Pricing

Price competition lowers prices to win market share, often driving volume but risking margin erosion. Nonprice competition differentiates through product features, brand, service, and experience to create defensible advantages and sustain profitability.

Price competition can boost volume in the short term but often compresses margins, conditions customers to expect discounts, and triggers price wars. This guide explains the mechanisms behind price competition and offers strategies—differentiation, value-based pricing, and segmentation—to sustain profitability.

A clear, practical guide to cost‑plus pricing: how it works, the exact formula, how to set markups, and when this strategy helps—or hurts. See examples, advantages and drawbacks, and how to avoid common mistakes like ignoring demand, value, and competitive dynamics.

The article “Pricing Principles” discusses foundational strategies for setting effective prices that balance customer value and business profitability. It covers key concepts like value-based pricing, competitive analysis, and price elasticity, offering insights on how to develop a pricing strategy that aligns with your business goals and market dynamics.