From the course: Pricing Strategy: Value-Based Pricing
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Segment your customers for fencing
From the course: Pricing Strategy: Value-Based Pricing
Segment your customers for fencing
- In every market, you find customers who are more price-driven than others. Instead of deciding whether you want to serve the price-driven segment, the value-driven segment, or the premium segment, you can use pricing to address each of them with a different offer. What you need to do to achieve this is fencing, to put the fence between the different segments you are serving. Let me give you a simple example. A movie theater offers reduced ticket prices to students. Here, the student ID is a fence between one segment, the students, and all other segments. Another good example for fencing are the coupons that you find on your phone. Because the convenience buyer, the one who appreciates the convenience, wouldn't bother with the coupons. She or he just goes to the store and buys the orange juice and pays the full price. However, the price seeker, a different segment of the market who wants a low price, he or she would actually care about the coupon, drive to the store, and redeem the…
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