Factors in Marketing How to Use Aspects of Affordability in Your Marketing Strategy
Now that we have discussed the elements that define affordability, the pertinent question becomes how we go about letting the potential clients know it. Following are some effective marketing concepts that will make your product or service appear cheap without rendering it worthless.
Focus on the Benefits and Not the Costs
In most purchasing decisions only the low price is targeted as all other value descriptions are ignored, rather explain what value to the end user will the product add or save how will the product make the customer’s life easier or what will be an exciting adventure regardless of cost. Because of this, customers get the impression that there is more than what they have paid for.
Example: Expounding on the benefits of kitchen panels, it may include saving time, lowering food wastage and cooking good food; describing not just the convenience benefits.
Actionable tip: Addresses the concerns of potential clients in your marketing content; email campaigns, product descriptions, and even social media posts, within which you try to feature or highlight the unique features or benefits that justifies the price. Provide compelling text to capture attention on what value clients are going to be given.
Price Anchoring
Price anchoring refers to a strategic guideline in which your leading product or service is a high price one, with the primary aim being to make your main offer less expensive. This feature typically works to make the customers believe that the offerings are worth purchasing.
Example: If you have three pricing tiers that you want to position, the highest-tier option should usually be positioned first so that the middle-tier will shock the audience as cheaper, but more or just as useful.
Actionable tip: Also customers may appreciate the standard product offer that you have, if only every once in a while, through suggesting additional features or introducing a standard product with such features. This can be achieved by creating additional product packages/cross sales, by adding these features to its basic pricing and so on.
Discount Strategy
People are fond of a good bargain, but it is important to know where to draw the line when it comes to price cuts so as to keep the worth of your product. Scarcity and a sense of urgency that discounts create should be used in well-defined ways.
Example: A huge number of e-commerce companies employ time bound offers or first-time customer discounts to attract customers while pretending to offer customer value.
Actionable Tip: Include time-limited offers, seasonal sales, or loyalty promotions in the advertising campaigns. It is important to be out front and say how much a customer will save and then go on to explain the value customer will derive.
Underpin your Affordability Position with Transparency
A customer is ready to pay for an item if they believe in the company offering that item. It is easier to stick to honest prices if one is open about his/her pricing, the materials or ingredients used, and the production process. This applies even to prices because the more educated clients feel about what they are spending on, the more reasonable the price range will look to them.
Actionable Tip: Add complex descriptors, questions customers might have, and even behind-the-scenes videos showing the value of your product or service. The more we are honest, the more we will be trusted; and this trust will work in favor of affordable pricing.
Conclusion: Affordability Is Something More Than Just Lower Price.
While marketing, affordability is about so many issues other than reducing the prices only. It is treading the fine line of cost versus value against the need to the target market. More forceful marketing messages can also be created by appreciating the factors constituting affordability price, perceived value and relative cost to the consumer. And especially due to the fact that these things will be put across effectively, then the product or service will not just be sold as affordable but as a necessity that is worth every dime spent on it.
FAQ
Low prices promote and equal affordability.
No. Affordability is more than only price. A product could be higher in dollar price but affordable in that it offers great benefits for its users.
What can I do to help my product look cheaper than its value?
Try and concentrate on explaining the worth it focuses on putting out there. Put more stress on the advantages, show clients who have used the product, package the product in such a way that makes it shallow priced or discounted.
Between an inexpensive and affordability, which word can be used to show degree of quality?
Inexpensiveness can be interpreted as low prices but compromise on quality. Affordability means that a product or service is reasonably priced for what is being offered, but it does not mean that the price has to be inexpensive.
Should I even consider giving discounts in order to make my product appealing to the potential customers?
Discounts can be of help but need to be delivered in a guided manner. All that is due! There are pricing strategies that when abused are detrimental to the company’s branding image. Discounting should be melded with a volume-based messaging.
Is it possible to promote a luxury product as low-cost?
Absolutely, provided you position the longer-lasting value or unconventional advantages of it. Owen’s brands, for example, tend to be more affordable than their target consumer perceives due to the image, details, and feelings it provides.
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