When you have a line of merchandise out there, you will wonder how to price it. What is the best price? Should you price it high or low? The concept of price to brand perception is very important and you should use to price your item so that consumers will value your product and will pay the price that you set for it. Consumers think the way that you tell them to think. If you charge way too low, they think something is wrong with your merchandise. If you charge it way too high, they will think that it’s something very valuable.
However, some people will be able to afford it and some won’t be able to afford it at all. The idea is that if you price it way too low, and consumers get use to it, they will never pay it if you increased the price dramatically. They will think that it’s not worth the price. So the way that you train them to think is very important and you should start out just right. This mean, you should never price anything too low because you can’t bring it up when you want too. It’s better to start high and then lower it if you feel like that’s what you need to do.
If you have a line of merchandise, it’s better to start it out high and then continue it that way since you will gain more profit but you will be able to stay in business. People will think that your merchandise is worth that much. If you bring it down, they will think that it’s that low and they won’t pay for it when you raise the price. So it’s perception that will help or hurt your business. It’s kind of like Martha Stewart line of merchandise. She had some line in K-mart and then she was never able to bring the price up again after it appeared in K-mart because people didn’t think that it was worth anything.