Chapter 2
Economic Value
The Guiding Force of Pricing Strategy
An estimate of “value” is to pricing what an estimate of location is to navigation. Just as it is necessary to determine angles of the moon, the sun, and stars elative to the horizon to determine one’s location and desired destination, it is necessary to understand how customers benefit from a product or service in order to triangulate the way to a cost-effective value proposition. On the topic of value, we have always enjoyed the quote by Benjamin Franklin: “The bitterness of poor quality remains long after the sweetness of low price is forgotten.”
Understanding the value that different combinations of product features and services could create across ...
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