Pricing Models & Strategy
Pricing is a crucial commercial lever as price is the only "P" in the marketing mix that generates revenue
Pricing needs to be a concious, pro-active commercial process as opposed to a reactive, cost-plus exercise. Price model strategy is a central marketing management task.
Sustainable pricing must reflect and help to reach the financial goals of the organization, match the realities of the marketplace and support or strengthen the product's or service's positioning.
Price is the only revenue generating element in the marketing mix (or Porter 4 P). In balance with all cost elements, the competitive situation and real customer needs the right price can be a big competitive advantage.
Market and product strategy among other analysis does define the pricing strategy. Readily available pricing scenarios can prevent or limit the impact of surprises in the market place.
Pricing is very telling - it sends tales of quality, reputation and entrepreneurial creativity to the markets and customers. Consistent prices are a branding element and communication vehicle that spells out the health of a company. Price consistency might also mean to lower the price on an outgoing product while replacing a new one at same price levels.
Pricing is a commercial instrument, a crucial piece of communication and impacts both branding and product success. From Penetration Pricing, Competition Pricing and Value Pricing to Bundle Pricing or Premium Pricing - there are plenty pricing models that can fit any market situation.