Pricing myths Flashcards
1
Q
Costs are basis for pricing
A
Pricing has to be based on customer perception of value (value based pricing)
2
Q
Small price changes have little impact
A
Small price changes have an extremely significant effect on company profitability
3
Q
Customers are highly price sensitive
A
Customers are frequently unaware of prices paid. They are much more sensitive to benefits and total cost of ownership
4
Q
Products are difficult to differentiate
A
Even commodities can be differentiated. Even irrelevant differentiation creates customer value and increases WTP.
5
Q
High market share equals high profits
A
Market share and profits are not correlated
6
Q
Managing price means changing price
A
Managing price includes improving systems, processes, skills and to communicate customer value
