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Pricing Strategy Handbook
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CH03 Value vs. Competition Pricing Positioning Worksheet

Answer in the Worksheet Writer and save as Markdown

This worksheet is based on KM046 (Value-Based Pricing) and KM047 (Competition-Based Pricing and Positioning). It does not include a new framework or a separate formula for calculating the price ceiling/floor. That procedure is not yet standardized in this Knowledge Source either.

Part 1. Value-Based Pricing (KM046)

  1. What meaningful problem does our product/service solve for the customer?

  2. Why do customers pay? (Not to compensate our internal cost, but what value does the customer actually feel?)

  3. What is the practical floor set by cost? (Even if you cannot pin down an exact number, note the range or constraints you currently know.)

  4. Regarding the range customers will accept (the ceiling boundary), what evidence have you gathered so far (customer research, market-response testing, etc.)? If you have not researched this yet, note that as well.

  5. For the business case to hold at that price range, how should cost and product composition be reviewed in reverse?

  6. If you want to set a higher price, what is the basis of value that customers would find acceptable — not “because our cost is higher”? (Product, service, channel, brand image, etc.)

Part 2. Competition-Based Pricing and Positioning (KM047)

  1. Among companies in the same product category, who are the “real competitors” that actually deliver similar customer value to the same customer segment? (Being in the same category does not automatically make them competitors.)

  2. What are the prices of the competitors defined above? Are you simply following the industry average?

  3. What signal (low-price / mid-price / premium) does our price convey to customers?

  4. If you are considering a low-price strategy, do you have the financial and operational capacity to accept a lower operating margin without economies of scale?

  5. If you are considering a premium strategy, do you actually have the product/service/customer experience/channel/brand in place to justify it?

  6. Instead of “how much should we charge?” what is our answer to “what value do we want to be remembered for, by which customers?”

Part 3. Honest Check on Unresolved Areas

  1. Is there a requirement to calibrate the price floor/ceiling into an exact number? If so, have you communicated to stakeholders that this worksheet (and this Knowledge Source) does not have a standard procedure for that?