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Customer-oriented pricing is highly relevant in today's market. It is a strategy where the price of a product or service is determined by the perceived value to the customer, rather than the cost of production or the market average. This approach allows businesses to capture more value, especially in markets where customers are willing to pay a premium for superior products or services. It also helps in building a strong customer relationship as it takes into account the customer's perspective and their willingness to pay. However, it's important to note that this strategy requires a deep understanding of the customer's needs, preferences, and perceived value.
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Customer-Oriented Pricing – Pragmatists will buy from the market leader to keep the whole product costs low. They are willing to pay a premium of nearly 30% over competition for this. Therefore, a suitable pricing strategy is to price the product above the price of the two reference competitors chosen. Vendor-Oriented Pricing – Vendor-Oriented pricing is based on the cost incurred from goods to sales. However, while crossing the chasm, this is not a sound pricing strategy. Distribution-Oriented Pricing – Companies must price their products in a way that is not too high for a distributor to sell. Ensure that high rewards are built-in for the distributor to make it worthwhile to sell a disruptive innovation to their existing customers.
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How can the most cutting-edge start-ups fail? Start-ups fall to their death in the deep chasm that separates early tech adopters and the pragmatic mai...
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