Can you find a way to differentiate through pricing? Offering the lowest price in the market gives your customer confidence in making purchasing decisions. They do not need to look elsewhere. However, it is advisable not to differentiate solely through pricing, otherwise the offering is likely to become a commodity.

When and how to apply Price:

Price differentiation has proven to be an effective method of monetizing value even in stable markets. A differential pricing strategy is more important than ever as inflation rises.

Pricing is a practice that distinguishes itself from the competition. In contrast to many business processes in which organizations seek to "iron out" differentiation, price setting embraces variation. The inconsistencies and disparities between customers, products, and services enable businesses to tap into a broad spectrum of willingness to pay. And as the primary profit driver, price is a subject that warrants increased focus.

Many businesses are surprised to learn that their consistent margins are a sign of suboptimal pricing, which is typically the result of a cost-plus or one-size-fits-all pricing strategy.

Well-known companies that use this pattern are Toyota and AIDA.