Marketing Reading: Pricing Strategy

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This Core Curriculum Reading introduces the fundamentals of getting price right. First, it introduces value pricing, which requires a detailed understanding of the true economic value (TEV) that a firm's product creates for a specific customer. Value pricing also requires a decision to divide that value between the firm (providing the firm its incentive to sell) and the customer (providing the customer with an incentive to buy). After covering the key elements of the value-pricing approach, the Reading explains the concepts of price customization, consumer sensitivity to price, and the impact of price on the organization's profitability. Readers also learn how both quantitative research and managerial judgment are used to make optimal pricing decisions. For classroom use in higher education, this Reading is accompanied by a Teaching Note, test bank, and exhibit slides.
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