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was going for Kshs. 80,000 shillings. And that is after a 20 per cent offer. Not cheap. The guy removed a debit card to pay. The guy at the till threw a spanner in the works. Card payments attract an extra 5 percent charge. The guy was miffed and walked away. He got a good reason not to buy. As most Kenyans do, I got interested in that drama even though I had nothing to do with it. I just wanted to help. I called for the manager. I asked her a few questions: Aren’t you cheapening your products by asking for a 5 percent extra charge for a varied form of payment? Why not factor in that charge in the price? Why give a 20 percent offer and charge 5 percent for a payment option? When I worked at Unga Holding, distributors favored competitors’ due to trading terms. I went to one distributor to ask why. He told me they buy and sell a competitor’s bale of flour at 1,250 shillings. They get a monthly rebate of 75 shillings as distribution allowance and another 25 shillings for self-collection. That totals to 100 Shillings per bale. Why is it that these rich people want to wriggle out every coin with a bargain from a poor hawker? These are the same people who give five hundred shillings as a tip. These are the same people who may give one hundred thousand as tithe to a church. These are the same people who walk into a restaurant and pay 2,000 Shil- lings for a meal. I was bemused. What was the difference with us? There was no difference. We sold and delivered our products for 1,175 shillings and distributor was supposed to mark-up 75 shillings per bale when selling. Ideally that would give them 100 shillings same as competition. Why then were they unhappy? The competitor was giving them a lump sum at every end month. They psychologically felt they were getting some income from competition and not from us. We changed to self-collect and gave end month rebates. Sales went up by 25 percent. At Bidco Land O’ lakes (BLOL), a similar scenario played out. A distributor called me and told me they prefer competitor trading terms than ours. At BLOL, end of month rebates was credited into their customer accounts. That meant we paid them in form of products and not hard cash. That is good for the company because the conversion time and risks are borne by the distributor. When we changed to start paying rebated in cash, distributors were excited and motivated. Price discounts also go a long way in offering psychological satisfaction. Customers always get more satisfaction when they pay a discounted rate. Discounts must nevertheless be graduated based on volumes and credit days. Cash and volume customers should get best price. Discounts and free things are good, but they should have an extent. Being able to afford something and paying for it satisfies a psychological need of worthiness. People want to feel they have sacrificed something for a reward. When I worked in Kisumu for EABL, selling beer, customers always wanted a discount on Tusker Malt and complained that beer was generally expensive. But there was a reprieve, why not drink a cheaper beer like Senator? When I asked one customer that question, he retorted: “but that is for the financially disabled.” Price as a sales and marketing tool is versatile and multipurpose. When used wisely price can trigger more sales, price can increase perceived value, and price can arouse psychological satisfaction. Whichever way you use price, and pricing tools, make sure customers feel they have received a bargain. Make them feel they have won a deal. Make them feel they have paid less than the true worth. Conversely, make them feel valued. And that is irrespective of affordability of your products, or the economic profile of the customer. Herman Githinji is a seasoned marketing practitioner and law graduate from the University Of Nairobi. Currently the CEO Bidco Land O’Lakes Company that makes quality Animal Feeds using American Technology. You can commune with him on this and related issues via email on: