Customer Characteristics

In addition to a demand curve linked to segmentation, there are other management programs to improve pricing. Changes in price structure and level should reflect customer characteristics and your objectives. Three common purposes in shifting price higher or lower, and possible approaches are:

1. Fixing a “broken” list price. In many cases companies have let their list prices drift, with automatic price increases and across-the-board increases. This can manifest itself as a large sales discount that has little to do with interaccount differences. By now you are familiar with the shortcomings of the idea of list price, and you may agree that there is no reason to fix the list price—get rid of it! Replace it with a set of contextually determined baseline prices instead.