Another problem with this pricing strategy is the Problem of the Deadly Middle. If you are the high-priced provider, most people assume you offer the best quality—a desirable position. If you are the low-cost provider, most people assume you deliver an acceptable product at the lowest cost—also a desirable position. But if you price in the middle, what you are saying—again—is: “We’re not the best, and neither is our price, but both our service and price are pretty good.” Not a very compelling message. The premium service and the low-cost provider occupy nice niches all by themselves. If you
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