I recently had the opportunity to listen to Malcom Gladwell describe how spaghetti sauce changed the concept of marketing, consumer tastes and product offerings through a great new site, Ted.com.   His discussion on consumer choices raised an interesting dilemma - how do you maintain profitability if you constantly expand options for your customer offerings. Certainly larger companies can do this, but what can you do as a small to mid-sized business?

Flanking pricing is one strategy that can help.  Develop varying options (service, delivery, maintenance, accessories, etc) for your offerings.   Set your richest feature offering with the highest (premium) price and your bare bones offering at the lowest (value or budget) price.  Your target pricing/offering (features and options your customers most want) is priced between these.  This is effectively flanking your pricing and creating value for your offerings and can increase the price your market will pay for your offerings.  If you find you are getting more sales at the higher end or the lower end, adjust your pricing accordingly until the majority of your sales fall into the range you desire.