In the past, pricing policies were based on little more than intuition. That's beginning to change. Unfortunately, it is a problem with which few managers are well-prepared to deal. Only recently have leading business schools taught pricing as part of their curriculum. Wrong, says Mark Bergen, an associate professor of marketing at the Graduate School of Business at the University of Chicago.
Pricing is the moment of truth.
All of marketing comes to focus on the pricing decision. Pricing can help a company attain its other marketing objectives. Therefore, pricing strategy should be tied to the business strategy of the company, and the program should be supported with a focused plan of implementation. Pricing enables the marketer to segment markets, define products, create customer incentives, and even send signals to competitors. For example, if the company wants to enter a crowded field, such as the credit-card business, it may opt for a penetration strategy.