Fall is well underway, and some mountains are already showing snow. You may have seen signs for ski and skate sales starting to show up on the drive to work, a sure sign that ski season is inching closer and closer. As you may know, each year companies like Dalbello, Smith, Lange, Rossignol, K2, and Salomon continue to dominate the ski market. One name that might have missed your radar, however, is DPS. Founded in 2005, DPS is still a relatively new ski company, and has a very small market share compared to the other ski giants. Don't pass them by though. They've positioned themselves as one of the most sought after brands for elite skiers in the world. The catch? Be ready to leave the bank in tears, because they have a price to match the reputation.
Famous skier Piers Solomon skiing on DPS skis
From the twenty-two varieties of skis listed on their website, the average price for a pair of skis is $1,116.39. To compare that, Rossignol advertised thirty-five new varieties of skis this year and averaged $807.14 a pair. That works out to a difference of slightly more than $300.00 between the two brands. However, both brands offer high quality ski equipment, so why is DPS much more expensive?
The DPS logo, branded atop all their skis
The answer may be in their pricing strategy. Before we look too deep into this though, we should look at the foundation of all pricing strategies: why consumers should want to buy your product over others. What it comes down to is perceived value. This can be described as the benefits the consumer thinks they will receive from the purchase of the product, balanced against any costs that are associated with it. A simple way to think about it is to put it into an equation. Value equals the benefits of a product minus its costs. Or:
Value= Benefits - Costs
If a consumer determines that the costs outweigh the benefits of the product, then they will most likely not to buy it. However, assuming that the difference between the two variables is positive, companies must then assess the next obstacle in getting consumers to purchase their product; price.
In terms of pricing, value can be thought of as perceived benefits divided by price. Or in an equation:
Value= Perceived Value/ Price
Moving back to our example of DPS skis, a good phrase to keep in mind is, "the higher the price, the higher the quality." Its a common phrase that tends to be at the heart of how most consumers think. This is especially true if the item they are looking for is a shopping product or specialty product. DPS may be trying to tap into this collective feeling that most consumers hold, and to attract a target market that prefers quality over affordability. This strategy of setting prices high, with the assumption that consumers will perceive the product as having higher quality is referred to as, "prestige pricing." Because skiing tends to be a wealthier sport, where your target market is more apt to be well-off, this pricing strategy may work well. As the price rises, the value of the product to consumers is likely to increase as well.
The line up of some of DPS's premium skis
Recall back to our second equation though, and you will see price is only half the battle in establishing value in consumers minds. Perceived value is the other half. To establish that, companies need to be able to show what their product has to offer, and more specifically why it is able to. DPS boasts cutting edge technology in their skis such as pure prepeg carbon fiber sandwich construction, rockered shaping with sidecut, and the first 120mm powder pintail. All of their skis are developed by professional skier and experienced designer Stephen Drake. DPS has the quality to back up their high price for the skiers they are targeting. The question is, will consumers bite? Time will tell if this young company's aggressive price strategy will be a formula for their success.
For more, click on this video made by Patagonia featuring famous skier Piers Solomon shredding some powder with a pair of DPS skis.
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