Last time we explored product strategy and creating customer value. This time, let's tackle the next critical P: Pricing.
Pricing isn't just about covering costs - it's about communicating value and positioning your brand in customers' minds.
Engagement Message
Recall a time you judged a product’s quality by its price—what led you to that conclusion?
Here's the psychology behind pricing: customers don't just see numbers, they see signals. A higher price can suggest premium quality, while a lower price might imply bargain or budget positioning.
Your pricing strategy shapes brand perception.
Engagement Message
Why might luxury brands actually avoid discounting their products?
Two main pricing approaches exist: cost-based and value-based pricing. Cost-based adds a markup to your costs. Value-based prices according to the benefit customers receive.
Smart marketers increasingly choose value-based pricing.
Engagement Message
Which approach do you think Apple uses for the iPhone?
Value-based pricing requires deep customer understanding. If customers save $500 monthly using your software, you could price it at $200 monthly and they'd still see tremendous value.
The key: quantify the value you deliver.
Engagement Message
Can you think of a service where you'd gladly pay more because of the value it provides?
But you can't ignore competitors. If rivals offer similar products at $50, pricing yours at $200 needs strong justification through superior benefits or brand positioning.
Competitive pricing research is essential homework.
Engagement Message
How do you typically compare prices when shopping for something important?
