Problem

A security software company was about to launch a new version of its software and wanted to reconsider its pricing strategy.  The company wanted to dramatically improve its market penetration in the face of stiff competition from existing players.  How should the company alter its overall pricing model and price levels in order to encourage ubiquitous deployment of its software throughout enterprises, while still providing opportunities for profitable add-on sales?

Solution – Competitive Analysis and Pricing Strategy

KJ & Co. analyzed competitive price structures and levels at various purchase volumes.  We interviewed information technology staff responsible for making purchase and deployment decisions about security software.  KJ & Co. found that the company’s pricing was significantly higher than competitive offerings for large volume purchases.  But the product’s perceived benefits were not great enough to justify a significant premium over the competition’s price.  More importantly, the research revealed that there were other, non-price impediments to widespread deployment.  And there were some misconceptions about how the product should be used.  KJ & Co. generated alternative pricing scenarios, assessed their financial impact and recommended a new pricing approach.  In addition, we were able to recommend modifications to the company’s messages regarding the product’s benefits and applications.

Result

The company altered the pricing of its product with the introduction of its new version and has since established itself as a key player in its marketplace.

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