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Smarter Pricing: How to capture more value in your market by Tony Cram

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Life-cycle pricing

Convention offers ‘competitive pricing’ as a strategy where prices are pegged to comparable offers from rivals. This is a reactive approach to pricing. It is not differentiating and may not maximize value capture. See Figure 9.1 for three alternative life-cycle pricing strategies:

  1. High remaining high. This is the premium product strategy where the launch price conveys aspiration, luxury or high quality and the continuing price strategy maintains the premium level. An example would be the lager, Stella Artois, brewed by Interbrew (part of Inbev) and now sold in 80 countries. Interbrew has launched the brand in markets outside its home country of Belgium. In each of these markets, Stella Artois has a premium position. For example, ...

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