The Strategy and Tactics of Pricing, 5th Edition

Chapter 2Value Creation

The Source of Pricing Advantage

Strategic pricing harvests the fruit of a company’s investment in developing and delivering differentiated products and services to market. Each stage of the Strategic Pricing Pyramid, introduced in Chapter 1, plays a critical role in maximizing profitable and sustainable revenue. At the foundation of the pyramid, in what should be the first task of any strategic marketing organization, is gaining a deep understanding of how products and services create value for customers—the essential initial input to pricing strategy.

For many firms, the pricing harvest is less than bountiful because they fail to understand and leverage their potential to create value through their products, services, ...