Strategic Pricing based on Nagle Pyramid

Price Setting
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Pricing strategically is essential to gain profitability and competitiveness, and the Nagle pyramid includes five levels of strategic pricing. Developing a pricing structure is necessary for pricing strategies, and there is a focus on aligning the price to the value delivered to the consumers while reducing costs. Based on the Nagle pyramid pricing, metrics and segmentation barriers are used in pricing strategies where there is an emphasis on driving profitability by capturing the generated and the difference between the cost and price. The prices are justified based on the value created for the different consumer profiles. The grocery client in the consumer segment is the full-service grocer that services higher-income clientele and products that are not common in conventional groceries. There is more focus on the specialty meat, seafood, wine, and beer cave counter, but limited dining (Nagle, & Hogan & Zale, 2014). Nonetheless, there are full-counters for foods. Pricing will focus on the mentioned client and targeting cost savings and capturing value.
At the top of the Nagle pyramid is the pricing level (price-setting), and upon implementing the other steps, there is an assumption that it is easier to meet the price goal. As the client targets high-income customers, there is strategic price adjustment and expectations that they also get quality products and services. Evaluating the material and labor price of installing doors on refrigerated display cases, replacing fluorescent lamps with LED lamps, and fan motor replacement inside the refrigerated walk-in coolers provides insights into how energy efficiency affects the costs. Pricing is an integral part of the company’s strategy, and segmenting the pri...