Tool | 2013

Harvard Business Review's Go to Market Tools: Pricing for Profit

by Thomas Steenburgh and Jill Avery

Abstract

What price is right? Figuring out the best price for your product or service can be nerve-wracking. Your new product launch or marketing campaign's success—perhaps even your career advancement—may hinge on the price you choose. So how do you select a price that's attractive to customers and profitable for your company? This tool will help you confidently arrive at the most profitable price—by guiding you through a series of questions: How much does it cost to produce each product you sell? How are your competitors' products priced, and how valuable is your product or service relative to those competitors? How many customers will buy your product at various price points? What price maximizes your profitability? HBR's Pricing for Profit will help you turn your raw data into a clear analysis that will inform your pricing decisions. HBR's Pricing for Profit tool includes: a brief tutorial that walks you through the process and calculations; instructions for gathering your own pricing data to plug into the tool; and the results of your data analysis in a PowerPoint to share with your colleagues. The tool provides a systematic approach to determining the most profitable price for your product or service.

Keywords: marketing; Quantitative analysis; Tools; pricing; Profitability analysis; Pricing strategy; Marketing Strategy; Marketing;

Citation:

Steenburgh, Thomas, and Jill Avery. Harvard Business Review's Go to Market Tools: Pricing for Profit. Tool. Harvard Business Review Press, 2013. Electronic.