What Is Price Segmentation? (Modern Brand Example) - YouTube

What's up brand builders Stephen Houraghan here  at BrandMasterAcademy.com and in this video  

you're going to learn what price segmentation  is with a modern brand example so you can  

charge different prices to different market  segments and stop leaving money on the table  

now if you're new to the channel and you want  to build brands that go beyond the visuals and  

the logo using strategy psychology and creative  thinking and you're in the right place hit that  

subscribe button and the notification bell if  you want to fast track your results make sure  

you grab the pro brand strategy blueprint it's a  free download and the link is in the description  

now as consumers we all buy goods and services  based on a multitude of factors including price  

now consciously or subconsciously we decide  that a given price is worth paying for a product  

or service and that's where the transaction  takes place but most of us don't realize that  

often we get charged not based on the value of  the product or service but based on who we are  

and what we're prepared to pay the same business  may charge others less for the same solution  

because of their circumstances or attitudes and  this is price segmentation strategy in action  

and in this video you're going to learn why it's  important and how you can use it so what is price  

segmentation anyway well it's a strategy used by  brands to charge different prices to different  

market segments for the same or similar products  or services although the solution of the brand  

has the potential to serve many different market  segments often the pricing of those solutions  

disregards some of those market segments and this  means that because of their rigid pricing strategy  

they're leaving money on the table and hindering  their growth opportunity now pricing segmentation  

is nothing new and it's a strategy that's been  around for generations now you see this strategy  

in action in both product and service industries  across entertainment fast food and even software  

now adobe is a creative software company  who understands the importance of software  

adaptation any designer knows that when you learn  the creative craft you're using a certain type  

of software and you're far more likely to continue  using that software throughout your professional  

career if that's the software that you've  learned with and that's why adobe offers students  

significantly reduce pricing they offer an  incentive for students to learn their skills  

using the software and to gain their knowledge and  hone their craft using that software because they  

know they're going to become professionals  and they'll have the means to pay full  

price for their service now value-based pricing  is another example of price segmentation and  

it's very common within the creative services  industry now this strategy involves charging  

your prices based on the circumstances  of your clients so larger organizations  

will place a higher value on the work that the  creative agency does due to their revenue their  

reach and their potential impact so the agency  will charge higher prices aligned with this value  

now if you want to dive deeper into the different  types of price segmentation that you can use  

within your strategy then I have another video  coming out so I'll make sure that I leave a link  

in the description below when it does  so how do you create price segmentation  

well the more assumptions you make when it comes  to price segmentation the more likely you are  

to get it wrong so to get clarity to reduce the  risk and to give your price segmentation the best  

chance for success there are two core requirements  that you need now before we dive into what they  

are don't forget to hit the like and subscribe  and the notification bell will let you know when  

I have new videos just like this step number one  segment your market so you want to analyze the  

overall market to understand the groups of people  who would want or need your product or service  

now this broad market should be further segmented  once you understand exactly who's in there and  

this can be through their resources their  attitudes their behaviors or a combination  

of these elements for example a creative services  agency may have segments that look like this the  

first might be solution focused funded businesses  and another segment might be survival focus  

bootstrap startups so these two segments represent  different businesses with different circumstances  

and probably different budgets as well step number  two detail your segments so once you've identified  

the segments of the market that you want to target  you want to drill down beyond the surface so you  

get to know them a bit better their demographics  and their psychographics will give you a window  

into their circumstances and their behaviors  but you want to dive deeper to understand  

what really makes them tick because when you  know what they want to achieve what they want to  

get to what kind of goals they want to  achieve what kind of challenges are standing  

in their way what kind of emotions they're  going through then you're much better place  

to be able to create an offer that bridges that  gap and step number three define your offers  

with such a detailed understanding of your  market segments you're now ready to define  

what your offer is going to be now ultimately here  the solution that you offer won't change too much  

and the messaging should still speak to the same  outcome but the difference will be in identifying  

the segment and matching an offer to meet that  segment now here again using the creative services  

agency example then you would likely have a core  service offering that will provide your clients  

certain deliverables from a brand identity  to a website but in segmenting the market  

you're not really changing the core offer  that you're putting out there you're really  

just adjusting the core offer to meet the needs  of specific clients so for the survival focus  

bootstrap startup the agency might strip away  some non-essentials such as a style guide or  

e-commerce or copywriting or supporting graphics  etc for the solution focus funded business  

they might add some elements they might  add strategy or face-to-face workshops  

or photography or follow-up consultations etc  in both cases they're still providing the core  

service they're simply adjusting the offer around  it now without a doubt pricing is one of the most  

important considerations for any brand you  may only want to target a narrow audience  

and therefore you might enforce a rigid pricing  structure or you may decide that you want to take  

advantage of multiple segments within your market  and increase your overall market share either  

way your pricing strategy is one of the most  important and influential decision making factors  

that your audience will consider so you should  consider it too if you want to learn more  

about branding psychology why people buy and  how to influence them then this video will  

help you out until next time brand like a  master and I'll see you in the next video