Pricing is one of the classic “4 Ps” of marketing (product, promotion, price, placement a.k.a. distribution).  The right pricing strategy communicates value to the marketplace, reinforces a company’s competitive positioning and brand strategy, and helps to maximize profits and increase company value.

Pricing strategy is a complex subject with many short- and long-term factors to consider. Pricing decisions should be made to support your competitive positioning strategy, your brand strategy, and your distribution strategy, relative to the existing market, while factoring in such operational considerations as cost of goods, and variable and fixed costs.

Pricing Strategy Value

Pricing strategy is often considered a mix of art and science. With business products, it’s far more science than art, as most business purchase decisions are not impulsive or emotion-driven; they’re decisions made based on cost and value.

In many B2B companies, marketers aren’t involved in pricing strategy. Many companies simply set their prices at their competitors’ level, or they use the old “cost plus” standard, where margin is added on top of their cost to determine the price.

One common recommendation following a thorough pricing audit is that a company should raise its prices.  This can lead to increased profitability and higher company value. Growth Panel enables you to facilitate pricing strategy sessions and deliver pricing recommendations. The results could translate into substantial revenue for your company.

Pricing Strategy Tools in Growth Specialist

  • Define Pricing Strategy:  Tie pricing strategy to your value proposition, competitive positioning and brand strategy. Set targets for profitability and match them to competitors’ prices and value propositions.
  • Determine Price Sensitivity:  Measure projected total sales, revenue and profits at different price points. Economists refer to this as “price elasticity,” which helps determine the price point for optimal profits and enables you to react quickly in response to price changes by a competitor.