A leading telecom provider sought to launch a new premium product in a highly commoditised market. PHG was engaged to develop a pricing strategy that reflected the product’s unique value proposition, aiming to increase market share while protecting existing product sales from cannibalisation.
With distinct capabilities and superior reliability compared to competitors, the client had a strong opportunity to command a price premium. By quantifying the added value delivered to customers, we identified potential for a value-based pricing strategy to drive successful market entry.
The pricing strategy identified products commanding a premium ranging between 15 and 40%, supported by the design of four distinct product tiers that captured varying customer willingness to pay.
A comprehensive Go-To-Market plan was developed to minimise revenue cannibalisation while achieving profit targets. Additionally, a pricing roadmap was created to guide future adjustments aligned with the product’s maturity, ensuring sustainable growth and value capture.
Effective pricing for new products is crucial—it shapes customer perception, drives profitability, and differentiates offerings in commoditised markets. A well-crafted pricing strategy ensures maximum value capture, supports brand positioning, and influences long-term customer loyalty.
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Market potential measured at £4.7m profit in with a 60% cumulative profit margin
Identified products commanded a premium ranging between 15 and 40%
Four product tiers designed and introduced to market
Build a deep understanding of the business context via stakeholder interviews and workshops
Market research targeting industry decision makers revealed several use cases where buyers were willing to pay a substantial premium for the SIM service
Combining clear value propositions and willingness-to-pay insights with customer interviews to land final price recommendations
Created a business case including financial modelling for the next 5 years for introducing and developing the new product’s pricing strategy
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