Summary:

Once the company has established the product or service, defined the market, and understands the target customer, a crucial next step is to develop the pricing strategy. Pricing is a discipline requiring a balance of art and science. The wrong pricing for a product or service could impact a company’s profitably and ability to convert customers. Pricing strategy considers the factors noted above as well as the company’s business value proposition and strategic positioning in a competitive market. Keep in mind how pricing may tie into business strategy, the company’s competitive advantages, and differentiators – competing on price alone is typical of businesses that would be considered commodities.