“Why Five”?!!

In this modern era of growing technology, everyone is talking about “ Wi Fi”. But in marketing is it necessary to think “Why Five”?
Yes. Many FMCG companies have started focusing upon the price point of Rs 5. This strategy is mainly used to expand the penetration of that particular category, which customers generally feel that the product is not essential. E.g.: Maggi and the second one is to involve in or to be more competitive than other brands which helps company to attain the price sensitive customers E.g.: Pepsodent

The pioneers of this strategy are the tea manufactures like Brooke bond. The history happened when coca cola launched it’s “the paanch strategy” which becomes a huge success. This campaign roped in all the marketers to fix Rs 5 for their brand. Eventually the amount spend by the coca cola and Pepsi in promoting this strategy helped other players who had priced at Rs 5.

The other reason behind these strategy might be that Rs 1 and Rs 2 are limited to certain brands like candies and shampoos. But Rs5 brings in more category of products. Even I feel that marketers mainly use this price point to first change the buying behavior of the customer, then slowly drag them to the next stage of price stages. It happened in the case of Scotch Brite where Rs 5 scrub pad was not available now because its price is Rs 6 that comes with a new package.

Some of the brands that HLL sells for Rs 5 are Pepsodent, Pond's Talc, Pond's Cold Cream, Rin, Taaza, Fair & Lovely, Clinic Plus and Lux.

Source: business line