Proudly SA: Price versus value and no, local isn't expensive
These discussions are generally in response to comments about the cost of buying local, which we often hear is higher than buying imported goods. This simply doesn’t hold true and we can give many examples of over-priced imported items, and of proper price comparisons between items of the same quality and we can easily demonstrate how South Africa manufactures a wide range of products for all pockets.
For manufacturers and producers, it is important when price setting to ensure you do your market research and make the correct price comparisons - apples with apples and not apples with oranges - and that you benchmark your product against a similar brand in the same space as you.
When it comes to positioning it is important to understand that successful sales are achieved through more than just having a good product.
Part of good marketing is also knowing your price point and how the design and advertising of your product will affect the perceived value and how much a customer will be willing to pay for it.
Establishing value is key to setting pricing. You can be unapologetically expensive if you can defend the value of your product, but equally, if you are pitching at the lower end of the market, make sure your price matches your offering.
Do not over price because you believe being cheap is a deterrent to consumers. The price and value of your product must meet consumers’ expectations, and this is the key to ensuring that your brand gains traction in the correct retail space.
Sometimes, longevity in the market is achieved by selling more volume at a lower price than you might have liked for your product and is more effective than looking to make a “quick buck” by selling fewer items at an over-inflated price.
Consumers will soon make their own judgement about the value for money they are deriving from your product and change their brand allegiance if they find you have got it wrong.
And for consumers, it is important not to compare the price of a premium local brand with a low-cost imported item as the value and quality of those two brands are completely different.
We know that South Africans like their imported luxury goods, and that there is an affluent market sector out there.
We also know that many people struggle to put food on the table and clothes on their backs, and that price is king for them.
Products co-exist on shelves across all price brackets and consumers are discerning and shop according to their means, needs and wants.
Whatever your financial position, each and every one of us can contribute to the success of local brands and therefore to the economy and to job creation by buying a locally produced item in our price range.
The title of Shekinah’s hit song Suited best describes what we are advocating for as Proudly SA, where the price and the corresponding value of your product or service should be ideal for your end user or consumer.
Eustace Mashimbye is the chief executive of Proudly SA.