Make decisions about pricing in relation to competitors in the market.
1. Draw the model as shown on the front.
2. Define the position of your competitors on the model.
3. Set your own strategic goal.
I. maximum current profit: mostly achieved with premium strategy, few competitors and strong brand drive.
II. product quality leadership: high value pricing, high quality & more expensive components.
III. maximum sales growth (similar to low price strategy): low price to capture market share immediately, drop price even more when market grows.
IV. survival objective: buying work or dropping price to get more market share, use good value for money or economy pricing when new competitors move into the market or customers change their needs.
4. Is there a free spot in the market with little competition, is this better than your current strategy?
Before market introduction.
Find a pricing strategy in the market.
Know product and competitors.
Quick overview of pricing options and variables.
Create a brand identity that fits your pricing strategy.