Pricing Strategy: Where to Position Yourself in the Market
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Does your actual positioning match your promise?
Schedule a meetingLearn about our pricing strategy consulting servicesPrice positioning refers to the place a brand or product occupies in the market’s price hierarchy, relative to a benchmark: the market median, the market leader’s price, or discount prices. Examples: “8% below market price,” “at the market leader’s price,” “15% above market price as a premium offering.” This is a strategic decision that is developed over time.
The Essentials in 6 Questions
Where your prices fit into the market hierarchy.
Executive Management, Marketing, Pricing.
A long-termdecision: repositioning takes 12 to 36 months.
At thestore level, broken down by category.
Provide the customer with a clear promise and ensure that decisions are aligned.
Assessthe current situation, set a goal, and plan for convergence.
Why Define a Pricing Strategy?
Because a clear pricing promise guides the customer and shapes all day-to-day pricing decisions.
- Communicate a clear promise that serves as a guide for purchasing decisions.
- Align operational decisions with a long-term goal that is consistent with the brand's identity.
- Stand out in a world where indistinct positioning is becoming less clear.
Real-world example: a promise of “5% below the market rate”
A home improvement retailer switched from "at market price" to "5% off KVI": net sales up 9% in 24 months.
A “5% below market” promise that pays off over 24 months
DIY chain · price adjustments on KVI products
in net revenue over 24 months following the repositioning of the price promise, despite a slight decline in average basket size.
Store sales over 24 months, backed by an independent price index
Average cart value, more than offset by the increase in traffic
Implementation will take 18 months to absorb 0.8 percentage points of the unit margin. This commitment is backed by an independent price index published quarterly; traffic is up 11% while the average order value is down 2%.
How do you determine your pricing strategy?
In four steps, from market analysis to planned convergence toward the target.
Analyze the market
Who are the competitors, and what are customer expectations?
Measuring the Existing Conditions
Your actual market position, by category and by store group.
Select the target
Consistent with the brand's identity, comprehensive, and tailored to each category.
Planning for Convergence
And continuously measure the difference between the actual position and the target position.
Our competitor price surveys measure your actual position; our pricing strategy consulting service defines the target and the path forward. See alsothe price index, KPIs, and the difference between strategic and tactical pricing.
The 3 Common Mistakes in Pricing Strategy
A positioning that is inconsistent, unstable, or contradicted by actual prices.
- Making choices that aren't consistent with the brand's identity: A premium brand that positions itself as a discount retailer without changing its product offerings loses its credibility.
- Changing too often: The customer can't remember a promise that keeps changing.
- Confusing advertised positioning with actual positioning: promising a 10% discount but offering only 3% undermines credibility.
Frequently Asked Questions
Short answers to the most frequently asked questions about price positioning.
What is price positioning?
Price positioning refers to the place a brand or product occupies in the market's price hierarchy. It is expressed relative to a benchmark: the market median, the market leader's price, or the discount price.
How long does it take to change your positioning?
It takes between 12 and 36 months for customers to notice and accept a change; a repositioning that is too abrupt creates confusion.
Category-based or overall ranking?
Ideally, both: the overall brand conveys the retailer’s identity, while category-specific positioning adds nuance (more of a discount focus on basic groceries, a higher-end focus on fresh or organic products).
How should a new brand position itself?
It’s better to have a bold, distinctive positioning than a middle-of-the-road positioning that lacks a unique identity—one that’s hard to make stand out in a saturated market.
Key Takeaways
- Pricing positioning compares your prices to a market benchmark.
- This is a long-term commitment that must be reflected in actual prices.
- It is measured continuously and changes gradually.
Do you want to choose and maintain your pricing strategy?
Booper measures your market positioning and alerts you if it strays from the target.
Let's talk about your pricing strategy →Learn about our pricing strategy consulting servicesYou might also be interested in these articles
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