Differential Pricing

Learning from the price spread for pens

Why does the price of a pen vary so much? Functionally, they are all simply writing instruments for applying ink to paper. We could describe them as recording devices to capture our thoughts for sharing with others or reviewing at a later time, yet this type of a description would only inflate the overall price level of pens, it wouldn’t account for observed price variations.

While pens come in a variety of colors, shapes, sizes, technologies, these variations in type fail to account the variations in price. Surely more than functionality accounts for the More

Value Pricing Strategy

"We're not the cheapest, but...

In this highly competitive online marketplace, it can be difficult to persuade customers to buy from you when you offer a similar product to your opposition but with a higher price tag. And trying to beat competitors on price alone is a cut-throat business, very risky and not recommended. It attracts bargain hunters ready to defect to competitors for a better deal.

Using a valuePricing Strategy is a better proposition because it attracts loyal customers. Why do customers buy designer-labelled clothes and luxury cars? Why are those items More

7-step pricing process for small businesses

Program: Entrepreneur magazine's E-Biz Radio Show

Guest: Marlene Jensen, CEO ofPricing Strategy Associates
Go to www.ebizshow.com/ and click on the "EBiz Show Menu" to listen to this program from the archives.

Pricing psychology: Dealing with "too-low" prices

The price cut that KILLED sales!

A few months ago, we decided to test numbers that end a price. We were especially interested in "3," "7" and "9." We had a book for cat lovers that we got in a closeout sale for almost nothing, so we decided to use low prices in order to get the maximum number of orders as quickly as possible.

We therefore ran the price test at: $1.93, $1.96 and $1.97. More