Pricing

by Keith Diggle

 

Introduction to the Pricing/Sales/Sales Promotion Trinity

If you look at the A.D.A.M Model, just below the Product/Producer Amalgam, you will see three elements: Pricing, Sales and Sales Promotion. This trinity represents the real muscle of arts marketing. The elements work together with each part influencing the other two. The three make up a formidable combination. To save time I’ll refer to this trio of decision-making and activities as the ‘Trinity’.

The Trinity is a relationship that is easily overlooked if you accept the orthodox view of marketing that breaks the function down into the ‘Four Ps’ – Product, Place, Price and Promotion – because this breakdown has the effect of concealing the way in which marketing decisions have to be made in practice. The ‘Four Ps’ analysis actually blinds people to what really goes on when an art product is being marketed.

It is as though the motor car is defined as being made up from metal things, glass things, plastic things, leather things and any number of other things made of different materials. This definition is true but it doesn’t tell you how a motor car works. That is how it is with the ‘Four Ps’ and arts marketing.

Let us assume that Publicity (Corporate and Product) has done its job and people are getting interested in buying and let us accept my hypothesis that wanting to buy does not mean that someone will necessarily go on to buy. Let us look at each member of the Trinity and see how it operates in bringing about that transmutation of wanting into doing. On this page we look at Pricing. After you have read this you should click through to Sales and then on to Sales Promotion. It might then be a good idea to go back to Pricing to help you get the concept firmly established in your mind.

 

PRICING

Putting a price tag on what you have to sell is a very important part of financial planning but it is not something that should be left entirely to the finance department.
Decisions made in this area impact immediately on the way people respond to your Corporate and Product Publicity so the arts marketer must have input into the making of Pricing decisions.

The people that have been influenced favourably by Corporate and Product Publicity will be matching up what is being offered to them with the price that is being charged.
As they do this they will be making an assessment of value – that is, relating what they expect the experience to be to the price that is being charged. Without going into detail at this stage it is perfectly obvious that if the perceived price/value relationship is in some way wrong these people will tend to shy away from buying. We could fairly guess that if they see the price as being too high then they won’t buy and if the price is too low it may give out bad signals about the quality of what is being offered – and again the news is bad for the arts marketer. Another factor, one hardly ever taken into account, is the confusion that is caused by multiple-pricing. Our Publicity projects a promise of one art experience and, so often, our Pricing then proposes to charge half a dozen or more different prices for it. Without going into this too deeply (there are, of course, often good reasons for charging different prices) let us agree, at least, that requiring the potential customer to make a choice (when the criteria for making that choice are, to say the least, imprecise) puts up another potential barrier to purchase.

The way we price what we have to sell can put up a barrier to purchase – and most usually does, one way or another – but we have the other two members of the Trinity to help out. .