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28 May 2002

Differential Pricing is about Consumer Perception

Differential pricing is all about consumer perception. This is one of the main conclusions in speech by Martin Payne of Through the Loop at the Marketing Week conference on New Pricing Strategies for Generating Greater Profit Margins in London today.

In a wide-ranging analysis of the issue of differential pricing, Martin argues that it is well accepted by the consumer in areas such as utilities and transport peak-time and off-peak pricing. However, he noted that while off-peak pricing for railway travel, for example, may be used to increase off-peak utilisation, it not only penalises "loyal" consumers but also discourages the use of public transport for traveling to work.

One of the key issues is transparency of pricing and it has become increasingly difficult for marketers to charge varying prices for what be seen as the same product or service. There are a number of factors that have contributed to this including the impact of extensive press coverage of "rip-off" Britain. 

Martin provided three potential scenarios for the way in which differential pricing could be applied in the future. These reflect the changing nature of the consumer/marketer relationship and the availability of new tools that can help to implement marketing strategies on an individual customer basis.

Nevertheless, consumer communication is at the heart of a successful differential pricing strategy with the marketer able to communicate clear consumer benefits of such as strategy. 

A copy of the presentation is able for download in the Knowledge area of the Through the Loop Web site.

Through the Loop Consulting Limited is an independent research-based marketing consultancy. Through the Loop analyses key marketing and branding issues that affect companies today in a chaotic business environment.

ENDS

For further information, please contact: Through the Loop Consulting Ltd. Tel: 020 8334 6300/Fax: 020 8940 1447

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