While I was preparing for one of the assignments, I came across this article that I thought I could share with you. Tamar told us in class that “price is an indicator of quality, in the absence of other information”. Also, she said some people will not buy products that have a low price if the customers believe that these products have a low quality because some customers seek quality. So, this article talks about how Lululemon defends some of its prices. In fact, according to the article, “”The $100 basic yoga pant – is that a defensible price structure?” Cowen & Co. analyst Laura Champine asked Day after the chief executive said the company has upgraded the quality of its merchandise by using heavier, more durable yarns and better zippers”. Therefore, Lululemon is one of the companies that care more about people who seek quality not price. I found this article to be one of the most interesting articles that I have read. In my opinion, pricing strategy is one my favorite topics since we live in a world where there is an aggressive competition between companies. Pricing strategy helps understand some of these companies’ strategies. It is also great that when I learn something in class and then find a real world example. I am one of the people who seek quality more than price, and I believe that as long as the company can defend its price, then it has the right to have a higher price with a better quality than its competitors. I understand that Lululemon will expect to lose prospective customers who usually stay away from any high price due to their budget, but I am sure the company will still attract customers whose priority in purchasing a merchandise is how long they can use that merchandise not how much they pay for it.
Enjoy the article..