A product’s price is more than the dollar amount required for purchase. Price contains meanings that influence our perceptions of a brand. For instance, high price typically sends a signal of high quality, while a low price may elicit connotations of value, basic, or even low quality. So, it would seem that if a marketer is going to err on setting an optimal price it would be better to be too high than too low. If you subscribe to that belief, you may want to check out how HTC has destroyed that myth.
HTC is aiming at the high end of the tablet market with the Jetstream, perhaps named because its price is sky high! Jetstream is priced at $700 for a 32GB model, plus it requires a two-year contract with AT&T. The price is comparable to the Apple iPad 2; its Wi-Fi +3G 32GB model retails for $729 on the Apple website. The key for taking market share from the leader is to differentiate- in this case, offer something that the iPad does not have. HTC does not succeed in differentiating on benefits or price. It is a high-end offering in a category that has an entrenched high-end brand.
Unfortunately, the HTC Jetstream fails to position itself for success using price. Its “me too” price at the upper end of the market gives no compelling reason for tablet shoppers to pick it over iPad 2. If HTC intended for its price to position Jetstream as a premium competitor to iPad, it appears to have not worked. Is it just a matter of time before the price drops?
What meanings will customers uncover when they encounter the prices of your products or services? You should never have to apologize for the price you set, but be certain that it represents fair value and is consistent with your brand’s identity.
Fast Company – “Forget That iPad, What’s It Gonna Take To Put You In This $700 HTC Jetstream Tablet?
