Prince starts by formulating narratology as the study of form and functioning of narrative, or narrative competence. What distinguish narratives from other forms is that they consist of "story" and "discourse". Prince claims that to understand a narrative is not only to be able to answer questions on its contents, but to be able to understand its message, its point. This point, however, is understood on an individual basis. The area of narrative pragmatics studies the factors external to the syntax and semantics of narratives: cognitive and communicative parts. This means studying a collection of factors we know little about.
Prince asks two questions. First, how do we get a potential message in a narrative? Second, how is it that we, although we have understood the story, still can disagree about the point? The first question is answered by Prince in the following way. We arrive to a set of propositions from the narrative clauses in a narrative: the characters' features, actions, and goals and the causes for actions and changes or for not reaching their goals. Another set of propositions are the evaluative clauses as they appear in the narrative. The implications we derive from the union of these two sets of propositions, is the message, or part of the message. How these two sets are constructed depends on context and in what terms one reads a narrative, e.g., Marxist and Freudian terms.
The second question is answered by Prince by giving an analysis of relevance of a narrative. Prince describes Sperber and Wilson's logic-based approach to accounting for differing degrees of relevance of a proposition in relation to a context (a set of propositions). In combination with the context, a proposition leads, with different amount of processing, to a number of new conclusions. A proposition is relevant if it leads to many conclusions and do not require much processing given a context. A "pointed" narrative leads to more implications and requires less processing than a "pointless" narrative, in the contexts in which they occur.
The study of context is important in narratology and literary studies because literary works supply little context by themselves, so they depend much on the context surrounding them. Different contexts is what enables us to "get" different points in narratives. Prince concludes the article with that narratology should not fear to study context because it is complex - it is essential to understand one important aspect of narratives: their message.