The price of a product or service is the other half of the brand promise—what the purchaser gives up to receive what the brand promises to deliver. Your price should reflect the brand promise—think of it as assurance pricing. Volvo’s pricing should reflect the additional safety features in the car. If it didn’t cost more, how safe could it be?
Competitive intensity typically predicates pricing decisions. In general, companies are torn between desire to raise prices to increase profits and reluctance to raise prices for fear of losing sales. However, by focusing on habit formation, marketers can use pricing as part of an overall strategy to shape long-term behaviors that resist competitive incursions.
The goal of pricing in the ...