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Marketing Canvas - Pricing
Discover how to effectively leverage the PRICING dimension in your Marketing Canvas strategy. This guide simplifies this complex topic, providing examples, tips, and a step-by-step approach to enhance your marketing success.
Last update: 24/11/2024
In a nutshell
The Pricing sub-dimension in the Marketing Canvas examines how your pricing strategy supports your value proposition, aligns with customer expectations, and reflects your brand positioning. Pricing is not merely a financial decision but a strategic tool that communicates value, differentiates your offering, and influences customer behavior toward sustainable choices.
For instance, a brand like Green Clean might emphasize pricing transparency and offer incentives for sustainable behaviors, such as discounts on refillable products, to align with its eco-friendly mission and customer expectations.
Introduction
The Pricing sub-dimension in the Marketing Canvas is critical to ensuring your value proposition is both competitive and aligned with your brand’s goals. A well-designed pricing strategy balances customer Willingness To Pay (WTP), perceived value, and cost structure while promoting sustainability. It ensures your offering creates more value than its cost and encourages customers to engage with your brand’s most impactful and sustainable options.
Pricing also reinforces brand positioning by reflecting the quality, exclusivity, or accessibility of your product or service.
What is pricing?
Pricing is the monetary expression of your value proposition, reflecting the worth of your product or service to customers. A strong pricing strategy:
Communicates Value: Ensures that customers perceive the benefits of your offering as exceeding its cost.
Reflects Willingness To Pay: Aligns with what customers are willing to pay for solving their problems.
Covers Costs: Accounts for the full costs associated with delivering your value proposition.
Supports Positioning: Aligns with your brand’s image and goals in the category.
Promotes Sustainability: Incentivizes customers to choose sustainable options.
For example, Green Clean might set a premium price for its eco-friendly cleaning solutions to reflect their unique value while offering subscription discounts for refills to encourage long-term sustainable behaviors.
Pricing: an in-depth perspective
PRICING is a pivotal element of your marketing strategy that requires meticulous analysis due to its complexity and profound impact on value creation. In the Marketing Canvas Method, PRICING goes beyond simply competing with market rates for similar offerings. Instead, it focuses on leveraging pricing as a strategic tool to create or preserve value, propelling your brand upward on the economic value curve.
Perceived Price and the Value Curve
At the core of effective PRICING is the concept of the Perceived Price—how customers interpret the value of your offering relative to its cost. Understanding the standard pricing unit in your market is critical to analyzing your position.
For instance:
In a supermarket, shampoos or soaps are typically priced per milliliter in Europe, while coffee is sold by weight.
In the service industry, consulting services are often charged per hour or day.
Once the reference pricing unit is established, you can calculate the perceived price of your offering compared to competitors using the formula:
24 / (E - C) * (M7 - C) - 12
Where:
E is the highest unit price in the market,
C is the lowest unit price,
M7 is your unit price.
This calculation helps determine your position on the value curve, indicating whether your PRICING strategy accelerates or impedes your business growth.
Example: Artisanal Coffee
Suppose your artisanal coffee beans are priced at $15 per pound (M7). In your market, the highest-priced coffee is $20 per pound (E) and the lowest is $10 per pound (C). Applying the formula provides insight into where your pricing strategy positions you on the value curve.
A strong position on the curve suggests your pricing reflects perceived value, while a weak position may signal the need for adjustment to better align with market conditions and customer expectations.
PRICING and Perceived Value
PRICING is intrinsically tied to how customers perceive the value of your product or service:
If your offering is seen as a commodity, customers will gravitate toward the lowest price.
Conversely, if your unique value proposition is clear, customers may accept higher prices that reflect this differentiation.
For example:
Starbucks customers willingly pay premium prices because they perceive value beyond the coffee itself—a unique experience.
A luxury fashion brand can command high prices because it offers a transformational experience, making cost secondary for its target audience.
Key Principles of an effective PRICING strategy
An effective PRICING strategy should adhere to the following principles:
Be Value-Based: Align your price with your position on the economic value curve.
Consider Market Conditions: Analyze competitor pricing and customer price sensitivity to ensure relevance.
Enhance Your Brand’s Purpose and Positioning: Reflect your brand identity. For instance, a disruptive brand might challenge market norms with innovative pricing.
Strengthen Your Value Proposition: Reinforce the unique aspects of your offering to justify the price.
Ignoring these principles can lead to a PRICING strategy that acts as a brake on your progress, rather than an accelerator.
Assessing your pricing strategy
To evaluate your pricing, consider a scoring scale from -12 to +12:
12 represents a low price that may correspond to a low perceived value.
+12 indicates a high price with a high perceived value.
For example:
If your artisanal coffee is priced above average market rates but customers appreciate its unique quality and sourcing, resulting in a high perceived value, your pricing might score a +8 or higher on this scale.
On the other hand, a low-priced coffee with limited differentiation might score closer to -8 or -12, reflecting a misaligned pricing strategy.
Value Map that helps you understand your current pricing situation
Translating pricing into action
A strong pricing strategy should consistently reflect your value proposition and support customer decision-making. Pricing decisions should be based on insights into customer behavior, cost structures, and competitive analysis, while integrating sustainability as a core principle.
Questions to consider:
Does your pricing strategy create more value than the cost for your customers compared to alternatives?
How well does your pricing align with your customers’ Willingness To Pay for solving their problems?
Does your pricing account for all costs associated with delivering your value proposition?
Is your pricing consistent with your brand positioning and category goals?
How does your pricing strategy encourage sustainable choices?
Method for self-assessment
For a comprehensive evaluation of your understanding and application of the Pricing concept, rate your agreement with the following statements on a scale from -3 (completely disagree) to +3 (completely agree):
Your value proposition is creating more value than the cost of the next best alternative for your customers.
Your pricing strategy is based on customer Willingness To Pay (WTP) for solving their problem.
Your pricing strategy takes into account all costs associated with your value proposition.
Your pricing strategy is aligned with your brand positioning and your goals for the category.
Your pricing strategy encourages customers towards the most sustainable option available.
Interpretation of the scores
Negative scores (-1 to -3): Negative scores suggest that your pricing strategy is misaligned with customer expectations, cost structures, or brand positioning. This can result in undervaluing your product, losing competitive advantage, or failing to support sustainability goals. Immediate action is required to reassess your pricing approach.
A score of zero (0): A neutral score reflects uncertainty or incomplete alignment in your pricing strategy. While some elements may be in place, such as cost coverage or WTP analysis, they lack cohesion or fail to drive sustainable behaviors effectively. Further refinement is needed to strengthen your strategy.
Positive scores (+1 to +3): Positive scores indicate that your pricing strategy effectively communicates value, aligns with customer WTP, covers costs, and supports brand positioning. Additionally, your pricing encourages sustainable choices, reinforcing your commitment to long-term impact and differentiation.
Case study: Green clean’s pricing
Misaligned understanding (-3, -2, -1): Green Clean’s pricing fails to reflect the value of its eco-friendly products, either undervaluing them compared to competitors or setting prices that exceed customer WTP. The lack of cost alignment and sustainability incentives weakens the brand’s positioning and reduces customer appeal.
Surface understanding (0): Green Clean’s pricing covers basic costs and aligns with industry averages but lacks differentiation or focus on sustainability. Customers may perceive value but are not incentivized to choose more sustainable options, limiting the brand’s impact and competitive edge.
Deep understanding (+1, +2, +3): Green Clean’s pricing highlights the value of its unique features, such as non-toxic ingredients and zero-waste packaging, while aligning with customer WTP. By offering subscription discounts and promoting refillable packaging, the brand encourages sustainable behavior. This strategy reinforces its eco-friendly positioning, builds customer loyalty, and ensures profitability.
Conclusion
The Pricing sub-dimension is a strategic tool for aligning your value proposition with customer expectations, brand positioning, and sustainability goals. By creating value beyond cost, basing pricing on WTP, and incentivizing sustainable choices, businesses can enhance their competitive edge, foster customer loyalty, and achieve long-term success.
Sources
Market and Economic Value, Laurent Bouty, https://laurentbouty.com/blog/2019/marketing-canvas-market-and-economic-value
Neil Patel - 5 Psychological Studies on Pricing That You Absolutely MUST Read, https://neilpatel.com/blog/5-psychological-studies/
The Ultimate Guide to Pricing Strategies, https://blog.hubspot.com/sales/pricing-strategy
Replyco, 23 Pricing Strategies Any eCommerce Seller Can Use to Increase Sales, https://replyco.com/brainery/23-pricing-strategies-for-ecommerce-sellers/
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Marketing Canvas by Laurent Bouty
Marketing Canvas - Visual Identity
Our article delves into the integral role of Visual Identity, a critical sub-dimension of the Marketing Canvas developed by Laurent Bouty. We begin with defining visual identity, as conceived by eminent industry figures like David Aaker and Jeff Bezos, and explain how it goes beyond merely a logo or graphic design. Exploring connections to other sub-dimensions such as Purpose, Positioning, and Values, we highlight its overall impact on your brand's strength. We break down the assessment process into a robust scoring system, identifying potential reasons for various scores and recommending improvement strategies tailored to each scenario. By synthesizing theory with real-world applications, this article offers valuable insights for anyone keen to strengthen their brand's visual identity. Whether you're a seasoned marketer, budding entrepreneur, or simply interested in understanding branding better, our guide aims to make the complex concept of visual identity easy to grasp and apply.
Last update: 03/06/2023
In a nutshell
Your visual identity is how you translate your purpose into visible elements. It can be defined as the collection of all brand elements that you create to portray the right image of your brand. While the Values will help your employees taking the right decisions and having the right behaviors, the Visual Identity will ensure your customers/clients to recognize (without any doubt) who you are and why you exist.
In the Marketing Canvas
The Marketing Canvas is a powerful tool for entrepreneurs and non-marketers to build a robust marketing strategy. It consists of six meta-dimensions, each with four sub-dimensions, for a total of 24 sub-dimensions defining your Marketing Strategy. One of these sub-dimensions is VISUAL IDENTITY, which falls under the BRAND meta-dimension
Enhancing and Understanding Visual Identity
Visual Identity is more than just a logo or a specific color palette; it's an amalgamation of all tangible elements that help consumers distinguish one brand from another. More importantly, it serves as a visual representation of a brand's core values, mission, and personality.
Consider a company operating in the clean, green, and sustainable business sector. Its visual identity may embody elements of nature, using earthy colors, and organic shapes, alluding to its environmental stewardship.
Brand is your logo and visuals, too. A great brand deserves a great logo and great graphic design and visuals. It can make the difference when the customer is choosing between two great brands. But these alone cannot make your brand great. [2]
Tools for Visual Identity
Crafting a resonant visual identity requires a deep understanding of a brand's core philosophy and aspirations. Subsequently, these insights are transformed into a coherent visual language. The tools for achieving this comprise of:
Logo: A well-crafted logo should be instantly recognizable, conveying the brand's ethos in a visually appealing manner.
Color Palette: Colors elicit emotional responses and help create brand associations. A well-chosen color scheme can enhance a brand's message and connection with its target audience.
Typography: Fonts often subtly communicate a brand's personality. For instance, a modern, clean typeface may suggest a forward-thinking, innovative brand.
Imagery: Consistency in the style of imagery used, whether it’s the use of photographs, illustrations, or graphics, adds another layer of depth to the brand identity.
Brand Guidelines: To ensure consistent application across all mediums, a comprehensive brand guideline document is necessary. It serves as a rulebook, detailing everything from logo usage to color codes and fonts.
Visual Identity and its Relationship with other Marketing Canvas Sub-dimensions
The real power of visual identity becomes apparent when viewed in context with the other sub-dimensions of the Marketing Canvas. All dimensions are interconnected, and each can impact the other.
Purpose and Values: These drive the creation of the visual identity. A brand with a purpose centered around sustainability will have a visual identity that reflects this commitment, possibly with green color schemes or nature-inspired logos.
Positioning: Your positioning in the marketplace should be echoed in your visual identity. If you're positioning yourself as a luxury brand, your visual identity should exude sophistication and elegance.
Experience: Visual identity plays a significant role in shaping customer experience. It helps in setting the right expectations and evoking desired emotions from customers, thereby influencing their overall experience with the brand.
Pricing : Your product and its pricing strategy can influence your visual identity. If you sell premium products at a higher price point, your visual identity should align with this to convey a sense of exclusivity.
Translating Visual Identity into Action
Translating visual identity into action requires consistency and strategic integration across all brand touchpoints:
Brand Consistency: All visual elements, from the website to packaging, should represent the brand accurately, fostering trust and recognition.
Strategic Partnerships and Collaborations: By aligning with like-minded brands, events, or influencers, you can further reinforce your brand's visual identity and expand your reach.
Product and Service Design: The design of the products or services should also resonate with the visual identity. For a green business, this could translate to sustainable materials in their product design or eco-friendly packaging.
Brand Evolution: As brands grow, their visual identity should also evolve to stay relevant and appealing, while still maintaining a connection to the original brand ethos.
Statements for self-assessment
The visual identity of your brand plays a crucial role in shaping how consumers perceive and connect with your brand. It extends beyond just a logo – it includes color schemes, typography, imagery, packaging, and even the layout of your physical or online presence. It should be consistent and aligned with your brand values, resonating with your target audience while differentiating you from competitors.
To evaluate the effectiveness of your visual identity, measure your agreement with the following statements on a scale from -3 (completely disagree) to +3 (completely agree):
Your brand identity is consistent throughout the customer touch points.
Your brand identity is in line with brand purpose, positioning and values.
Your brand identity characteristics are different from other competitive brands and are easily attributed to your brand.
Your brand identity has high like-ability rating with your target audiences.
Your brand identity accurately reflects the sustainable nature of your products or
services.
If you find yourself disagreeing with these statements, it's time for a reassessment. This might involve refining your logo, re-evaluating your color palette, redesigning your website or packaging, or even embarking on a complete rebranding journey.
Example: Suncharge
To elucidate this further, let's consider a practical example in the context of a clean, green, or sustainable business. Suppose we have a start-up that aims to revolutionize the renewable energy sector by introducing portable, solar-powered chargers for electric vehicles, named "SunCharge". The purpose of the start-up is clear: to promote sustainable energy usage and reduce reliance on non-renewable sources.
The creation of the visual identity for SunCharge, like any brand, starts with understanding its core values, target audience, and unique selling proposition. The brand aims to convey innovation, environmental responsibility, and reliability. With this in mind, the creation of visual assets, such as logos, color palettes, and typography, should all be aligned with these principles.
Logo: The logo is the most crucial aspect of visual identity. A logo should be unique and must encapsulate the brand's essence. For SunCharge, the logo could be a sleek, modern design combining a stylized sun and a charging symbol, hinting at the renewable energy source and its application.
Color Palette: The choice of colors significantly affects how a brand is perceived. Greens and blues are typically associated with environmental friendliness and trust, making them a good choice for SunCharge. Additionally, warm yellows or oranges could symbolize the sun, bringing a positive and energetic vibe to the brand.
Typography: This should reflect the brand's character. For a modern, innovative brand like SunCharge, clean and straightforward sans-serif fonts might be the best choice.
Images and Graphics: These should consistently follow the chosen aesthetic. This might include images of clean energy sources, modern technology, and graphics with a simple, modern design.
Brand Guidelines: This document ensures consistency across all visual aspects of the brand. It should define the logo usage rules, primary and secondary color palettes, typeface choices, and more. This will serve as a reference for anyone creating materials for the brand, ensuring a unified and coherent brand image.
Conclusion
In conclusion, a strong visual identity does more than making your brand look good. It communicates your brand's values and personality, creates a memorable impression, and fosters a deeper connection with your stakeholders. It's a demanding process, but when done right, the result is a brand that is not only visually appealing but also communicates its essence at a glance.
Sources
Woven Agency, https://woven.agency/blog/what-is-the-brand-identity-prism/
Harvard Business Review, A logo is not a Brand, https://hbr.org/2011/06/a-logo-is-not-a-brand
HowBrandsAreBuilt, https://howbrandsarebuilt.com/blog/2018/12/21/the-brand-identity-prism-and-how-it-works/
Inkbotdesign, https://inkbotdesign.com/kapferers-brand-identity-prism/
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Marketing Canvas - Values
Your values are the translation of your purpose into key behaviors. Most of the commercial activities are delivered through behaviors (from people or from systems). When developing your marketing strategy, you should have Brand values that are fully amplifying your Brand Purpose. It will help your organization to translate your beliefs into action.
Last update: 25/12/2024
In a nutshell
The Values sub-dimension of the Marketing Canvas represents the core principles that define your brand’s identity and guide its actions. Brand values influence every decision, shaping how a brand interacts with customers, stakeholders, and society. Strong, clearly defined values help differentiate the brand from competitors, foster customer loyalty, and ensure consistency in behavior and messaging.
For example, a company like Green Clean might adopt values such as sustainability, transparency, and health. These values not only reflect the brand’s commitment to its mission but also resonate deeply with its eco-conscious customers.
Introduction
The Values sub-dimension in the Marketing Canvas plays a critical role in establishing a brand’s identity and aligning it with its purpose, positioning, and customer expectations. Brand values articulate what the brand stands for, serving as a compass for decision-making and a foundation for building trust and loyalty.
Values are not just words on a page—they are actionable principles that must be consistently demonstrated in the brand’s behavior, communications, and offerings.
What are values?
Brand values are the core beliefs and principles that define what your brand represents. They influence every aspect of your operations, from how you treat customers and employees to how you address societal and environmental challenges.
For example:
Sustainability might drive decisions about materials, suppliers, or packaging.
Integrity might ensure transparency in advertising and customer communications.
Customer focus might prioritize delivering exceptional service.
Green Clean’s values could include:
Sustainability: A commitment to eco-friendly practices and products.
Health: Ensuring safe, non-toxic cleaning solutions for families.
Transparency: Being honest and clear about the ingredients and processes used.
These values help customers understand what the brand stands for and why it matters to them.
Translating Beliefs into Values
Ideally, your Values should be a perfect reflection of your Purpose, or the fundamental beliefs that drive your organization. This consistency allows the values to amplify your brand's purpose, guiding its actions and decisions.
Consider, for example, a green, clean-focused company, which operates under the belief that sustainable practices are paramount to our future. Its core values may include sustainability, accountability, and innovation. These values are the bridge between its purpose - promoting environmental responsibility - and its day-to-day operations, whether it's in product development, supply chain management, or customer service.
Values: an in-depth perspective
Frabrikbrands proposes that effective core values should be Memorable, Unique, Actionable, Meaningful, Clear, Timeless (MUAMCT). This is not a mere acronym, but a mantra for brands to assess the strength and relevance of their values. Each attribute plays a crucial role:
Memorable: The values should resonate with your team and your target audience, making them easy to remember and internalize.
Unique: Your values should set you apart from the competition, demonstrating your unique perspective and approach.
Actionable: They should translate into concrete behaviors and processes within your organization.
Meaningful: The values need to be significant, appealing to the emotions and beliefs of your stakeholders.
Clear: Clarity avoids confusion. Your values should be understood by everyone.
Timeless: Despite market changes, your core values should remain constant, reflecting enduring principles.
For example:
Internal Alignment: Green Clean’s values guide employee behavior, ensuring all actions align with the brand’s mission.
External Perception: Customers see Green Clean’s values reflected in its products, marketing, and partnerships, reinforcing trust and loyalty.
When values are authentic and consistently upheld, they strengthen the emotional connection between the brand and its audience.
Translating values into action
Defining brand values is only the first step; the real impact comes from living those values every day. From product development and customer interactions to advertising and community involvement, values must be evident in every touchpoint.
Questions to consider:
Are your brand values clearly articulated and consistently communicated?
Do your values align with the current and future context of your industry?
How do your values differentiate your brand from competitors?
Are your values evident in your brand’s behavior and interactions?
How do your values reflect a commitment to sustainability?
Statements for self-assessment
Evaluating your values is as essential as defining them. Ask yourself: Are your brand's values helping you achieve your goals? Are they a reflection of your purpose? Are they incorporated into every aspect of your business?
To assess the effectiveness of your values, consider your agreement with the following statements on a scale from -3 (completely disagree) to +3 (completely agree):
Your brand values are well defined and clearly articulated.
Your brand values are relevant with respect to the context your brand is operating in.
Your set of brand values allows to differentiate what you stand for with compared to your competitors.
Your brand values are reflected in your brand behaviour and what you.
Your brand values are all focusing on sustainability
If you find yourself disagreeing with these statements, it's time to revisit your core values. This might involve a re-examination of your purpose, a re-interpretation of your values, or even a complete overhaul of your organization's culture. Remember, the relationship between your purpose and values should work as an accelerator, not a brake.
Interpretation of the scores
Negative scores (-1 to -3): Negative scores indicate a lack of clarity, relevance, or alignment in your brand values. This suggests that your values may not be well defined or communicated, leading to inconsistencies in behavior and customer perceptions. Without clear values, the brand may struggle to differentiate itself or build trust with its audience.
A score of zero (0): A neutral score reflects uncertainty or incomplete articulation of your brand values. While some values may be present, they lack depth, relevance, or alignment with customer expectations and sustainability goals. Further refinement and integration are needed to make values a meaningful part of your brand identity.
Positive scores (+1 to +3): Positive scores indicate that your brand values are clearly defined, relevant, and consistently demonstrated. Customers and stakeholders understand what the brand stands for, and its actions align with these principles. Strong values help differentiate the brand, inspire loyalty, and reinforce its commitment to sustainability.
Case study: Green clean’s values
Misaligned understanding (-3, -2, -1): Green Clean lacks clearly defined values or fails to articulate them effectively. Customers and stakeholders are unsure of what the brand stands for, leading to weak differentiation and limited trust. The absence of a focus on sustainability further disconnects the brand from its eco-conscious audience.
Surface understanding (0): Green Clean has a general sense of its values but does not consistently reflect them in its behavior or communications. While customers may recognize some alignment with sustainability or eco-friendliness, the values lack depth and differentiation, limiting the brand’s ability to build loyalty or stand out.
Deep understanding (+1, +2, +3): Green Clean has well-defined, relevant values centered on sustainability, transparency, and health. These values are consistently demonstrated across all touchpoints, from product design to customer service. By emphasizing its commitment to these principles, Green Clean differentiates itself from competitors and builds trust and loyalty with its eco-conscious audience.
Conclusion
Brand values are the foundation of a brand’s identity, guiding its actions and shaping customer perceptions. Clearly defined and consistently demonstrated values differentiate the brand from competitors, foster customer loyalty, and ensure alignment with societal and environmental priorities. By living its values, a brand can build meaningful, lasting relationships with its audience and create a positive impact in the world.
Sources
Harvard Business Review, 2002, Make your values mean something
Frabrikbrands, https://fabrikbrands.com/how-to-define-brand-values/
More on the Marketing Canvas
Marketing Canvas by Laurent Bouty