Smarter Pricing: How to capture more value in your market

Fight back with benefits

Competitors can, however, fight back. Jet Blue – launched in February 2000 in New York – does not offer the lowest fares on the US market, yet succeeds through a benefit-led advertising message to consumers. It trades on such features as its in-flight comforts, 24 channels of DirecTV and industry-leading punctuality. In July 2004, Jet Blue delivered its fourteenth consecutive quarter of profit and a 14.1 percent operating margin.

The answer is neither to cede nor attack on price. Rather it is to identify critical benefits that customers forego with the value player and to build a proposition based on these. Every value player takes away some benefits to fund its price platform. Identify what the customer will miss. Strengthen ...