Technology
The technology sector remains profitable even though prices for software and hardware fall significantly over time, relative to the value they generate. The choice of pricing strategy and pricing model helps these companies share value:
- Choice Game, whichenables them to offer tiers of service, designed to encourage customers to self-select and trade up
- Value Game, which allows market leaders to communicate and charge a premium price that customers still accept
- Power Game, which balances the delicate buyer-seller relationships in sophisticated concentrated markets.
Success depends on thoroughly understanding the appropriate pricing game – based in market characteristics – and on realizing that the game may change as companies seek to reshape their markets or respond to market forces.
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