Many consumers seek low prices when shopping for apparel. Serving this segment can yield significant sales volume at the expense of lower per-unit profitability. Customers in this segment will sacrifice quality for affordability and are less loyal to specific brands.
1- Bundled Pricing Strategy
The bundled pricing strategy can work well. When multiple bundled products are sold together at a single low price, it can convey additional cost efficiency for budget shoppers.
Focus on cost control for this pricing strategy. Continually push prices lower over time. Rely on economies of scale, driven by the relatively high volume of low-profit pricing strategies, to squeeze out small per-unit profits.
2- Targeting The Right Consumer Market
The apparel industry consists of designers, manufacturers, distributors, and retailers dealing in clothing and fashion accessories targeted at different consumer segments. Many niches are mostly saturated, creating fierce price competition among some brands as well as brand-image competition among others.
Apparel companies can employ a number of pricing strategies to differentiate their brand and gain competitive advantages in the marketplace. Understanding these options can help you develop the ideal pricing strategy for your own clothing business.
3- Market Value Of Your Apparel Product
In the luxury tier of the apparel market, consumers’ price sensitivity often is more closely correlated with a brand’s image rather than inherent product quality or market value. Apparel products are closely tied with self-expression and social status in consumers’ minds.
Consumers in this segment are often more concerned with the apparel’s social image than its durability or quality. This strategy focuses on marketing and brand positioning as the main driver of price structure. Push prices well above your costs in this segment, keeping them just as high as those from competitors. It may seem counter-intuitive, but lowering prices in this segment actually can detract from a luxury brand’s image.
4- Value Pricing Strategy
The value pricing strategy sits somewhere between the budget and luxury segments. The key to value pricing is to strike a balance between cost and quality.
Value shoppers are not willing to sacrifice quality for extremely low prices, but they also are not willing to pay more than apparel is worth simply for a popular brand logo. Consumers in this segment look for clothing and accessories that will last several years or more. Durability is a prime concern. These consumers prefer leather and wool over polyester and plastic, for example.
Use basic market pricing techniques to set prices for this strategy — do not work too hard to push prices low, and do not over-inflate prices for brand equity. Rather, source high-quality materials and apply a standard markup to each product, staying within the general price range of similar apparel products.
Here is a video that explains the price points of apparel brand manufacturing.