What Pricing Says About You

Two stories caught my attention this Easter weekend.

The first was an International Herald Tribune article about the plight of the humble Japanese beef bowl. Long considered a staple meal of the journeyman worker, the broiled-beef-and- rice bowls from the big-three bargain restaurant chains Yoshinoya, Sukiya and Matsuya have had their prices slashed from about 400 yen to 280 yen over the past four months -- in response to Japan's faltering economic recovery and as a desperate measure to hang on to their customers.

Granted, price wars were made for this: two or more competitors engaged in a deadly game of 'chicken', eyeballing each other over successive price cuts designed to decimate profits and drive the weak out of business.

But the hard-won gains come at a price. Infuential economist Noriko Hama has warned that "if we all get used to spending just 250 yen for every meal, then meals priced reasonably will soon become too expensive. When you buy something cheap, you lower the value of your own life."

Now I'll confess I've wrestled with that last sentence from the moment I read it -- even posted a question on LinkedIn to seek other viewpoints -- but I suppose that taken in context, it may not seem quite so ridiculous as it initially appeared: One could argue that sustained price wars will spark a deflationary cycle and indirectly lower workers' wages through some trickle-down effect ... which in turn may lower one's perception of contribution to society.

But I'm still straining to wrap my head round the logic of that argument (you can tell I'm no economist). So let me instead think aloud about the subliminal messages a price point can send out about a product or service:

The perception people have of a product is often dependent on the first price they associate with that product -- which in turn exerts a psychological influence on the actual benefit they derive from its use. In his book Predictably Irrational, professor Dan Ariely writes about experiments in which students were better able to complete word puzzles after drinking an energy drink that was regularly priced. When other students consumed the drink after buying it at a discounted price, they were never able to do as well at the word puzzles as those who had paid the full price.

So brand champions: think twice, think three times before you allow your brand to be irrationally (or predictably) depositioned by a price reduction. The move can retain your competitive advantage in certain circumstances. But too many trigger-happy marketers yank the price down, then are surprised when the 'value gap' is stretched and snaps. Instead of thinking, what a great deal, customers start wondering, what's wrong with it?!

So why not focus on delivering value through a standout brand experience. You may be able to sell for more. The difference between the price that you can sell, and the price that you eventually do sell at, is the value of your brand.

This is, in fact, the cornerstone of the second article which caught my attention this weekend. It was a snippet really, in TIME magazine, about restauranteur and chef Shoichi Fujimaki who charges US$110 for a bowl of his ramen (yes, that's US dollars, there are too many zeros in the yen equivalent) which takes three days to prepare. Asked to justify his price, Fujimaki explains that "it's my 25 years of experience distilled into one bowl".

I don't know how Fujimaki-san is doing, with his ramen going at 35 times more than the beef bowls around his restaurant. But I'd love to make it up to Tokyo one day for a slurp. It must be one heckuva (brand) experience.

The Disciplined Brand

Today, let's talk dolphins.

If you set out to develop a dolphin attraction, what would you do to build a brand and your business? You'd put up a slick show, and train your dolphins to do fancy tricks, right? You'd let your customers feed them, swim with them, pet them. You'd provide lifevests, snorkelling gear, and towels. You'd engineer lots of photo opportunities -- heck, even deploy a staff photographer and flog huge colour blow-ups that cost an arm and a leg.

Discovery Cove in Orlando, USA (http://www.discoverycove.com/) does almost all of this -- and puts together an amazing customer experience. My family visited a few years ago, and I gladly (well, kinda) paid more than $1,000 for the privilege. I didn't think I'd ever find another dolphin interaction experience to match it.

I was wrong.

Monkey Mia (http://www.monkeymia.com.au/site/) is the best-known attraction within the Shark Bay World Heritage Area in Western Australia and a 10-hour drive from Perth. Wild Indo-Pacific bottlenose dolphins have visited the beach there since the 1960s when Alice Watts first began feeding them from her boat, encouraging them to take fish from her hand. Later on Wilf Mason and his family lived at Monkey Mia for many years, enduring the hardships of a remote coastal lifestyle while managing a humble caravan and camping area which has developed into the Dolphin Resort of today.

Unlike commercial dolphin attractions the world over, Monkey Mia has a vigorously observed policy of "no touching the dolphins". (A dolphin's head contains a highly developed organ called the melon which is the source of its acute sense of echo-location. Imagine the magnified sensation of a hundred strangers' hands pawing your private parts every day, and you'll understand why this rule was instituted.) Visitors are allowed to stand no deeper than shin-deep in the water and wait for the dolphins to approach. No sunscreen is allowed on legs because it can irritate the dolphins' eyes. And when it's time for their feed, everyone is asked to move out of the water except for volunteers selected at random and supervised by Department of Conservation (DEC) officers.

Remember, these are wild, untrained dolphins. There's nothing to coerce them to come to the shallows of the beach at Monkey Mia. But come they do, of their own free will -- because a dedicated team has, over the years, worked hard to earn and keep their trust. (Brand stewards, take note: What are you doing to collaborate with your internal constituents to present an aligned brand story?) Four adult female dolphins and their offspring, spanning three generations, are fed up to three times each morning to lunchtime, with no more than 1/3 their daily intake of fish (this is to prevent them becoming dependent on handouts, and encourage them to continue hunting for their own food).

The dolphins' visits are amazingly reliable -- their attendance record is 99.6% over the past 10 years. Talk about a consistently delivered brand experience.

I was at Monkey Mia two weeks ago, and came away with a new-found respect for these intelligent animals -- not to mention heaps of admiration for the way the guardians of this amazing attraction have taken the firm and narrow contrarian path to develop their brand with tremendous discipline, working tirelessly every day of the year to care for the dolphins and convert visitors to brand ambassadors.

Two different business models on opposite sides of the globe. One a slick, well-run but commercialised customer experience. The other a more basic, more restricted yet more authentic interaction with dolphins. Each has its admirers. But the smaller attraction, I believe, is in sync with the global trends of simplicity and sustainability. The stewards of Monkey Mia instinctively understand that human beings tacitly seek to be part of something larger than ourselves. Interacting with dolphins in this way allows us to achieve a little of that.

Monkey Mia 1, Discovery Cove 0.