The 4 P’s of marketing, as taught in business school, pay very little attention to the most powerful P – PRICE!
In fact, while business schools cover THE NEED to price right, they do not teach HOW TO price right!
Prices are optimized when they meet the value perceptions of the customers with the 5 C’s of value creation:
- Comprehend Value to the Customer
- Create Value for the Customer
- Communicate Value to the Customer
- Convince the Customer to Pay for Value
- Capture Value with Strategic Pricing
These five components determine the wealth-producing capacity of any firm, and will drive maximum internal profits in the long run.
The Four Ps of Marketing — Product, Promotion, Place and Price — all must look outside of the firm and ask, “What do our customers value, and how can we increase that value?” Marketing executives must focus on the outside of the firm where the results are created, whereas cost accountants focus on the inside of a firm. Becoming better cost accountants is not going to help you create value for your customers, nor will it be much assistance in capturing that value through strategic pricing.
Atenga’s services are all about how to define that value and take the correct actions to design a pricing policy that will maximize business results based on that value.