The Strategy and Tactics of Pricing, 5th Edition

Chapter 6Price Level

Setting the Right Price for Sustainable Profit

Price setting is challenging, requiring the collection and analysis of information about the company’s business goals and cost structure, the customer’s preferences and needs, and the competition’s pricing and strategic intent. Even the best marketers struggle to synthesize these data into coherent, profit-maximizing prices. The price setting task is all the more challenging because of its importance to the organization—there are few decisions that have greater impact on financial performance. Whereas a good pricing decision can improve profits dramatically, a poor one can invoke a competitive response that quickly devolves into a price war that destroys profits for all. ...