The pricing strategy represents the cornerstone of a company’s price management.
The pricing strategy sets the framework for all tactical pricing decisions. The relevance of the right pricing strategy cannot be overstated. Since the pricing strategy is key to long-term existence on the market, determining the pricing strategy is a task for top management and should be deeply embedded in the overall strategy of a company. When developing a pricing strategy, it is important that the planned strategy is implementable in the market in the long run and that the latter can be flexibly adjusted in case unexpected market changes occur. Before defining a pricing strategy, it is therefore necessary to determine one’s own price positioning (premium provider vs. cost leader) and business model, and to take competitive behavior into account for ultimate strategy formulation.