Price Positioning Strategies

Learn the merits and drawbacks of five price positioning strategies and use our price positioning worksheet to experiment with your own pricing strategy.

The Internet has dramatically changed hospitality pricing. Its speed and transparency have removed most barriers between customers and suppliers. With OTAs like Hotwire, Orbitz, and, you no longer need be an industry insider to find the best pricing to suit your needs. Yet, hotels and restaurants still need to make pricing decisions; these new challenges simply up the ante. Today, we’re looking at five price positioning strategies, explaining their merits (and drawbacks), and providing examples. When you’re done reading, download a free price positioning worksheet to experiment with your own pricing strategy.

The Price-Value Matrix

Many factors will influence your prices, including your competitors’ rates and products. As the name implies, your goal is to develop a pricing strategy that places your brand and its products in a certain position relative to your competition. One way to visualize this is the price-value matrix (right).Price Positioning -- The Price-Value Matrix

The position of your products within this matrix is a function of your brand proposition, your competitors, and your pricing objectives. Are you looking to maximize short-term revenues or profit? Are you seeking higher profit margins in a luxury market with sporadic sales? Do you need to differentiate more to penetrate the market? Or, is your business in survival mode?

Once you identify your pricing objectives, plot your prices and those of your competitors on the price-value matrix. At a glance, you’ll see how your pricing lines up with your objectives. If your rates need tweaking—either because they “say” the wrong things about your brand relative to competitors, or because they’re undermining your pricing objectives—consider using the following strategies to position your rates or prices more appropriately.

Price Positioning Strategies


This strategy clearly positions your company above the rest; it tells consumers something is special (i.e., worth paying more for) about your products. For example, look at the prices The Old Homestead restaurant has set for their steaks and chops. We can smell the fried onions and seared, aged prime meat already. We can envision the long white aprons of the wait staff and the impeccable table side service. To skim, set your prices higher than the competition does in order to “skim off” customers who are willing to pay more. This strategy can be highly profitable, but be careful: Though high prices imply high quality for many customers, it’s still critical that they understand why they’d pay more to stay or eat at your establishment.


This strategy puts your pricing on par with the competition, but not necessarily for all rates. To match, set one rate comparable to your competition and another slightly higher. This allows you to stay competitive for a larger pool of customers, yet doesn’t undercut the competition.


Price Positioning Strategy - SurroundThis strategy positions your first room type as the cheapest in the market, but offers your rooms with better options at a price that’s close to your competitors’ first available rates. Hence, you’re “surrounding” the middle market, hoping to capture customers willing to pay in those ranges. For example, look at Sizzler’s $16.99 sirloin steak and lobster special.

Outback Steakhouse offers a similar item for $24.99, but uses a filet and includes two sides instead of one. Outback also offers a 6 oz. sirloin steak for $10.99. This strategy allows Outback to attract customers looking for an inexpensive steak dinner, while offering customers willing to pay more, well, more, but at a price far shy of Ruth Chris’s smallest filet steak at $35.


By undercutting your competitors’ rates in some categories, you can potentially attract more customers. To undercut, offer a price that’s comparable to your competition and another that’s lower. Take this example from the hotel industry.Price Positioning -- Undercut

Both hotels are located near a major airport, both have the same star ratings and amenities. But look at their airport parking packages for 14 days free parking plus a room: $359 versus $189.  These hotels had very similar best rate rooms, but one has chosen to undercut their competition on this package, likely in hopes of driving more cost-conscious travelers their way.Price Positioning -- Undercut

Price Positioning -- Penetrate


Being the low-priced option in your market has benefits and drawbacks. The strategy is primarily designed to get people in the door and in seats. For new establishments, low prices often seem the best way to entice consumers to try their products. But this strategy also can depress market prices, lower margins, and set a poor precedent as your business grows. Do your prices reflect how consumers value your hotel or restaurant? Here’s what consumers see as they peruse online hotel options; those using penetration pricing certainly stand out.

Set Your Own Price Positioning Strategy

Price Positioning WorksheetHere’s an exercise taken directly from my eCornell course series New Media Marketing for the Hospitality Professional. This example illustrates the outcomes of five pricing strategies if your competition is charging $79.

Now, download your free price positioning worksheet here.

Though pricing can be a complex issue, this simple, effective tool provides an excellent start.

Applying Business Intelligence in Demand Generation

More than 50% of B2B marketers cannot accurately measure the ROI of their marketing efforts. In order to accurately measure the impact of their demand-generation programs, marketers must take a more holistic and strategic approach to demand generation.

Data is often not the problem as the B2B enterprise has expansive amounts of data. The challenge lies in determining the context of the data and knowing what actions should be taken based on the data analysis. Without this insight and analysis, B2B marketers will only rely on guesswork as they seek to optimize their performance and drive more revenue from their demand-generation investments.

In this webinar, Adam Needles, Chief Strategy Officer and Principal at ANNUITAS shows you:

  • What KPIs marketers should be measuring to get better visions into their demand-generation performance
  • How to use the intelligence of your data to better optimize performance
  • An example of a client and their success with business intelligence and analysis

Adam is a passionate B2B marketing change agent—helping companies build successful, modern, buyer-centric demand generation programs and transform their lead-to-revenue demand processes to drive profitable revenue growth and build sustainable brands. He is the author of Balancing the Demand Equation: The Elements of a Successful, Modern B2B Demand Generation Model, a book written for B2B marketing leaders.

It’s Not About You: Why Hotel Marketing Needs to Change

Is your marketing all about you? About how beautiful your rooms are, how delicious is the restaurant’s menu, how soothing are the spa services? All this may be true, but let’s be realistic: Your potential guests are hearing the same thing from every hotel.

In addition, a 2012 comScore study found that average ad effectiveness increases with age, meaning, traditional marketing is less effective with each new generation that comes along. Millennials (the youngest generation in the study) are more difficult to persuade via advertising when compared to older viewers. In just a few years, the majority of hotel guests will be Millennials, and traditional marketing will be useless.

So what should hoteliers do? Hotels need to switch from all-about-me marketing to targeted, guest-centric marketing.

Revinate marketing experts Daniel Mason and Betty Mok show you:

  • why marketing needs to change.
  • what hypertargeting is and how to do it.
  • how hoteliers can leverage customer data to deliver effective marketing, enhance the guest experience, and drive greater revenue.
Betty Mok, Director of Product Marketing

As the Director of Product Marketing at Revinate, Betty is responsible for new product and feature launches including pricing, packaging and messaging. Prior to Revinate, Betty has over 10 years of marketing experience at a range of businesses from small businesses to Fortune 500 companies including Intuit and American Express, with a focus on online marketing and launching new technology products. Betty has a BA from NYU, Stern School of Business and an MBA from Columbia Business School.

Danny Mason, Head of Demand Generation
As the Head of Demand Generation at Revinate, Danny is responsible for creating and managing programs that drive interest in Revinate, quantifying the success of those programs, and refining/optimizing performance. Prior to joining the Revinate team, Danny earned his BS in Hospitality Management from UNLV (sorry Cornell team!).

Reputation and Revenue Roundtable

An Ivy League professor, a leading hotelier and a reputation management executive walk into a bar…

Cornell’s Bill Carroll, citizenM’s Michael Levie and ReviewPro’s RJ Friedlander joined forces on for a live, in-depth discussion on hotel guest experience, online reputation and how the social web can be leveraged to drive revenue growth.

In this fast-paced session, Bill, Michael and RJ:
•    Show how to interpret guest intelligence analytics and turn insight into action across the hotel enterprise.
•    Provide tips on developing customer-focused operations and service strategies to exceed expectations and deliver unforgettable experiences for your guests.
•    Explain the importance of driving review volume across multiple channels and how to increase your rankings on OTAs and TripAdvisor.
•    Discuss how hotels can use guest intelligence data to improve operations and optimize their revenue generation strategies based on the latest research from Cornell’s School of Hotel Administration.

Marketing Strategies: Driving Demand and Connecting With Today’s Buyer

Are you failing to make a real connection with customers? Are you dragging down your sales team by delivering low-quality leads?

In a recent B2B study, ANNUITAS found that only 2.8% of organizations rate themselves as effective in demand generation. That’s abysmal, but insightful at the same time. The study revealed that too many marketers are overly focused on tactics in lieu of a cohesive strategy.

Carlos Hidalgo, CEO of ANNUITAS, discusses:

  • The fundamentals of strategic demand generation.
  • How to build a demand-generation strategy that will guide your tactical game plan.
  • How to align your inbound and content marketing efforts around buyers’ needs.
  • How to measure ROI and optimize your marketing efforts for the greatest success.
  • The skills required to become a successful marketing strategist.


Still Selling Like It’s 1999? Meet the Modern Buyer

Face it: Nobody wants to be sold to. 
Today’s modern buyer is mobile, digitally driven, and socially connected — able to make informed purchasing decisions without the influence of a salesperson. In fact, 57% of buying decisions are made before a salesperson is engaged. The modern buyer rarely buys anything without researching it thoroughly. 

Forget “selling.” The role of the modern seller is to educate and empower the buyer with information. Potential customers must trust you before they trust your brand. If you’ve helped them make the right buying decision, you’ll have a customer for life — better yet, a digital evangelist who will effectively do the selling for you. 

In this webinar, Jill shows you how to: 

  • Create and curate content that empowers and enables prospects.
  • Feed your sales pipeline with people who will contact you when they’re ready to buy.
  • Leverage social networks to your advantage.
  • Stop using LinkedIn as your online resume.

Jill Rowley is a social-selling advocate, a speaker, and a trainer. Companies like Eloqua,, and Oracle have enlisted Jill to help transform their lead-management processes.

The New Rules for Customer Engagement

Consumer behaviors have changed drastically in the last several years. You should know; you’re likely an online consumer yourself. So you know that reaching the modern buyer can be a daunting, seemingly impossible, proposition. But it doesn’t have to be that way.

Mathew Sweezey, Marketing Evangelist for and author of Marketing Automation for Dummies, provides an overview of modern customer engagement and shows you how to execute on an engagement strategy that drives lasting results.

During this webinar, you’ll learn:

  • How the modern consumer makes buying decisions
  • Lead nurturing best practices to increase lead flow
  • Social media tactics and strategies that get results
  • How to value and get buy-in for your efforts

Mathew is the head of thought leadership for B2B marketing at A consummate writer, he authors a column for on marketing automation, has been featured in publications such as Marketing Automation Times, DemandGen Report, Marketing Sherpa, ZDNet, and is the author of Marketing Automation for Dummies. Mathew speaks more than 50 times per year around the world at events such as Conversion Conference, Dreamforce, SugarCon, and to companies including Microsoft, Investec, NetJets, and, to name a few.

Why You Should Let Your Buyer Design Your Sales Process

“The buyer is in charge” is one of the most popular refrains in contemporary business sales and marketing today. Well it’s true; the Internet has changed buyer behavior forever. In the old days of business sales, the seller controlled the conversation. Now, the Internet has given the power back to the buyer. Marketing has undergone a radical transformation to change their approach to meet the new buyer’s expectations. It’s sales’ turn.

The reality is the buyer views their experience with a vendor as one of the most important factors in buying. When polled, buyers rate their experience with vendors higher than the expected answers of product and price. The sales leader’s imperative is to deliver the sales experience their buyers want and expect.

Join TOPO’s Chief Analyst Craig Rosenberg, AKA the Funnelholic, for a free webinar on Wednesday, 5/28/14, from 1:00 – 2:00PM EDT entitled Why You Should Let Your Buyer Design Your Sales Process.

In this webinar, we provide you with the blueprint and specific use case examples. You will learn:

  • Best practices for understanding your buyer
  • How the buyer affects your organizational design including people, process and technology
  • Specific examples of companies creating buyer-responsive processes

This discussion is tailored for CEOs, execs, VPs, upper-level management, and anyone involved in sales and overall business strategy.

UPDATE: Here is the link to the slide deck and video of the webinar.


Social Selling: A Live Conversation with Koka Sexton and Jill Rowley

eCornell hosted a great webinar last week with Koka Sexton and Jill Rowley all about Social Selling.  With ten+ years of sales experience and a passion for social media, Koka is the perfect evangelist for social selling. His expertise extends beyond his endless knowledge of social networks into his skill at employing them to drive lead generation, create new opportunities, and engage customers. Jill is passionate about culture, customers, content and connections. Her core value system is Give-to-Give versus Give-to-Get and The ABCs of Social Selling = Always Be Connecting & Curating Content.

Together they made for one dynamic, informative and interesting webinar as they shared their thoughts on:

  • creating your personal brand
  • providing content that resonates with your target audience
  • measuring ROI and getting buy-in for social selling initiatives
  • engaging customers, increasing lead generation, and driving sale

We also fielded some great questions with the folks attending.

Because we know how crazy busy most people are and that attending the live event may have been impossible, we recorded the webinar for you. To get this recording, simply go here and fill out the form. Make sure you let us know what you thought after watching it!


Engagement is the #1 KPI

Traditional KPIs—or Key Performance Indicators—include things such as new customers, new subscribers, turnover rate and so on. However, how your community is engaging with your online marketing content—opening emails, commenting on blog posts, downloading eBooks, registering for webinars—is an important factor in how successful your overall marketing program is. And a successful marketing program often leads to companies exceeding their KPIs!

While engagement may seem like a “fuzzy” marketing metric, it’s actually something that can be measured and tracked – just like a like, a social share, or an email click-through. It’s time to think about engagement as another KPI!