ecreativa Beauty and Wellness industry prices and pricing

Lindisima

Pricing strategy in the personal care, beauty, and wellness industry

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If you are in the personal care industry (which sometimes may include beauty, wellness, health, cosmetics, etc.), or considering investing in the industry, you may realize that the pricing is all over the place. There is a reason for this: A lot of the products and services in these industries are not sold on functionality and performance, but on perceived value. Thus, you can find a body lotion in Wal-Mart for around a dollar while a comparable product in an Aveda or Body Shop store may easily be in double-digits. In fact, chemists in the industry know that in most cases there is hardly any difference in ingredients (or not enough to justify the kind of price difference you see).

How to price your products in the personal care industry?

Assess the competitive situation: The price you can get for your product will depend largely on how and where you position your product. For instance, if you want to sell your product through Sephora (or a similar high-end retailer), you can take a look at the price range of other suppliers, and if your product is good enough to compete in this category, you can price accordingly.
Estimate the value that you will create for your customers: And we are not talking just about the perceived value here. Even a bad product from Chanel or Shu Uemura will not last too long. So while perceived value, marketing, and brand is important, you must also take into consideration any additional value you might be creating through results, performance, and functionality.
Tie your pricing strategy with overall business strategy: Who is your target market? What are you trying to accomplish with this specific product or service (steal market share, enter new market, product line extension, etc.)?
Test marketing and focus groups: None of your analysis makes sense unless your customers see what you believe. Before the final launch, do extensive focus group analysis and test marketing to develop a better price point. Through such research, you may be able to discover whether you might be leaving money on the table of if your customers do not share your vision. Make adjustments in your prices accordingly.