Madhukar Sabnavis: The missing P-word

Marketers shy away from talking about price as a marketing tactic

Many years ago when a premium brand decided to run a money-off promotion, the agency fought for weeks telling the client that this would hurt the brand. After much to and fro, the marketing director took me aside and said, “I appreciate the agency’s passion for the brand; however, remember we also care for our brand. We have decided to run the promotion so I request we just go ahead and do the campaign rather than give ourselves last-minute ulcers.”

More recently, a client decided to cut his product’s price by 25 per cent. He believed that the only barrier to sales was the product’s price — the product was seen as effective and people trusted and liked the brand. However, when we got down to doing the television commercial, the client was uncomfortable when it came to talking price – he wanted to do “thematic” advertising, that is, talk about the brand and its benefits – and was, at best, willing to flash the reduced price at the end. So I said, “Are we whispering the biggest news instead of announcing it?”

If the role of advertising is ultimately about, as advertising guru David Ogilvy said, “we sell or else”, then why do marketers shy away from presenting price as a proposition? Why is it demeaning to talk price to the consumer even though it is a critical factor while buying a product or service?

The most important “P” often discussed in boardrooms – and I guess in most business meetings – is price. It is the purpose for which brands remain in business since it determines the returns to the business. Yet when it comes to marketing discussions, it is the least discussed subject — left mostly to promotions and, at the most, stock-keeping units announcements. In my experience spanning over two decades, pricing as a communication platform has mostly been tactical, a means to garner quick sales. This is not surprising since the primary role of marketing is to enable consumers to justify the price they are paying through the activities they do. At the same time, the other very important statement made in marketing meetings is that the consumer is always seeking “value” — a euphemism for price perception. This parameter is determined by what the consumer is getting for the money she is forking out. Moreover, as marketing guru Philip Kotler enunciates, pricing is often determined by market and not necessarily by a cost-plus approach and is, therefore, seen as a “P” outside the control of marketers. Finally, the pricing advantage, if it exists for a brand, is mostly left as a pleasant discovery to be made by the consumer at the last mile. In itself, it is not a bad idea. However, the question remains: is pricing a bad word for branding and branding communication?

Necessity is the mother of invention, and in the last two decades, brands have learnt how to communicate price in an interesting manner. Initially, it used to be either just flashes (only rupee so much) or more explicit (now available at a slashed price). In fact, truly low-priced brands – with Nirma leading on this front – actually made attempts to hide their price advantage and left it purely to discovery. The brand’s advertising strategy attempted to disguise the price advantage by selling “glamorous” images for an otherwise “cheap” product in respects other than its price. That was a clever thing to do for the mix at that time. Then came the wave of “value delivery” with the famous “zara sa” campaign by Rin detergent bar to show how much more you could get for the same price. Next, two brands introduced new price idioms. Hutch with its “chota recharge” tapped into the lives of consumers and positioned its low-priced product as an antidote to depleting consumer wallets during a month. It was based on a real consumer insight. The campaign featuring actor Irrfan Khan in the mid-2000s opened a new facet to pricing. And Deccan Airlines, less visibly but more charmingly (and Airtel more visibly but perhaps less charmingly), made the price proposition that anyone could use the category with its offerings. Deccan Airlines celebrated the first-time flyer (in a commercial showing the father of a son who loved airplanes) and Airtel showed how ordinary people also received calls on mobile phones (showing paan wallahs and doodh wallahs in its commercials). Airtel flashed its tariff at the end to complete the loop. Deccan’s pricing was more well known through media coverage so it did not have to strive too hard. But it still made the point that airlines (just as Airtel did for mobile phones) were now accessible to the common man.

The paradox between intent and communication action has its truth in insights beyond marketing principles. Culturally, “cheap is inferior quality” and, therefore, there has been deep hesitation to talk low price for a brand. Brands that have aimed to democratise a category have always felt that they have perhaps traded off some quality to give the consumer a price advantage. This is reflected in the hesitation. Even today, “store brands” are seen with a certain amount of scepticism compared to large advertised brands.

But the world is changing. Categories are getting commoditised, quality is getting democratised and modern trade is becoming the shopping place for, at least, a segment of Indian population. Above all, it is important to realise that brands have built enough equity for themselves in the last two decades. To compete in that space for the share of wallet of the “spending” upper middle-class consumer, pricing can be a brand weapon. However, it has to start with the beginning, with pricing as a strategic tool in the marketing mix. Brands need to think of more interesting ways to price their products, linking them with the consumer’s lifestyle and spending patterns and then making it a “talking” point. Already, prices of cars or computers are no longer in lakhs or ten thousands, thanks to equated monthly installments. Brands also need to find ways to position the price advantage charmingly and endearingly.

There could be many emotional propositions based on a “price advantage”. From smartness to being non-indulgent for the good things in life to just being austere in an otherwise consumerist society are all possible triggers for brands keen to make their price advantage a marketing tool.

Views expressed are personal
madhukar.sabnavis@ogilvy.com