Core Function—Pricing: What Is the Optimal Price and How Can It Be Determined?

Summary Price is a key lever for companies to ensure their long-term survival by generating profits. To avoid mistakes in pricing decisions, the best possible understanding of price-sales relationships is required. The basis for this is knowledge of which prices target segments or individual customers are willing to pay. This parameter thus becomes an essential core element of value-oriented management. Under VUCA (volatility-uncertainty-complexity-ambiguity) conditions, methods that can provide fast and valid results on price-sales effects at adequate costs are particularly preferable. The PSM-Plus instrument is a method based on long-established price research instruments. In addition to optimizing price levels, there are also opportunities to influence price perception and ultimately stimulate demand by changing the way prices are presented.