Positioning & Pricing: key terms, formulas and examples
Positioning is the place your offer holds in the customer's mind. Segment the market, craft a value proposition, then price to match: skimming, penetration or competitive.
Example
A low penetration price helps a new drink win share against giants.
Takeaway
Pick a segment, state your unique value, then set the price.
Key terms
- Value proposition
- Why a customer should choose your product.
- Market segmentation
- Splitting customers into groups with similar needs.
- Penetration pricing
- Launching at a low price to win market share quickly.
- Price skimming
- Launching at a high price, then lowering it.
- Competitive pricing
- Setting prices based on rivals' prices.
- Unique selling proposition
- The thing that makes an offer different.
Formulas
Markup(P − C) ÷ C × 100
Margin from markupM ÷ (100 + M) × 100
Markup from marginG ÷ (100 − G) × 100
Price from target marginC ÷ (1 − m)
Price with sales taxP × (1 + t)
Total revenueP × Q
Win rateW ÷ N × 100
Quota attainmentA ÷ Q × 100
Pipeline coverageP ÷ Q
Sales commissionR × c
Sale price after discountP × (1 − d)
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