Dynamic pricing allows retailers to adjust their prices in real-time to align with market conditions, ensuring they attract buyers while maximizing revenues. Price reflects perceived value.
When launching two water bottles at the same manufacturing cost, the dynamic pricing strategy illustrated that one product, the filtration bottle, significantly outsold the other due to perceived value.
The need for a product to align its price with its target market's perceived value is crucial; lowering the price of the 'no-spill' bottle led to a sales increase.
Prices serve as a communication tool to convey value to consumers. A brand must understand its market to set prices that reflect value rather than just cost.
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