Australian-made products hold a special place in our market. They symbolise quality, trust, and support for local jobs. Yet Bunnings chief executive Mike Schneider recently revealed a tougher truth. The retailer is finding it harder to sell Australian-made goods because many shoppers, without clear value based pricing and marketing, see the price and walk away.
This raises a bigger question for all businesses producing or selling local goods. Is the higher price really the core issue, or is it something deeper? Right now, the gap between price and perceived value is widening. Consumers want to buy local, but only when the offer feels fair. That is the real paradox at play.
>Download Now: Free Infographic on What is Value-Based Pricing
The Cost Reality Behind Australian Manufacturing
It is no secret that manufacturing in Australia costs more. Labour expenses sit among the highest in the OECD. Energy rates still fluctuate, and supply chain costs remain sticky even as global freight prices ease. These structural costs flow directly into final prices.
Imported goods, meanwhile, benefit from lower wages, cheaper utilities, and economies of scale. Many manufacturers overseas also operate in clusters where material and component suppliers sit close together, reducing logistics costs. Australian producers rarely enjoy that advantage.
Therefore, competing purely on price is unrealistic. Even when Australian local products offer higher quality or better standards, the cost gap remains hard to ignore. That is why shifting the conversation away from price and toward value through value based pricing and marketing is essential.
Capability Building Programmes For Pricing & Sales Teams!
Why Sentiment Isn’t Enough to Sell Australian Local Products
Australians want to support local. Polling consistently shows that shoppers prefer Australian local products when the price is similar. However, sentiment weakens the moment the premium becomes too large. In a cost-of-living environment, emotional loyalty often loses to household budgets.
Campaigns like Back Australia help raise awareness and spark pride. But they do not automatically change purchasing behaviour. When shoppers stand in an aisle comparing two near-identical items, one local and one imported, the decision often comes down to what feels like a reasonable trade-off tied to value perception.
Patriotism influences intent, not final choice. That is why relying on emotion alone won’t shift volume. The value must be obvious, immediate, and credible through stronger value based pricing and marketing.
In short, customers want to see clear reasons that justify the higher price. When the value proposition for Australian-made products is strong, shoppers pay more without hesitation. When it is weak, they default to the cheaper option.
What should a Marketer know about Pricing? 📚 Podcast Ep. 61!
Making Local Products Worth the Extra Cost Through Value Based Pricing and Marketing
The core challenge is not that customers refuse to pay more. It is that they do not always understand why they should. When the benefits feel vague, the price premium feels unjustified. This is a sign that the value based pricing and marketing story is not clear enough.
To close that gap, businesses must focus on tangible, measurable value drivers. Durability, performance, and after-sales support are strong selling points when proven, not merely claimed. Ethical and environmental benefits also matter, but they must be specific and verifiable to reinforce the product marketing value proposition.
Pricing and Marketing to Enhance the Value Proposition and Improve Perception
1. Smarter Packaging and Product Design
Packaging is often overlooked, yet it directly shapes value perception. Cleaner designs, better materials, and information that highlights product advantages all influence willingness to pay. Even small improvements can strengthen the value based pricing and marketing story and justify a premium.
Design also plays a role. If a product looks more refined than its imported equivalent, the higher price feels logical. When it looks identical, customers assume it should cost the same.
2. Operational Efficiency and Cost Discipline
Although Australia’s structural costs are real, many businesses still have room to improve internal efficiency. Lean processes, better forecasting, and automation reduce waste. Improved supplier relationships can also help stabilise input costs for Australian local products.
Efficiency gains rarely eliminate the price gap with imports, but they can narrow it enough to strengthen value based pricing and marketing. The leaner the operation, the easier it is to reinvest savings into product improvements or sharpen the value proposition for Australian-made products.
3. Clear, Compelling Value Communication
Customers cannot value benefits they cannot see. That is why clear, simple communication is essential for strong value based pricing and marketing. Explain what makes the product better. Show how long it lasts. Demonstrate the environmental impact. Be transparent when local production leads to higher quality.
Australian-made needs to move beyond the logo. It needs a product marketing value proposition backed by proof. When customers understand the “why”, the “how much” becomes easier to accept.
Value Based Pricing and Marketing for Competitive Australian Local Products
1. Value-Based Pricing Over Cost-Plus
Cost-plus pricing hides the real question: what is the customer willing to pay? Value-based pricing answers that question directly. It prices according to the benefits delivered, not the hours or materials consumed. This protects margins and aligns pricing with perceived worth.
2. Versioning or Tiered Product Lines
Offering multiple versions helps reach different value segments. A premium Australian-made tier can anchor a lower-priced option, making the range more accessible while still supporting the higher-value product.
3. Strategic Price Anchoring
Anchoring your Australian-made product against a cheaper import can actually strengthen its position. When the differences are clear and meaningful, customers naturally compare based on value rather than price alone.
4. Bundling and Augmented Value Offers
Bundled warranties, faster service, or extended support add layers of value that imports struggle to match. These elements make the price premium feel justified and improve loyalty after purchase.
Pricing Recruitment For Pricing Managers!
Strengthening Product Marketing Value Proposition
Executives must look beyond temporary promotional levers. Now is the time to rethink product positioning, brand storytelling, and value based pricing and marketing. Align the organisation around a single question: What makes our Australian-made product undeniably worth paying for?
This requires investment, discipline, and a willingness to challenge long-held assumptions.
Pricing teams play a crucial role. They must quantify the specific value drivers that imports cannot offer, strengthening the value proposition for Australian-made products. They must model new structures that close the gap between cost and value perception. And they must test willingness-to-pay across different customer groups to find the optimal price points.
Their job is to make the commercial case for Australian local products, backed by data, insight, and clear value logic.
〉〉〉 Get Your FREE Pricing Audit 〉〉〉
Applying Value Based Pricing and Marketing Effectively
Supporting Australian-made only works when value and price align. Customers want to buy local, but the offer must make sense. That is your opportunity to apply value based pricing and marketing effectively.
For business leaders, rebuild your product and pricing strategy around value, not sentiment. Lead the shift. For pricing teams, turn local pride into measurable commercial results. Show through pricing that Australian local products can win on merit, not emotion, and communicate a clear value proposition.
Now is the time to rethink how your products create value and how your organisation backs that promise. And if you want practical support, reach out. We can help sharpen your pricing, strengthen your product marketing value proposition, and build a strategy that makes Australian-made worth choosing every time.
For a comprehensive pricing strategy to prevent revenue loss in your company, download a complimentary infographic on What is Value-Based Pricing.
Are you a business in need of help aligning your pricing strategy, people and operations to deliver an immediate impact on profit?
If so, please call (+61) 2 9000 1115.
You can also email us at team@taylorwells.com.au if you have any further questions.
Make your pricing world-class!
