Market/Technology Post #2 Pricing and Positioning for Entrepreneurial Marketers

Pricing and Positioning for Entrepreneurial Marketers
In this article from knowledge@wharton, according to Wharton marketing professor Leonard M. Lodish, "positioning and pricing are the most important entrepreneurial marketing decisions that you can make. They are the two basic issues that are critical not only for the marketing of an entrepreneurial venture, but for the venture itself.

Positioning a product [Product position, kotler, P259-261], Lodish suggested that entrepreneurs follow several key principles:
· Give someone a reason to buy your offering over the competition.
· What are the unique differentiating characteristics of my product or service
· Remember that humans cannot make decisions balancing more than two to four differentiating attributes at a time.
· Features vs. benefits. People buy benefits, perceived value. They don't buy features.
· Never underestimate the value of a good name and a good slogan.

In order to gain a competitive advantage, Lodish suggested use greater value/benefits instead of just lower price, as we know from text book, valued based pricing strategy.

Pricing.
Pricing is completely dependent on the rest of your marketing mix, especially positioning, said Lodish. That all customers what to know is what the price is; that customers begin to unbundle your services and perceive your product as 'just another bid'; that salespeople have to battle constant price objections. If that's true, you have a problem. Because you are not going to make the kind of money you want to make from that industry unless you get to the point where you are perceived as valuable enough - compared to your competitors - so that you can charge some kind of a premium."

Lodish recommend premium pricing [Value based pricing, Kotler, P 359-360]. Premium pricing means continually improved perceived value to customers vs. the competition. How do customers get perceived value? From everything they see about your company," which includes reputation, trust, design, brochures, sales force, web site, interactions with products, other customer's recommendations, packaging, and yes, pricing.

Pricing and positioning are the most critical marketing decisions for entrepreneurial ventures." The techniques, methods and concepts discussed during the session "should help you make these decisions more profitably.