Have consumer firms lost their pricing power?

DEBATE

 Thus, I would say the power to exercise pricing options is being lost by companies.  Why is this is happening? There are five reasons. Companies have the ability and the power to exercise pricing options but are not using them fully. The only direction that companies seem to move in is downward.  Consumers buy brands because they desire trust, and trust comes from stability, not volatility of prices. Companies need to have a long-term view of prices for brands rather than behaving like commodities. Stability in the pricing strategy would ensure long-term trust and help companies use their power to exercise pricing options.  Companies must realise that when they reduce price and over-discount instead of gaining customers, they may be losing credibility. This is because customers wonder why they were charged such high prices for so many years. They also suspect the motives of the companies and start doubting the current or future quality of the brand.  Companies should use their power to exercise pricing options by using various levels of affordability. Affordability does not necessarily mean lower prices; it means what is it that customers are willing to give in terms of money versus what the customer is about to get in terms of benefit.  People do not buy products or services; they buy brands. People do not buy features; they buy benefits. If companies want to use their power to exercise pricing options, they should increase the perceived value rather reduce prices.  Perceived value is a mixed of tangible and intangible benefits that the consumer gets from the brand. Companies have and should use the power to exercise pricing options by increasing perceived value.  To be able to have an effective pricing strategy, six Cs have to be considered. Each of these is crucial in deciding the final pricing. The first is cost. The approach to pricing could be based on total cost or direct cost, especially if a new market has to be entered or if brands have to be exported.  The second important factor is the customer. Customer perception and expectations determine whether a brand will be successful or not.  For example, the pricing of Taj or Oberoi Hotels is extremely premium. If the pricing is brought down substantially, the up-scale consumer may opt for another premium hotel and a lower segment may start using the hotels