Strategic pricing sets a product's price based on the product's value to the customer, or on competitive strategy, rather than on the cost of production.
This approach recognizes that people often make purchasing decisions based more on psychology than on logic, and that what is most valuable to the customer may not be what's most expensive to produce.
By creating strategic pricing policies, analytics, and processes, you can directly capture customer value and turn that value into shareholder value.
What customers are willing to pay for a product may be vastly more, or less, than a company would charge if it simply priced based on cost.
Discovering what consumers value about your product can allow a company to increase its price – or, alternatively, might even suggest that a new product has no chance of being profitable.
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