push / pull pricing

Push and pull pricing are two different pricing strategies.

A push pricing strategy is used when a customer lacks necessary information about a service, for example about preferences. Pricing must therefore be set in such a way that the existing information asymmetries are reduced. This can be done, for example, through an aggressive pricing policy. The aim is to transform a latent customer need into a conscious need.

With a pull pricing strategy, on the other hand, the pricing is selected in such a way that a service is independently demanded on the market. This is the case if the pricing corresponds to the customer’s individual perception of benefit or if the service offered has a sufficiently strong (brand) image in the market.

Under certain conditions, both pricing strategies can be interlinked. An optimal push-pull mix depends on market conditions such as customer experience, product type or the arrangement of distribution channels.

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