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Prada and Discounting?

Authored By: Sarah Petty | Mar 14, 2010 8:55 pm | Category:

I love reading articles about people who have built amazing companies and brands. Usually, there is a person or several people who have a vision and are not willing to sacrifice what they believe in. In WSJ today (The magazine from the Wall Street Journal), it was facscinating to read how Patrizio Bertelli, chief executive of Prada, works with his suppliers and is protective of his brand. After some yelling in a discussion with Neiman Marcus recently, he describes his behavior as “a passionate exchange between two people who are proud and intense about their business.” So, he is personally in there fighting for displays at the stores who carry his products. I sat up in my chair when he tells how he is still angry that in 2008, in response to the economy, “Neiman Marcus, Saks and others discounted $1500 handbags and $750 footwear by as much as 70% causing European luxury firms to worry that their customers would never pay top dollar again.” I have just spent a week with small business owners talking about the risks of discounting and Bertelli’s comments completely illustrate this point. Once his Prada products are offered at a lower price, it does devalue the brand. Now, when people look at a handbag that was valued at $1500, but their friend purchased it for $500, in the mind of the consumer, that is a $500 bag. Think about it and tell me if you agree…

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Comments

Submitted by Anonymous on Wed, 03/24/2010 - 20:40.

Good info.  I think discounts are a good thing...for the right customer group.  If you're marketing to upper class, which a lot of studios do, offering coupons and discounts is probably a bad move.  Here's why.  Upper class consumers are looking for exclusive products - ie products that no one else can afford.  If any Joe can go to Walmart and pick up a Prada, the brand has lost it's exclusivity.


On the other hand, if you're marketing to middle class, a discount means they can "step up" to a more quality product.  And to the lower class, it means that they can now afford to buy something else off the shelf too.  The discount is incentive to purchase.


For the new guy above, here are a few thoughts.  I've heard MANY smart photographers say that starting out is a great time to price in the ballpark where you want to end up.  The approach we took was to start low because we didn't have much experience.  Then we raised prices over time as our skill improved.  Here's a tool that you may want to reference - I'd love your feedback.  It should help you establish the "don't go below here" amount for a session:


http://www.theartistmentors.com/Tools/SessionCostCalculator.aspx


 


TJ

Submitted by Anonymous on Mon, 03/22/2010 - 23:35.

I am a photographic artist and it has taken years of classes, reading books, blogs and outside education to come to the point where I am at in my career. Continuing to learn, evolve and yet stay true to my style is what I strive for daily. When people make a comment about paying $175 - $350 for a sitting fee, I remind my client that what I do is an art form and even though the session may only last an hour, it took 5 years for me to gain the education to turn a 'Picture' into photographic art for them to enjoy for the rest of their lives.


When you discount your products and time you are lowering the value of your work. If you need to build a portfolio, which I still do yearly, then have a modeling session at a different price than what you normally charge, but the modeling session is for no one else. Or, be honest and tell people you need to build your portfolio and do not charge them a session fee but charge them for portraits. Make sure there is value in your work otherwise you are shooting yourself in the foot.

Submitted by Anonymous on Tue, 03/16/2010 - 23:01.

As a new-to-the-business photographer, I have spent a lot of time thinking about pricing strategy and trying to figure it out-more like stressing over it. The above point is a very good one. I understand that by having lower prices or "discounting" prices then it brings down the value of portrait photography. I have a portfolio and am trying to build more business, but how I can I charge the same price as someone who has been in business many more years and has more experience? I would love some thoughts on pricing strategy and how to set prices whatever stage of business I'm in. Thanks!

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