Market Positioning Policies

Aligning Price with Position

Your pricing policies must reinforce your market positioning. A premium brand that discounts heavily undermines its positioning. A value brand that refuses to negotiate loses to more aggressive competitors. Policies provide the guardrails that keep pricing aligned with strategy.

Premium Position Policies

If you're positioned as a premium offering, policies should protect price integrity:

Strict discount limits: Shallow maximum discounts (5-10%) even for large accounts
No promotional discounting: Avoid sales, deals, and time-limited price reductions
List price emphasis: Train sales to sell from list; discounts are rare exceptions
Value justification required: Any discount requires documented competitive pressure
Bundle rather than discount: Offer added value rather than lower prices Premium policies can feel constraining, but they serve a purpose. Customers expect premium brands to hold price. Discounting signals desperation or overpricing—neither consistent with premium positioning. Sales teams initially resist but often find that firm pricing backed by value communication closes deals that would have been lost to discount requests.

Value Leader Policies

If you're positioned on value/price, policies enable competitive pricing while protecting floors:

Competitive matching authority: Sales can match documented competitor prices
Volume discount emphasis: Deep discounts tied to volume commitments
Floor protection: Absolute minimum prices below which no deal is approved
Cost-to-serve awareness: Different floors for different customers based on true costs
Efficient pricing: Streamlined approval for standard discount ranges Positioning-Specific Policy Guidelines

Position

Max Standard Discount

Promotional Activity

Exception Philosophy

Premium

5-10%

Rare; value-add focused

Highly restrictive

Upper Mid-Market

10-15%

Limited; strategic only

Moderately restrictive

Mid-Market

15-20%

Moderate; competitive

Balanced flexibility

Value Leader

20-30%

Frequent; price-focused

Volume-based flexibility

Economy

10-15%

Everyday low price

Minimal; already at floor

Multi-Brand and Multi-Tier Strategies

Many companies operate multiple brands or tiers at different positions. Policies must maintain separation between tiers to prevent cannibalization.

Price gaps: Maintain minimum percentage gaps between tiers (typically 15-25%)
Feature differentiation: Each tier has distinct features that justify its price point
Sales channel separation: Different tiers may use different channels to reduce comparison
Migration policies: Clear rules for moving customers between tiers

Case Study: Tier Protection: The Hotel Example A hotel chain operates three tiers: luxury, upscale, and select-service. Policies maintain tier separation: Luxury properties never discount below 40% premium to upscale. Upscale maintains 25% premium to select-service. Each tier has distinct amenities (spa, restaurant, room size) that justify gaps. Loyalty program benefits differ by tier—luxury members receive suite upgrades, select-service members receive points. When occupancy is low, properties are authorized to add value (breakfast, parking) rather than cut rates that would blur tier distinctions.

Key Takeaways

Pricing policies must reinforce market positioning—premium brands need different policies than value leaders
Premium positions require strict discount limits and emphasis on value over price
Value positions enable competitive pricing while protecting absolute floors
Multi-tier strategies require policies that maintain separation and prevent cannibalization

Premium Position Policies

If you're positioned as a premium offering, policies should protect price integrity:

Strict discount limits: Shallow maximum discounts (5-10%) even for large accounts

No promotional discounting: Avoid sales, deals, and time-limited price reductions

List price emphasis: Train sales to sell from list; discounts are rare exceptions

Value justification required: Any discount requires documented competitive pressure

Bundle rather than discount: Offer added value rather than lower prices Premium policies can feel constraining, but they serve a purpose. Customers expect premium brands to hold price. Discounting signals desperation or overpricing—neither consistent with premium positioning. Sales teams initially resist but often find that firm pricing backed by value communication closes deals that would have been lost to discount requests.

Value Leader Policies

If you're positioned on value/price, policies enable competitive pricing while protecting floors:

Competitive matching authority: Sales can match documented competitor prices

Volume discount emphasis: Deep discounts tied to volume commitments

Floor protection: Absolute minimum prices below which no deal is approved

Cost-to-serve awareness: Different floors for different customers based on true costs

Efficient pricing: Streamlined approval for standard discount ranges Positioning-Specific Policy Guidelines

Multi-Brand and Multi-Tier Strategies

Many companies operate multiple brands or tiers at different positions. Policies must maintain separation between tiers to prevent cannibalization.

Price gaps: Maintain minimum percentage gaps between tiers (typically 15-25%)

Feature differentiation: Each tier has distinct features that justify its price point

Sales channel separation: Different tiers may use different channels to reduce comparison

Migration policies: Clear rules for moving customers between tiers

Case Study: Tier Protection: The Hotel Example A hotel chain operates three tiers: luxury, upscale, and select-service. Policies maintain tier separation: Luxury properties never discount below 40% premium to upscale. Upscale maintains 25% premium to select-service. Each tier has distinct amenities (spa, restaurant, room size) that justify gaps. Loyalty program benefits differ by tier—luxury members receive suite upgrades, select-service members receive points. When occupancy is low, properties are authorized to add value (breakfast, parking) rather than cut rates that would blur tier distinctions.

Key Takeaways

Pricing policies must reinforce market positioning—premium brands need different policies than value leaders

Premium positions require strict discount limits and emphasis on value over price

Value positions enable competitive pricing while protecting absolute floors

Multi-tier strategies require policies that maintain separation and prevent cannibalization