In a nutshell
PRICING is probably of the most technical aspect of Marketing. Good pricing strategies are value-based (transformational), connected with the market demands and the brand (purpose, positioning). Not considering a value-based approach will be ….
In the Marketing Canvas
In the Marketing Canvas, we have identified 6 main categories for building your Marketing Strategy: CUSTOMERS, BRAND, VALUE PROPOSITION, JOURNEY, CONVERSATION and METRICS. Each of these categories, have 4 dimensions which means that a total of 24 dimensions (6 by 4) are defining your Marketing Strategy.
PRICING is a one of the 4 dimensions of the VALUE PROPOSITION category.
How do you use it?
Pricing Strategy is an highly complex and important topic. Summarising the impact of your pricing in one question might simplify too much the situation. Let’s look at this question from a direction perspective and then further analysis what will certainly be required.
In the Marketing Canvas Method, we look at PRICING from a contribution to your global strategy. Indeed, let’s remember that you are playing in a defined Market where the average price for a defined product or service is set and known by the buyers. You will certainly agree with me if I tell you that you know the price of a coffee on a terrasse or a cinema ticket or trendy sneakers? Why? Because you have already experienced these products. First think we do when we go abroad is to compare prices for certain products with our home prices.
Having said that, the objective of your strategy is probably to create more value (at least to protect it), therefore you should move up on the economic value curve (remember Market and Economic Value ).
PRICING is linked to Customer/Client perceived value of your product and service. If they consider it as a commodity, they will look after the cheapest. If they understand the difference(s) you propose compare to competitors, they might accept to pay the same or even slightly more. If they believe that you offer an experience (Starbucks) or something totally transformational (luxury fashion), they might even not care about how much they pay.
A good PRICING strategy (Accelerator) is a strategy that is:
Value-Based (moving up on the economic value curve);
Take the market conditions into account;
Amplify your BRAND’s PURPOSE and POSITIONING (if you are a game-changer, your price should be changing the game);
Reinforce your VALUE PROPOSITION’s FEATURES and EMOTIONS.
Not respecting these criteria will create a BRAKE.
Is the PRICING of your Value Proposition helping you achieve your goals?
Market and Economic Value, Laurent Bouty, https://laurentbouty.com/blog/2019/marketing-canvas-market-and-economic-value