01.

PRICE: ITS NATURE

Source: Pricing Strategy, Acierto & Acierto (2022)
Pricing is the only element in the marketing mix that produces revenue, the other element produce costs. -
Philip Kotler
01 Developing a pricing strategy
02 Determining the Right Price
03 Factors that Influence Price Determination

Price is the amount that consumers are willing to pay for a product.
Price determines the value of a good or service to the buyers and to the sellers.
Price means the money value of a product or service expressed in terms of peso and/or centavos. It is also the
amount of money needed in order to acquire a product or Service and its accompanying services. (Mutya, 2007)

Figure 1.1 The Commercial Exchange

Adapted from W. M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies (Boston: Houghton Mifflin
Co).

PRICE vs. COST

Price: The amount a customer pays to buy a product or service. It’s set by the business based on factors like
demand, competition, and perceived value. Price generates revenue.
Cost: The total expense a business incurs to produce or deliver a product or service. It includes materials, labor,
and overhead. Cost is an internal figure that affects profitability.
Price is what a business charges, and a cost is what a business pays.

Figure 1.2 Some Terms Used to Mean “Price”

Source: Adapted from Thomas C. Kinnear and Kenneth L. Bernhardt, Principles of
Marketing, 2nd ed. (Glenview, IL: Scott, Foresman and Company, 1986), 546.
Alternative Terms What Is Purchased
Price Most goods
Tuition College courses, education
Rent use of a place to live or use of equipment for a period of
time
Interest Use of money
Fee Professional services: for lawyers, doctors, consultants
Premium Insurance
Fare Transportation
Toll Use of a road or bridge, or long-distance phone rate
Salary Work of managers
Wages Work of hourly workers
FIVE STEPS IN DEVELOPING A PRICING STRATEGY
1. Identify the pricing objective. They may be:
Sales-based pricing – the firm is interested in sales growth and/or maximizing market share.
Profit-based pricing – the firm is interested in maximizing profit, optimizing ROI or securing early recovery of
cash.
Status Quo-based pricing – the firm seeks to avoid reasonable government actions, minimize the effects of
competitor actions, maintain good channel relations, discourage the entry of competitors, reduce demands from
suppliers and stabilize prices.

2. Align with the company’s price policies. A broad price policy provides procedures, rules and methods how to
implement a pricing strategy in certain situations. The following are common pricing strategies when a new
product is introduced to the market:
Market penetration pricing – uses low prices to capture/attract the mass market for a product or service.
Market skimming pricing – uses high prices to attract the market segment more concerned with product
quality, uniqueness, or status than the price.
3. Develop a price strategy. Price strategies are wats or some actions to accomplish the goals and objectives of
the company in gaining profit.
Cost-based pricing – the firm sets price by computing merchandise, services, and overhead costs then adding
the desired proft/mark-up. Also cost-plus pricing.
Demand-based pricing – the firm sets prices after researching consumer desires and make sure the range of
prices is acceptable to the target market.
Competition-based pricing – the firm sets prices in relation to what the competitor offers.

4. Implement the price strategy.

Terms of payments are price agreements, including discounts, the timing of payments and credit agreements.
Discounts are a reduction in the selling price given to customers for varying reasons:
paying in cash
performing certain functions/conditions
buying in large quantities
off-season buying

MORE PRICING STRATEGIES

Customary Pricing – Normally the price of the product will not be easily changed. The seller must consider
what majority could afford.
Variable Pricing – when price responds to cost fluctuations or differences in demand. The law of supply and
demand is the main consideration.
One-price policy – the seller will set one price for all customers, ensuring fairness.
Flexible pricing – based on the buyer’s ability to negotiate. The seller must meet the needs and wants of the
customers to ensure continued patronage or loyalty.
Prestige Pricing (Premium Pricing) –references price Quality Association by Hungarian-American Economist
Tibor Scitovsky, wherein he said that there is a tendency among consumers to associate higher prices with
higher quality.
Leader pricing – selling key items, called loss leaders, at low price (even below margin, sometimes cost) to
attract customers, hoping that they’ll buy regular priced items with it.
Multiple-unit pricing – offering discounts to customers who buy in multiple quantities. This also prevents
overstocking and maintain inventory, increase profit and promote growth.
Odd Pricing – the use of odd numbers as the last digit of the price to attract customers.
Price lining – when instead of setting one price for a single model of a product, the firm sells two models of
different quality at different prices.
Price Bundling – involves selling multiple products or services together as a package at a lower combined price
than if the items were purchased separately.
Unbundled pricing – involves offering products or services separately, allowing customers to pay for only the
specific features or items they need.
LOCATION-BASED/GEOGRPAHIC PRICING
FOB (Free on Board) Factory – the buyer assumes responsibility for shipping costs and any other expenses
once the product leaves the seller’s factory or warehouse.
Uniform Delivered Pricing – seller charges the same price for shipping to all customers, regardless of their
geographic location.
Zone Pricing – buyers within a specified geographic zone pay a uniform delivered price.
Base-point pricing – the cost of transporting the goods are based on an established base-point.

5. Adjust the prices if necessary. Changes in cost, competitive conditions and consumer demand require
changes in price.
List price – regular quoted price to customers.
Escalator Clause – a clause in the sale which allows seller to increase price due to reasons specified, such as
inflation, increased costs of production, changes in demand and supply, or external economic factors.
Surcharge – additional charges added to the total price.
Mark-ups – happens when the company raises prices because demand is unexpectedly high or costs are rising.
Markdowns – reductions from selling price.
Determining the right price
CUSTOMERS’ PERCEPTION OF THE VALUE OF THE KIND OF BUSINESS/FIRM

COSTS INVOLVED PROFIT OBJECTIVES

Factors that influence price determination

INTERNAL FACTORS
MARKETING OBJECTIVES
MARKETING MIX
STRATEGY
COST-PLUS PRICING
STRATEGY

EXTERNAL FACTORS
MARKET DEMAND
COMPETITION
ECONOMIC AND SOCIAL
CONCERNS

02. STRATEGIC PRICING

Source: Strategy and Tactics of Pricing, Nagle & Müller
If you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business. -
Warren Buffet

01 The Shortcomings of Traditional Pricing Methods

Coat-Plus Pricing
This method calculates prices by adding a fixed margin over costs.
Issue: It assumes sales volume is fixed and does not consider how price changes affect demand.
Example: If costs increase, businesses raise prices, reducing sales volume, which further increases per-unit
costs—a downward spiral leading to reduced profitability

Customer-Driven Pricing
This approach sets prices based on what customers say they are willing to pay.
Issue: Customers may not be honest about their willingness to pay and may undervalue innovative products.
Example: Many tech innovations (e.g., MP3 Players, digital cameras) initially failed in pricing tests but later
became mainstream due to effective marketing.

Share-Driven Pricing
Businesses reduce prices to increase market share, assuming volume will lead to long-term profitability.
Issue: Competitors can match price cuts, leading to price wars and eroding margins.
Example: Many consumer electronics companies reduced prices aggressively to gain share but later struggled
with profitability.

Value-Based Pricing
Prices should reflect the value provided to customers, not just production costs.
Companies should quantify the economic value of their product compared to alternatives.
Example: Apple’s premium pricing strategy—customers perceive the iPhone as more valuable due to brand
prestige, ecosystem, and innovation.

Proactive Pricing
Companies must anticipate market changes, competition, and customer behavior rather than reacting to them.
Example: Airlines use dynamic pricing based on demand patterns to optimize revenue.

Profit-Driven Pricing
The goal is to maximize long-term profitability, not just revenue or market share.
Companies should measure success by return on investment (ROI) rather than sales volume.
Example: Luxury brands like Rolex or Ferrari focus on high margins rather than high volume, maintaining
exclusivity and profitability.

03 Pricing as a Competitive Tool

A. Trade-Offs Between Price and Volume
• Increasing price reduces volume, but boosts margin per unit.
• Decreasing price increases volume, but lowers margin.
• Companies must analyze which strategy leads to maximum profitability.

B. The Role of Price Elasticity

• It is a key concept in pricing because it helps businesses determine the impact of price adjustments on
revenue & profitability.
• The key to understanding price elasticity is knowing whether a price increase or decrease will lead to higher
or lower total revenue and profit.
Formula:

If elasticity > 1 Elastic Demand (demand is highly sensitive to price changes).

If elasticity < 1 Inelastic Demand (demand is less sensitive to price changes).
If elasticity = 1 Unit Elastic Demand (proportional change in demand and price).

04 THE VALUE CASCADE MODEL

The Value Cascade Model is a key concept in strategic pricing and explains how businesses can create,
communicate, and capture value through their pricing strategies.
Rather than treating price as a standalone decision, the value Cascade shows that pricing is interconnected with
product development, marketing, and customer perception.
Companies that fail to align these elements often struggle with profitability, even if they have great products.

The core function of a successful firm is to create value; first and foremost, for customers, but also for the
internal constituencies that rely on the firm for employment and returns on investment.
Strategic pricing is about managing value, from its creation through its capture in price setting, in a coordinated
way that enables the organization to achieve a high, sustainable return from its efforts.
Picture:

A. Value Creation
✅ Definition: Developing products and services that offer real value to customers.
✅ Key Question: What makes your product better or different from alternatives?
✅ Example:
• Tesla creates value through electric vehicle technology, self-driving features, and energy efficiency.
• Starbucks creates value by offering premium coffee and a unique customer experience.
🔹 Common Mistake: Many companies develop products without understanding what customers truly value,
leading to unnecessary features and higher costs.
B. Value Communication
✅ Definition: Ensuring customers recognize and appreciate the value your product offers.
✅ Key Question: How well do you communicate the benefits of your product to justify its price?
✅ Example:
• Apple communicates value by highlighting innovation, security, and premium design in its marketing.
• Pharmaceutical companies justify high drug prices by emphasizing research, effectiveness, and life-saving
potential.
🔹 Common Mistake: If customers don’t understand your product’s value, they will focus only on the price and
choose cheaper alternatives.

C. Price Structure
✅ Definition: Adapting prices for different market segments or usage scenarios.
✅ Key Question: Should all customers pay the same price, or should pricing vary based on demand, usage, or
customer type?
✅ Example:
• Airlines use dynamic pricing, charging different prices based on booking time and seat availability.
• SaaS (Software-as-a-Service) companies use tiered pricing (Basic, Pro, Enterprise) to cater to different
customer needs.
🔹 Common Mistake: Companies that offer one price to all customers’ miss opportunities to maximize revenue
from premium buyers while keeping budget-conscious customers engaged.

D. Price Policy
✅ Definition: Setting clear guidelines for discounts, payment terms, and negotiations.
✅ Key Question: How do we manage pricing flexibility while maintaining profitability?
✅ Example:
• Amazon Prime offers subscription-based pricing to create customer loyalty.
• Luxury brands like Rolex never discount their products to maintain exclusivity.
🔹 Common Mistake: Companies that allow excessive discounts often train customers to wait for lower prices,
eroding long-term profitability.

E. Price Setting
✅ Definition: Choosing the right price that maximizes profitability while remaining competitive.
✅ Key Question: What price will generate the highest revenue and profit?
✅ Example:
• Netflix tests different pricing models in various countries before rolling out global price changes.
• Uber adjusts ride fares based on demand and availability (surge pricing).
🔹 Common Mistake: Setting prices based only on costs or competitors rather than understanding customer
value and willingness to pay.

F. Price Competition
✅ Definition: Managing competition without destroying margins in price wars.
✅ Key Question: Should we lower prices, differentiate, or focus on premium value?
✅ Example:
• Apple keeps premium pricing despite competition from cheaper Android phones.
• Walmart competes on low prices and high efficiency, while Target differentiates with quality and style.
🔹 Common Mistake: Companies that engage in price wars often erode their own margins without gaining a real
competitive advantage.

Stage Apple’s Strategy

Value Creation High-end design, innovative technology, brand prestige
Value Communication Marketing campaigns highlighting exclusivity & security
Price Structure Different models (Pro, Standard, Mini) for segmentation
Pricing Policy No discounts, trade-in programs instead
Price Setting Premium pricing justified by perceived value
Price Competition Competes on innovation, ecosystem, and status—not price

05 Collaboration Between Marketing, Sales, & Finance

Marketing: Understanding Customer Value & Market Positioning

Defines value propositions and pricing strategies based on market research.
Conducts customer segmentation and competitive pricing analysis.
Ensures pricing is aligned with the brand’s perceived value.
 Without marketing’s input:
Pricing may be cost-driven rather than value-driven.
The company may fail to justify price premiums, leading to unnecessary discounting.

Sales: Managing Customer Expectations & Negotiations

Provides real-time feedback on price sensitivity from customers.
Negotiates pricing and justifies value-based pricing to customers.
Helps prevent over-discounting by demonstrating product benefits.
Without sales’ input:
Pricing strategies may not reflect customer objections or competitor tactics.
Sales teams may feel disconnected from pricing policies, leading to unauthorized discounting.

Finance: Ensuring Pricing is Profitable & Sustainable

Analyzes cost structures, margins, and profitability.
Evaluates the financial impact of discounts, promotions, and price changes.
Ensures that pricing aligns with long-term financial goals.
Without finance’s input:
Sales and marketing may set prices too low, eroding margins.
Companies may fail to assess the long-term impact of pricing decisions.

Conflict Marketing Sales Finance Collaborative Approach

Setting “We should price “We need prices “We need to maximize Conduct value-based pricing
Price based on customer That help us profitability and ensure analysis—marketing defines
Levels perception and close costs are covered.” value perception, sales
competitive Deals quickly.” provides customer feedback,
positioning.” and finance ensures margins
remain profitable.

Conflict Marketing Sales Finance Collaborative Approach

Discounting “Limited discounts “Discounts are “Too many discounts Establish structured
Strategies To protect brand necessary to reduce profit margins discount policies—finance
image and attract and and create sets profitability limits, sales
perceived value.” retain instability.” use discounts strategically,
customers.” and marketing ensures
discounts don’t weaken brand
perception.

Conflict Marketing Sales Finance Collaborative Approach

Price “Fixed pricing “Flexibility is “Too much Implement tiered pricing—marketing
Flexibility maintains brand needed to price defines premium vs. budget tiers, sales
in credibility and win flexibility applies structured negotiation rules, and
Negotiations differentiation.” deals against leads to finance approves minimum acceptable
competitors.” revenue pricing thresholds.
inconsistency.”

Conflict Marketing Sales Finance Collaborative Approach

Promotional “Promotions “Promotions “Excessive Use limited-time, high-value promotions
Pricing & should drive help close promotions —marketing designs high-impact
Special customer deals quickly hurt campaigns, sales targets high-value
Offers engagement and increase profitability leads, and
but not sales volume.” and can lead to finance evaluates ROI on promotions.
devalue the price wars.”
product.”
 Conflict Marketing Sales Finance Collaborative Approach
Pricing for “New products “Introductory “The price Apply penetration pricing vs. skimming
New should have a pricing should should ensure strategies—marketing determines brand
Product premium price be lower to we recover positioning, sales gauges customer
Launches to establish attract early R&D and acceptance, and finance ensures cost
brand adopters.” production recovery.
leadership.” costs.”

03.ECONOMIC VALUE
The Guiding Force of Pricing Strategy
Pricing is not just about setting a number—it is about understanding economic value from the customer’s
perspective.

01 What is Economic Value

Economic value refers to the benefits that a product or service provides to a customer, relative to its cost. A
company must price based on the value customers perceive and experience, not just production costs.
✅ Key Concept: Customers will never pay more than the perceived value of a product.
🔹 Why Does Value Perception Change?
• Customers compare products based on what they gain versus what they pay.
• Perceived value (economic) can shift based on information, competition, and context.

Example: A $3 bottled water may seem expensive at a grocery store but reasonable at an airport due to
contextual value differences.
✅ Key Takeaway: Strategic pricing requires managing the relationship between value and price, ensuring the
price aligns with what the customer believes the product is worth.

02 How to Estimate Economic

Economic value estimation (EVE®) is a structured method used to determine the maximum price that a well-
informed customer would be willing to pay for a product or service.
This method is essential because pricing should be based not just on costs or competition but on the actual
value customers perceive and receive.
Total Economic Value = Reference Value + Differentiation Value

• Reference Value: The price of the customer’s next-best competitive alternative (NBCA).
🔹 Steps to Identify a Competitive Reference Value:
1. Research competitor prices – Gather data on what customers pay for similar products.
2. Normalize data – Account for volume discounts, service levels, and regional differences.
3.Analyze real-world purchasing behavior – customers may not always choose the cheapest option but the one
with the best perceived value.
✅ Key Takeaway: The reference product may not always be a direct competitor but rather what customers
currently use to meet their needs.

• Differentiation Value: The additional value that the product offers compared to the alternative.
🔹 Types of Differentiation Value:
1. Performance Improvements – Better durability, efficiency, or speed.
2. Cost Savings – Lower maintenance, operational, or lifetime costs.
3. Convenience & Accessibility – Easier use, better availability, faster service.
4. Brand & Reputation – Trust, prestige, and customer loyalty advantages.
✅ Key Takeaway: Companies should quantify differentiation value in monetary terms to justify pricing.
✅ Key Takeaway: The total economic value represents the highest price a rational, well-informed customer
would pay.
Example: The price of a new iPhone is influenced by the cost of competing Android phones (reference value)
plus the perceived benefits of Apple’s ecosystem (differentiation value) or it’s prestige.

03 Monetary vs. Psychological Value

Monetary value is objective and measurable, based on:
• Cost savings (e.g., energy-efficient appliances reduce electricity bills).
• Increased revenue (e.g., software that boosts productivity).
Example: A fuel-efficient car may cost more upfront but save the driver thousands in gas costs over five years.

Psychological value is subjective and based on perception, influenced by:

• Brand image (e.g., luxury handbags command high prices).
• Convenience (e.g., fast delivery services like Amazon Prime).
• Social status (e.g., high-end watches).
Example: An iPhone has monetary value (durability) and psychological value (brand prestige, ecosystem
loyalty).

✅ Key Takeaway: Successful pricing strategies combine monetary and psychological value to justify prices and
increase willingness to pay.

04 The High Cost of Shortcuts in Value Estimation

🔹 Why Many Companies Get Pricing Wrong
Some businesses take shortcuts in pricing by:
❌ Relying only on cost-plus pricing (ignoring customer perception).
❌ Assuming all customers have the same willingness to pay.
❌ Setting prices without testing real market response.

Example: Many failed tech products were priced based on development costs, not what customers saw as
valuable (e.g., Google Glass).
✅ Key Takeaway: Avoid pricing shortcuts—analyze customer behavior, competitive landscape, and market
trends to ensure optimal pricing.

05 Value-Based Market Segmentation

🔹 Why Market Segmentation Matters

Different customers value products differently. A one-size-fits-all price ignores potential revenue opportunities.
✅ Solution: Value-based segmentation—grouping customers based on what they value most, not just
demographics.

Steps for Value-Based Segmentation

Step 1: Determine Segmentation Criteria Identify customer needs and behaviors.
Step 2: Identify Discriminating Value Drivers What features do different segments care about most?
Step 3: Assess Operational Constraints Can we serve all segments efficiently?
Step 4: Create Primary & Secondary Segments Divide customers into logical groups.
Step 5: Develop Detailed Segment Profiles Describe each segment’s preferences.
Step 6: Establish Pricing Metrics & Fences Set rules for who gets what price.
✅ Key Takeaway: Segmentation prevents underpricing premium buyers and overpricing budget-conscious
customers, maximizing revenue

Conclusion: Why Economic Value is the Foundation of Pricing Strategy

1. Customers pay based on perceived value—not just cost.
2. Value perception is dynamic and depends on competitive alternatives.
3. Successful pricing combines monetary and psychological value.
4. Pricing shortcuts lead to lost revenue and weak positioning.
5. Value-based segmentation maximizes pricing effectiveness.

04. PRICE AND VALUE

Communication
A well-developed pricing strategy is ineffective unless customers understand the value of what they are paying
or.
01 The Role of Value Communication in Pricing
Why is value communication critical?
• Customers will not automatically recognize the value of a product, especially when it has complex or
innovative features.
• Buyers often default to price comparisons when they do not fully understand a product’s differentiation.
• Value communication shifts customer focus from price alone to total benefits received.
✅ Key Takeaway: Customers make decisions based on perceived value—pricing strategies must include
effective messaging that highlights this value.

02 How to Adapt Value Messaging to Different Products

The way companies communicate value must be tailored based on two key factors:
1. The type of value delivered: whether the product provides economic (monetary) benefits or psychological
benefits.
2. The level of customer involvement:
Low involvement – Routine or habitual purchases. - Minimal decision-making effort.
High Involvement – Significant financial or emotional investment. - Requires careful evaluation of options.
Value Messaging Framework

1. Value messaging must align with product type— high involvement vs. low involvement, economic vs.
psychological benefits matter.
2. Low-involvement purchases require quick, memorable messaging, while high-involvement purchases need
detailed justifications.

03 How to Adapt Value Messaging to Different Products

1. Low-Involvement, Psychological Benefits
📌 Example: Nike Sneakers
Nike’s “Just Do It” campaign does not emphasize material quality or price. Instead, it inspires an emotional
connection by associating the brand with performance, determination, and success.
🔹 Best Messaging Approach:
✅ Use brand storytelling rather than technical details.
✅ Create aspirational marketing that links the product to customer identity.

2. Low-Involvement, Economic Benefits

📌 Example: GE Energy-Efficient Light Bulbs GE markets its LED bulbs by quantifying the savings:
• “Uses 80% less energy and lasts 10x longer than traditional bulbs.”
• “$150 savings over the lifetime of each bulb.”
🔹 Best Messaging Approach:
✅ Emphasize cost savings in clear, measurable terms.
✅ Use comparisons to competing alternatives (e.g., “Lasts 10x longer than regular bulbs”)

3. High-Involvement, Psychological Benefits

Example: Weight-Loss Programs
• Consumers invest heavily in weight-loss solutions for emotional and self-image reasons.
• Celebrity endorsements (e.g., Oprah Winfrey for Weight Watchers) help establish trust and credibility.
• Trials and testimonials show social proof of success.
🔹 Best Messaging Approach:
✅ Focus on personal transformation stories.
✅ Use real testimonials and expert endorsements.
✅ Offer trial memberships to reduce hesitation

4. High-Involvement, Economic Benefits

Example: Caterpillar Heavy-Duty Construction Equipment
Caterpillar markets its high-end excavators by demonstrating long-term cost efficiency:
• “Consumes 15% less fuel, saving operators up to $10,000 annually.”
• “Engine lifespan is 2x longer than standard models, reducing replacement costs.”
🔹 Best Messaging Approach:
✅ Highlight operational cost savings and durability.
✅ Use direct comparisons to industry-standard models (e.g., “Lasts twice as long as competitors”)

03 Key Strategies for Conveying Value

A. Competitive-Reference Effect
Customers evaluate a price relative to competing alternatives rather than in isolation.
✅ Solution: Frame the price by comparing it to a lower-value alternative rather than just listing the cost.
Example: A large combo meal costs P20 more than a regular meal. Compare the price to single-item purchases
instead of the regular combo:
• Instead of: “Make it Large for Just P20 Extra.”
• Use: “Get 50% More Fries & a Bigger Drink for Less Than Buying Them Separately”

B. Switching-Cost Effect
• Customers hesitate to switch if they fear hidden costs or learning difficulties.
✅ Solution: Minimize perceived risks by offering free trials, guarantees, and easy transition support
Example: Mobile phone brands now allow users to transfer their data from an old phone to a newer one they
bought using apps or features that are built-in or available for download.

C. Difficult-Comparison Effect
• Customers struggle to compare complex offerings, which can make higher prices appear unjustified.
✅ Solution: Provide clear side-by-side comparisons of key benefits over alternatives.
Example: A new cancer treatment drug is 30% more expensive than the existing standard drug.
✅ Solution: Publish clinical trial comparisons showing:
• Higher survival rates (+15% after 3 years).
• Fewer side effects (reducing hospitalization by 25%).
• Shorter recovery time (patients return to work 2 weeks earlier).

04 Behavioral Factors Affecting Price Perception

A. Price-Quality Effect
• Customers often assume higher prices mean higher quality.
✅ Solution: Reinforce premium pricing with strong branding and messaging.
Example: A medical device manufacturer successfully defended a higher price for drug-coated stents by
showing how fewer repeat surgeries justified the premium.

B. Expenditure Effect
• Buyers evaluate larger expenses more critically than smaller ones.
✅ Solution: Break high costs into smaller, easier-to-justify amounts.
Example: Subscription models such as leasing expensive industrial machinery instead of selling it upfront
reduce price sensitivity

05 Challenges in Multi-Stakeholder Pricing Decisions

In B2B transactions, purchasing decisions are rarely made by a single person. Instead, multiple stakeholders
from different departments are involved, each evaluating price based on their own priorities.
This makes value communication more complex, as companies must tailor their pricing messages to address the
concerns of different decision-makers

✅ Key Takeaways: A single pricing argument won’t work for all stakeholders—companies’ must communicate
customized value propositions to each group.
Successful B2B pricing requires a multi-layered value communication approach that speaks to the concerns of
all decision-makers involved

Conclusion: The Role of Value Communication in Pricing Success

1. Even the best pricing strategy fails without clear value communication.
2. Customers must recognize differentiation value to justify premium pricing.
3. Behavioral biases shape customer willingness to pay.
4. B2B purchases require customized value messaging for multiple decision-makers.