It’s summer time which means grilling season! With grills ranging from under $100 to over $1,000, what does it take for these brands to convince consumers to trade up to the high-end lines and pay the higher prices?
To some, summer time means hitting the beach or taking the annual family vacation, but it also means a high usage (and high purchase) of grills! At initial glance, it seems like a relatively easy decision process:
- Charcoal or gas?
- What size unit is needed?
- How much to spend?
However, when walking through the store or shopping online, consumers are inundated with a feature list that can be exhaustive, but also very exhausting.
Take a snapshot of these two grills for example[i]
How much does these features truly resonate with consumers?
- More cooking area and a side burner: Does having this justify paying twice the price?
- >10K extra BTU per hour: How much power does a home griller truly need?
- Cooking grate material: How important is this to consumers?
- Electronic crossover ignition system vs. infinity ignition: Do consumers even know what this means?
Whether it’s buying a grill or any general purchase, the price that is charged must be justified with the value delivered from a consumer perspective. If consumers do not understand the true benefit of trading up to the $1,000 price tier, then why should they? Just because the product cost may be higher does not mean that a consumer is willing to pay that high price. When companies cannot get consumers to trade off on the benefits, then all they will focus on is the price. And it is never a good thing when you get people to only focus on price. So even if they have a higher psychological price threshold to spend on a grill, companies are not capturing the full willingness to pay that may exist in the market.
Everything must start with what is important enough for consumers to pay more for, and how much more they are willing to pay for that. Successfully getting consumers to pay $1,000 to cook a piece of meat means thinking about price at the beginning of the process, and not treating it as an afterthought in the end. The innovation process must start with finding out what consumers want and how much they are willing to pay for it, and then designing a product to fit those needs and that associated price point. When cost and margin expectations become priority over the consumer, it is no wonder why over 70% of new product launches do not meet expectations[ii].
Whether it is buying a grill, food at the supermarket, or purchasing equipment for business, it is still a purchase with decision-makers trying to determine if they derive enough value to justify spending that much. That is the $1,000 dilemma.
[i] Weber Spirit E-310 3-burner natural gas grill vs Weber Genesis II LX E-340 3-burner natural gas grill on homedepot.com as of Jul 10, 2017
[ii] SKP Global Pricing Study 2016
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