The Strategy and Tactics of Pricing, 5th Edition

Chapter 4Price and Value Communication

Strategies to Influence Willingness-to-Pay

In Chapter 2, we argued that developing an effective pricing strategy requires understanding and quantifying the value of your offer in order to set profit-maximizing prices across segments. Yet even the most carefully constructed value-based pricing strategy will fail unless your offer’s value, and how it differs from that of competitors’ offers, is actually understood by potential customers. Customers who fail to recognize your differential value are vulnerable to buying inferior offerings at lower prices supported by loosely defined performance claims. The role of value and price communications, therefore, is to protect your value proposition from competitive ...