Strategic Considerations
The use of premium pricing as either a marketing strategy or a competitive practice depends on certain factors that influence its profitability and sustainability. Such factors include:
- Information asymmetry (e.g., when buyers have no independent basis to test claims of "exceptional quality" for a particular product or service -- assuming the concept is well-defined to begin with);
- Market status as a Luxury good or a Superior good; and
- Market dynamics such as the level of competition and entry barriers.
The disadvantages of this pricing strategy includes:
- not possible with commodity goods
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Famous quotes containing the word strategic:
“The strategic adversary is fascism ... the fascism in us all, in our heads and in our everyday behavior, the fascism that causes us to love power, to desire the very thing that dominates and exploits us.”
—Michel Foucault (1926–1984)