Do you take a strategic approach to pricing your products? Do you make pricing decisions in reaction to competitors or are price levels carefully determined to take advantage of strategic opportunities in the marketplace? Are prices based on customer value or on internal cost?
Pricing not only impacts short-term profitability, but you also need to consider the longer term effects of the reactions of customers as well as competitors to price changes. Pricing is a ‘marketing tool’ and impacts your branding and positioning.
Few companies are strategic and proactive about price setting. As a result, they see lower profits and do not fully take advantage of pricing as an important element of their branding and positioning efforts.