Companies Misunderstand Price


Share on LinkedIn

Most buyer and seller companies misunderstand price. Buyers, because they want the lowest price (price is all), and sellers because they do not understand the value of price. I am going to discuss Price as a business improvement tool and Price as an investment, for all companies. Companies are sometimes sellers and sometimes buyers.

Have you ever in your planning process thought of improving your business (read profits)? What do you think about first? You think about increasing market share or of cutting costs. How many have your prime strategy of increasing price. How many think of adding value and price, or differentiating and price, or telling a better story to skew the price in your favour? I’ll warrant, very few!

And when buying or selling do you ever think of price as an investment rather than a cost? How do you talk about value and the value of your product as an investment? You will buy this suit and use it for 5 years, versus this one which is a throwaway? Or this car will cost me less because maintenance is less and resale value is high? Or this car will be worthwhile because it enhances my image and self esteem?

So, rethink and use price as a prime strategy for improving business and profits, and for thinking of what you are buying and selling as an investment.

If you do this, you can graduate to thinking beyond price as the only way to sell, and think Customer value and value creation.

Republished with author's permission from original post.

Gautam Mahajan
Gautam Mahajan, President of Customer Value Foundation is the leading global leader in Customer Value Management. Mr Mahajan worked for a Fortune 50 company in the USA for 17 years and had hand-on experience in consulting, training of leaders, professionals, managers and CEOs from numerous MNCs and local conglomerates like Tata, Birla and Godrej groups. He is also the author of widely acclaimed books "Customer Value Investment: Formula for Sustained Business Success" and "Total Customer Value Management: Transforming Business Thinking." He is Founder Editor of the Journal of Creating Value ( and runs the global conference on Creating Value (


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here