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Oct 21, 2008

How “Exclusive”?

Exclusive products are unique and cannot be purchased everywhere. A friend thought this “exclusive right” could give him a large advantage over his competitors. But, he got it all wrong when he introduced discount sales on the product!

He didn’t make profit through it, simply (pun intended).

Ah, nobody said it was easy to sell exclusive products, right?

So what is the problem in conducting a discounted sale?

There isn’t really a problem, yet that could lead to weak product positioning – more so for an exclusive product.

See, the human psychology says that the higher the price, the better the product and otherwise. This is psychologically sense, as well as from the business side.

For example, Brand A has created an image of high quality in the minds of consumers. It is marketed by Brand A to a wealthy segment. From the view of Brand A current and potential buyer, the price is secondary because the brand itself is prestigious and premium.


If Brand A decreases prices, the rich guys will stop buying it, because everybody can. And Brand A is no longer that “exclusive”! This would ruin its segment, and deposition itself. This would hurt the brand, and eventually the sales figures will drop.

Thus there are real reasons to avoid discounts for a certain product. We have an image to keep, an “exclusive” value to protect. We do not want to destroy our markets by offering higher quality products too low.

Also, our customers agree to pay the higher price if they are convinced that what is offered to them, to their perceptions, is just as valuable or worth paying more than the discounted price.

And, indeed, there will be time when we would have the problem that we can no longer raise prices, because everybody expects a cheap price. They are expecting the same discounts for future products offered.

Hence, do clearly identify your current and potential customers. It’s important and easier to retain them than to give an unnecessary discount to everyone.

Let us assist you to target the right customer, and penetrate into the correct market segmentation.


Maria Azlan
Chief Operating Officer
BMI Research (Malaysia)