MMR Strategy Group

Of all elements in the marketing mix, pricing is uniquely important. Price may determine if a consumer considers the purchase of a good or service. Price may convey quality to customers. Price may also provide a means to segment a market between different quality and service levels.

Perhaps most importantly, price is a powerful lever with unparalleled influence on profits and market share. For most businesses, a price change of a few percentage points creates a much larger effect on operating profits.  There are few activities a company can undertake to increase profitability as quickly as a price increase, but price increases can also affect sales and market share.

Surveys often underestimate the impact of price on purchase decisions and satisfaction, in part because consumers often process price differently than other aspects of a product or service. For example, a consumer interested in a restaurant may use price to eliminate certain restaurants from consideration, and then may evaluate other attributes of the restaurant (such as food quality) on a more continuous basis.

MMR views pricing as a complex and nuanced concept.  Our pricing research assumes that consumers evaluate price within a very broad context, ensuring that our guidance does not exclude any of the key elements of price that drive purchase behavior.

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