Smarter Pricing: How to capture more value in your market

Chapter takeaways

• Over-pricing is rare and is normally corrected when sales disappoint. Under-pricing occurs significantly more often and damages brands when profits are foregone and products are positioned at a lower level in the market place.

• Setting the smart price is a three stage process that considers:

  - customer factors, such as value received, ability and willingness to pay;

  - competitive factors such as the impact the price will have on rivals and how it may influence their behaviour;

  - company factors such as the actual and desired role in the industry, the target positioning in the market place. Finally, a check to ensure the proposed price provides an adequate financial return.

• Three options exist for pricing over the life-cycle:

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