Contextual Pricing: The Death of List Price and the New Market Reality

Chapter 9

Segmentation, Context, and Time

Now I am become Time, the destroyer of worlds.

—THE BHAGAVAD GITA

One size fits nobody.

—THE NEW YORK TIMES, ARTICLE ON CLOTHING SIZES, APRIL 24, 2011, PAGE A1

Context and segmentation both stem from the same truth: not every person and every situation is equal. Therefore, both contextual pricing and needs-based segmentation try to base market actions on what is happening in the customer’s mind. They both also take into account the question of price structure and price level. So what is the difference between them?

Differences between Context and Segmentation

The main difference is that contextual pricing focuses on the impact of the customer’s environment, adding the element of causation and a framework ...