From the course: Pricing Strategy Explained

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Pricing variables

Pricing variables

From the course: Pricing Strategy Explained

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Pricing variables

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- Some of the things that I want to make sure that you can understand from going through this exercise. Number one is the sensitivity of your pricing strategy to your customers. Now, if your customers have low sensitivity to the price, that essentially says you have a large degree or a lot of flexibility in how you charge for the price. They've a high sensitivity to it, then you're going to be a lot more constrained in terms of what price you can actually charge. It's also going to help you determine what your pricing model is and so this is going to say whether we should be cost-based, should we go market-based or should we go value-based and then where in that chain, how much flexibility do you have in which to use different pricing strategies even within those models, as well. This model will also tell you have aggressive that you can get with your pricing strategy. How much can we actually bid up that pricing so we can…

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