Smarter Pricing: How to capture more value in your market

How price can convey aspiration

Premium pricing can give an up-market positioning to a new brand like Hill Station. For Lacoste, a luxury brand with a chequered history, things were tougher. As we saw in Chapter 1, sales in the USA in the 1990s were slipping, and licensee General Mills cut costs to maintain margins, using inferior fabrics and manufacturing techniques. Poorer quality reduced sales, putting further pressure on cost saving. The aspirational brand was no long anything to aspire to. When former Levi’s executive, Robert Siegel, took over the loss-making Lacoste in 2001, he increased prices and introduced restyled men’s shirts and shapelier women’s shirts. In his view, a cheaper sales tag would not reflect the quality, nor allow continued ...