Once you've chosen your [[revenue stream|revenue stream(s)]], you need to decide on the specific [[pricing]] tactics. Pricing can broadly be categorized into two types: [[fixed pricing]]and [[dynamic pricing]]. [[fixed pricing|Fixed pricing]] means the price is predetermined and generally not open to negotiation. Common fixed pricing tactics include: * [[cost-plus pricing|Cost-plus pricing]]: Calculating the cost to produce the product and adding a standard markup for profit. This is simple, but it often ignores the full value perceived by customers and market conditions. * [[value pricing|Value pricing]]: Setting the price based on the perceived value to the customer segment, rather than the cost of production. This requires deep customer understanding gained through discovery. * [[volume pricing|Volume pricing]]: Offering lower prices per unit for larger quantity purchases to incentivize bulk buying, often used when economies of scale exist. Semiconductor manufacturers often use this tactic. [[dynamic pricing|Dynamic pricing]] means prices fluctuate based on market conditions, demand, time, or negotiation, rather than being static. Examples include: * [[negotiation pricing|Negotiation (bargaining)]]: Prices are determined through direct negotiation between the buyer and seller. * [[yield management|Yield management]]: Prices are adjusted, often automatically, based on inventory and demand, common for perishable assets like airline seats or hotel rooms. Prices might increase as availability decreases or decrease close to the "expiration" time to maximize revenue from remaining inventory. * [[real-time market pricing|Real-time market pricing]]: Prices are established dynamically based on supply and demand in real-time, like stock market prices. * [[auctions|Auctions]]: Price is determined through competitive bidding (e.g., eBay). Choosing between [[fixed pricing]] and [[dynamic pricing]], and the specific tactic within each, depends heavily on your [[revenue stream]], [[customer segment]], market norms, and the insights gathered during [[customer discovery]]. Remember, pricing based purely on cost ([[cost-plus pricing]]) can be a mistake if it ignores the value perceived by the customers you've identified. Next: [[Market Context and Strategic Considerations]] Back to: [[How Will You Generate Revenue?]]]