Price within the 4P

Price strategy and negotiation

Price strategy is often mentioned as negotiation. Companies are guessing the price they think customer is willing to pay and finally add a % to give space for negotiation. This strategy is known as „rule of thumb“. You will not find this as a strategy published in literature but very often used in practices. That’s why we will now take a look at what 4 P is about.

Marketing mix or 4P

The marketing mix that is the 4P : Product, Placement, Promotion and finally Price. All 4P require that you know the WHY. Why is the customer buying the product or service you provide – or why should he.

Understand the WHY

To me this is the most important question. As the answer is between the lines you need to listen carefully. Direct question don’t work out but when you get positive feedback it can include some details. It also works out to check how users see the product when using. What needs to be easier to use, what needs to be faster? Is quality or lead time critical for his business? Are there any other topics customer is referring too.

Price-performance-ratio

The answers you’ll get are going to help at all 4P within the marketing mix. Especially for pricing. Your customer will judge your price comparing with the products attributes like quality, service, lead time, shopping experience or image. Your pricing strategy will be successful and sustainable if it is traceable to your customer.