Pricing, Promotion, and Distribution Strategy

“What is our pricing strategy? Do we even have one?”

Pricing is one of the most impactful strategies to drive revenue, with 1% gains in price realization typically resulting in 5% to 10% improvement in profit. Reducing, or simply not increasing prices based on fear of consumer rejection, may actually result in loss of profit. Likewise, promotions that fail to reach incremental audiences may be dilutive.

Pricing is one of the most impactful strategies to drive revenue, with 1% gains in price realization typically resulting in 5% to 10% improvement in profit. Reducing, or simply not increasing prices based on fear of consumer rejection, may actually result in loss of profit. Likewise, promotions that fail to reach incremental audiences may be dilutive.

Walt Disney World “Magic Your Way” Pricing Strategy – Case Study

The founders of Integrated Insight established Walt Disney World’s pricing strategy, called “Magic Your Way,” the most sweeping change in pricing strategy in Walt Disney Company history.

The strategy included unbundling water parks and park hopping from theme park tickets to allow guest choice; pricing to achieve significant, diminishing marginal day ticket prices to encourage longer length of stay; introduction of low cost meal plans for resort guests to overcome barriers to staying onsite; implementation of Extra Magic Hours; and development and implementation of Disney’s Magical Express. Overwhelming consumer response drove a 20% increase in annual operating income in year one with year-over-year revenue gains in high single digits (learn more).

When to Focus on Pricing, Promotions, and Distribution Strategies

Focusing on a holistic pricing, promotion, and distribution strategy is critical when:

– You haven’t raised prices or adjusted your strategy in many years.

– You have few complaints about pricing, but your sales team balks at raising price.

– You are doing “cost plus” pricing.

– You follow your competitors.

– You are overly focused on an entry price and have little stratification within the pricing structure.

– You treat your customers as one size fits all.

The Integrated Insight Difference

– We lead with the consumer and where they place value.

– We develop holistic pricing strategies that encompass the business as a whole versus silos of products or services that are often positioned to compete with one another.

– Our focus is on strategic step-change in pricing power, not incremental movements that are relatively undetectable.

– We take calculated risk, leveraging consumer insights and research (including discrete choice) to inform decisions.

– The marketing of pricing is as important as the pricing itself. We spell out explicitly how to present, market, and sell the strategy.

– We measure what we do and tweak the strategy where needed.

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