Beyond Costs: An Integrated Approach to Strategic Pricing

In today’s increasingly competitive and dynamic markets, pricing has evolved from a mere operational task into a fundamental strategic lever that shapes profitability, positioning, and customer perception. This thesis explores the three main approaches to strategic pricing—cost-based, competition-based, and customer-based pricing—analyzing their theoretical foundations, advantages, limitations, and practical applications. The study highlights how cost-based pricing, while simple and widely adopted, often neglects market dynamics and consumer expectations; how competition-based pricing enables rapid market positioning but risks triggering price wars; and how customer-based pricing, although the most conceptually advanced, requires sophisticated tools and in-depth knowledge of customer perceptions and willingness to pay. Through a comprehensive examination, it emerges that no single method can guarantee effective and sustainable results when applied in isolation. Instead, an integrated framework is proposed, in which customer-based pricing serves as the starting point, competition-based pricing refines strategic positioning, and cost-based pricing ensures financial and economic sustainability. This approach is further tested through a case study of an Italian HVAC company operating internationally, which demonstrates the necessity of balancing internal cost structures, competitive pressures, and customer value perceptions. Despite limitations related to the scope of competitor and customer analyses, the study underscores the importance for small and medium-sized enterprises to adopt structured pricing strategies that go beyond intuition and cost coverage. Ultimately, pricing is not about fixing a number, but about defining a coherent strategic path that reflects value creation, strengthens competitiveness, and secures long-term sustainability.