Strategic Pricing

Strategic Pricing is the systematic process of setting a price that attracts the mass of target buyers. It involves looking at the alternatives that buyers have when making their purchasing decisions, as well as at the level of protection that the company’s new offering has against imitation. Many companies first test the waters of a new product or service by targeting novelty-seeking, price-insensitive customers. Only over time do they drop price to attract the mass of target buyers. In Blue Ocean Strategy, however, it is critical to take the reverse course by setting a strategic price from the outset that will attract the mass of target buyers. See Price Corridor of the Mass.