"The Playing Field Has Been Redrawn"
Published: Bonnier Business Media
Google search has made price a crucial part of the brand promise – regardless of whether one had other ideas to begin with.
“Many of us probably feel the playing field is being redrawn right now, especially when it comes to how we communicate value through price.”
Jan Tallroth, Chief Growth Officer at Priceindx, a company that has been working with price monitoring and dynamic pricing since 2006, describes their tool as something that “equips e-commerce managers, sales managers, purchasing managers, pricing strategists, assortment managers, and marketing executives with a broad range of services.”
“Talking about price isn’t devaluing the brand. On the contrary – it strengthens it, if done with precision and relevance,” he says with a consultant’s conviction.
Tallroth explains how price has traditionally been viewed as a tactical afterthought – something you tweak quickly before a campaign or financial close.
“But in today’s digital reality, the customer journey starts in a Google result. When brand promises are tested in real-time, price also becomes a strategic signal bearer, a statement, and part of the brand experience.”
This, he emphasizes, is a strategic shift for agencies and communications teams. He declines to give specific client examples, citing confidentiality, but states:
“The major challenge for today’s marketing manager is balancing long-term value creation with short-term cash flow – especially when management craves immediate revenue. And when consumers are more price-conscious than ever, one must have the strength to stand by the value offered, not just offer lower prices.”
Dynamic pricing has emerged as a real-time response to reconcile short-term demands with long-term strategies. With the help of AI, prices can now change faster and with more precision than ever.
“But it’s a technology that requires finesse. It’s of no use without a strategic compass. We work with smart rules, AI matching of known brands and private labels, and real-time data. But the most important thing we deliver is precision and context. Price isn’t just a number – it’s perception.”
We now also see how digital price tags in physical retail are becoming more like dynamic e-commerce.
“Digital price tags synchronized with e-commerce will become the norm in physical stores. But this demands control – especially with rules like the 30-day lowest price requirement, which forces honest and traceable communication.”
With rising transparency and the growing influence of reviews, pricing is becoming even more crucial. Some stores now activate member-specific pricing when a customer opens their app in-store.
The downside of dynamic pricing is familiar to anyone who has tried booking travel. When prices increase during the booking process, it doesn’t enhance the brand experience – it irritates and breeds distrust.
“Yes, price shouldn’t be adjusted too frequently – especially on frequently purchased items. Instead, decide what you want to be known for: like Ikea’s hot dog price, or that you always offer competitive pricing on kids' bikes or painkillers. You don’t have to be cheap on everything – but you must choose the products that will carry your price positioning.”
Is this shift prompting agencies to develop “pricing creatives”?
“No, but price strategy must be included in the brief. Price is about credibility and clarity. When used right, it enables price increases, defends premium offers, or explains why you’re both cheap and sustainable.”
How do you know if a price feels right?
“You can read it in behavior and response: conversion, complaints, returns. And most of all, understanding. If you can explain how a product is made – like Hästens’ handcrafted beds with local materials and eco-choices – price acceptance increases.”
“Value for money is always a moving target, but in the end, it’s about strategic choices with tactical consequences.”
Low prices are definitely important – especially highlighted in the grocery sector where price has gained political weight during tough economic times. At the same time, being expensive is acceptable – if one can convincingly explain the reasoning.
When does price work best?
“When it’s perceived as reasonable. It’s not about lowest price – it’s about avoiding friction. A concrete tip: avoid advertising products where you're clearly more expensive than the competition – say, 10–15% higher.”
Conversely, the stronger and more trustworthy the brand, the lower you can rank in price listings and still justify your price. Some home textile chains run endless promotions – but everyone knows it undermines future margin increases.
How important is credible pricing when Chinese giants like Temu and Shein grow rapidly with ultra-low prices?
“Unfortunately, we can’t rely on consumers to choose sustainability – even if they say they do. It’ll likely require EU-level regulation to change this. But there are examples in the cosmetics sector where eco and sustainable options have been highlighted and consumers responded positively, despite higher prices.”
Is low price a good way to build a brand in 2025?
“It can be just as smart to be expensive – as long as the price reflects substance and value. But to gain market share, new brands might benefit from attractive entry-level pricing to acquire new customers and feed the CRM. The strategy must be clear: is the price there to build a brand or to trigger a first purchase?”
5 Tips for Strategic Pricing
Jan Tallroth shares five practical ways to use price as a strategic communication tool without damaging your brand:
- Set the right price – not the lowest price.
Competitiveness isn’t surrender. The right price is based on logic, margin, and position – not panic.
- Know your Key Value Products.
Not every item carries the brand. Some do. Identify them – and handle them with as much finesse as a campaign idea.
- Target the right competitors.
Not all competition is relevant. Don’t compare yourself to the wrong store, audience, or world. Positioning requires selectivity.
- Keep it simple.
Start with smart base rules. You don’t need a data lab – you need understanding and tools built to support your strategy.
- Use data smartly – but humanly.
Let algorithms calculate – let humans lead. AI gives us speed, but the brand sets direction.
The Psychology of Price – According to Rory Sutherland
Jan Tallroth spent many years at Ogilvy, working with creative strategist Rory Sutherland, who argues that price isn’t just an economic decision – it’s psychological. He summarizes this in eight points:
- Price perception depends on context – not just the amount.
The same item can feel cheap or expensive depending on where, when, and how we encounter it.
- Value lies in the customer's experience – not in the product.
Perception is currency.
- There’s no objective “right price” – only prices that feel right.
And those feelings are influenced by unexpected factors.
- Convenience can be more compelling than low price.
Saving time, feeling safe, and ease are also price signals.
- Brand explains why something is worth more.
Context and storytelling drive price willingness.
- We don’t think our way to a purchase – we feel our way.
The feeling of the right price matters more than the price tag itself.
- Small signals – packaging, tone, transparency – affect how price is perceived.
It’s the sum of impressions that shapes perceived value.
- Sometimes, the opposite of a good pricing strategy is also right.
Raising prices – with the right rationale – can lead to both higher sales and a stronger brand.
