Smarter Pricing: How to capture more value in your market

The tipping point of value

Brands create value for customers by developing products and services that customers need, and surrounding them with positive associations. Value can be defined as a combination of a set of product benefits plus emotional associations at an identified price level. See Figure 2.2.

Figure 2.2. Value (1)

The right price is the tipping point where the benefits outweigh the customer’s desire to keep money in their pocket. Smarter pricing means leveraging the value in the mind of the customer. The value equation provides six potential ways that superior value can be created in the mind of the customer:

1. Raising the actual ...