Pricing Strategy

PRICING RATIONALE

Image: vectorstock.com, n.d.

Images: Gittins, 2016,Bradshaw, 2018

Shown in the competition shop report, Missguided’s competitors sell similar product ranges. As a result, the range plan uses a product line pricing strategy, taking into account cost differences between products, customer evaluations of different features and competitors’ prices, with the end goal to maximize profits (Armstrong and Kotler, 2007:276). Costing between £10-£25, consumers will mix and match products; theoretically, buying two items from the range to complete their look. As Missguided’s current swimwear varies between £8-£25, offering value for money pricing will reflect Missguided’s brand values. To ensure product variety,

buyers can also adopt a “good, better, best” strategy; taking into account product design to offer consumers diverse pricing. In the range, the thong-style bottoms are the ‘good’ product (£10), the bandeau top is classified as the ‘better’ product (£15) and the swimsuit as the ‘best’ (£25).

In order to establish the profit margin, merchandisers will consider production costs, alongside post-mortem reports from previous ranges. Retailers traditionally work on a profit margin of around 60% on a branded item (Hills, 2020). Therefore, taking manufacturing, stock and brand values into account, the Missguided X Hideout range margin varies between 65%-70%. Ultimately, each garment has a price that is high enough to achieve a reasonable profit margin and yet low enough to keep merchandise affordable and competitive.

Images: the-dots.com, n.d.

With the festival site open across 7 days, the pop-up will have 10 of each size, in every style available each day. Post season, any inventory leftover may see reductions; as adding the pieces online at a reduced price extends the potential of profits.

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LOCATION

Hideout Festival is an annual music event, hosted along Croatia’s beach cove, Zrce Beach. Home to numerous pop-up style bars across its front, over 20,000 festivalgoers attend the week-long event in June every year (skiddle.com, 2020). According to Mintel (2019), 49% of Generation Z (aged 16-19) attended a music festival in the last year, joined by 43% of millennials (aged 20-39). Posner (2015:108) explains how market segmentation helps enhance a company’s understanding of its consumers, positioning its brand and offering products designed to appeal to targeted consumers. Lifestyle can play a crucial role in this; clothing and style preferences are influenced by a person’s work, peer group or leisure activities (Posner, 2015:109).

Image: ratemyrave.blogspot.com, 2017

Zcre Beach, Croatia (ratemyrave.blogspot.com, 2017)

Therefore, by positioning the range at a festival, consumers will have broadly similar fashion traits, and as the range focuses on festivallike swimwear styles for this target market level, Hideout provides the ideal location. Additionally, to symbolise Missguided’s brand values and encompass their “girl on the go” attitude, the range will be captured inside a campervan; embodying travel and brand identity.

Image: thecornishlife. co.uk, 2018

PROMOTION

As brand image is reinforced through product, pricing and the pop-up location, promotion through social media will ensure targeted consumers associate the range with Missguided. Prior to the festival, consumers can get a sense of the swimwear, with social media influencers promoting products through Instagram. Missguided influencers are known as the “babes of Missguided”, as their following is used to advertise gifted products.

The aim of “celebrity” endorsement is to create a lifestyle the consumer desires, directly associated with the brand to reinforce brand image and position in the marketplace (Posner, 2015:177). This reaches potential consumers, as the influencer creates excitement around the range.

Even so, over-concentration on promotion to the neglect of adequate and timely distribution can be a common feature of a flawed approach (Easey, 2009:142). Co-ordinating online advertisement correctly so it doesn’t overexpose the swimwear is a factor that needs to be monitored by the buyer.

Images: Hunt, 2018, Parsons, 2019