We want to create the conditions so that

[robiulhasan]

High type customers want to buy the high quality/more expensive products
Low type customers want to buy the low quality/less expensive products
High type customers do not want to buy the less expensive products
Low type customers do not want to buy the high quality products.
Pricing strategy works alongside product development to ensure these conditions across your product suite.



You want to make sure high type customers prefer buy cell phone list ing more expensive product (they perceive it as more valuable) than buying less expensive alternative.



And...



You want to maintain or grow market share for low type customers.

“You want to make sure high type customers prefer buying more expensive product (they perceive it as more valuable) than buying less expensive alternative.”

4 Variables to Separate Customers
There are four essential variables we can change to successfully separate customers. They are:

Quality of the less expensive product
Quality of the more expensive product
Price of the less expensive product
Price of the more expensive product
How should we manipulate these variables to maximize profit?



Remember, our goal in pricing strategy is to ensure that the high customers prefer spending more on the high quality items than spending less on the low quality items.