Pricing: Multiple Bands, Multiple Prices

Having a second brand allows companies to reach price sensitive customer segments, without sacrificing profitability in the first brand.

Friday, June 30, 2017

5 Keys to understanding prices for second brands
By Ariel Baños, President and Founder of

Why the big price difference between first and second brands?  Are they the same, but cheaper? 

"Don't pay for the brand," some people say. "Don't take risks, chose something safe," say others. Who do you believe? In virtually every product category there are multiple brands to choose from.  Many of these options are second brands, ie alternative product lines, with lower prices. In some cases these lines belong to the same manufacturers of the first brands.  

Let's look at five key questions in order to understand the differences and similarities. 

1.  The great price difference   
In certain cases the price difference between first and second brands can reach up to 50%.  What is someone who choses the first brand paying for? Basically you are paying for peace of mind.  This difference is the cost of reducing the uncertainty associated with the purchase decision.  However, it is by no means a guarantee of higher quality.   

Read full article (in spanish).

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