Commodity Busters: Be a Price Maker, Not a Price Taker

Too many businesses are price takers, not price makers. That means they are willing to lower prices to capture market share or to sign up a marquee customer. But Harvard Business School professor Benson P. Shapiro says don’t let your ego get in the way of good business sense. Here are seven steps toward naming your own price.

Use the Psychology of Pricing To Keep Customers Returning

When to charge for a product or service can be more important than how much to charge, says Harvard Business School professor John Gourville. If you want to build long-term loyalty with customers, you better understand the difference.

Pricing and Fairness: Do Your Customers Assume You Are Gouging Them?

In trying to assess consumer attitudes towards pricing, marketing professor Lisa Bolton and two other researchers conducted experiments designed to measure whether shoppers feel they get a fair shake from the businesses they regularly patronize. The answer, it turns out, is no. Consumers in fact routinely assume that companies gouge them and reap large profits. The results of this research are summarized in a new … [ Read more ]

The Power of Optimal Pricing

New software calculates precisely how much you should charge to squeeze maximum profit from every product, at any time.

The Priceline Problem

Though a bit topical, this short piece offers some useful general pricing observations.

Is Performance-Based Pricing the Right Price for You?

Not every industry or company can benefit from performance-based pricing. But where there is a fit, PBP can be a powerful tool that merges the interests of buyers and sellers, says Harvard Business School professor Benson Shapiro.

Value Based Pricing Saves the Day!

Hammered by competitive thrusts and pressured by customer demands for lower prices, companies are increasingly finding prices in a downward spiral. But price problems are rarely pricing problems! Value pricing provides the alternative!

Dynamic Pricing Models: Opportunity for Action

The Cap Gemini Ernst & Young Center for Business Innovation has researched more than 60 new business drivers and examined more than 50 company examples to determine which dynamic pricing model best supports the external environment and business strategy of a particular business. From this extensive research they have developed a dynamic pricing methodology for successful pricing. This white paper provides an overview of … [ Read more ]

Customising Prices in Online Markets

Werner Reinartz describes how the online world has increased the opportunities to pursue customised pricing strategies. But there are also risks. Also includes ‘In my opinion…’ where Orestis Terzidis of SAP, Germany, says technology is no limitation to dynamic pricing, while Carl-Erik Schelleman of KLM describes the airline’s new approach.

Note: you can read the article on the web page, but for a bigger font and … [ Read more ]

International Pricing – A Market Perspective

Differences in local preferences require organizations to adapt pricing policies when appealing to international markets. In Japan, for example, status, quality and price are so deeply linked that price reductions often have the surprising effect of reducing sales. This paper seeks to discuss the factors that must be taken into account when determining the international pricing of a product. It also seeks to identify ways … [ Read more ]

Getting prices right on the Web

Two widely disparate approaches to pricing have dominated the sale of goods and services on the Internet.

Editor’s Note: although written in 2001 (a lifetime ago in the “Internet age”), much of the suggestions are of long-lasting value…

Collusion Damage

“The Internet makes it easy for everyone to compare prices – not just the buyers, but sellers, too. Businesses check prices with search engines that are just as good as any consumer’s, and they probably use the tools more often. Once businesses see competitors’ pricing, they may react instantly – but not necessarily in ways that will lead to price cuts. Instead, businesses with great … [ Read more ]

Online pricing: Finding what works on the web

The goal of this paper is to explain some of the changes under way in online pricing and consider the implications for companies selling over the Internet. It will examine three areas:
– Pricing in multiple channels
– Global pricing
– Dynamic pricing

New Internet Pricing Models Bring Pain, and Fortune, to Retailers

With the click of a mouse, the ability of consumers to compare prices for everything from a new car to a new condo to a new coat has been dramatically transformed. Businesses in turn have had to throw out old, static pricing models and find new ways to respond to customers’ digital dexterity. Results have been mixed.

The Power of Smart Pricing

Companies are fine-tuning their price strategies – and it’s paying off.

Pricing – Where is It Heading?

Article argues that pricing has traditionally played a tactical rather than a strategic role. Most companies based their prices on cost-plus considerations or competitive comparisons, not concrete strategic goals. But the role of pricing is rapidly changing. To take advantage of these changes, CEOs and managers should consider the following five steps:
1 Link pricing more closely to shareholder value
2. Give pricing … [ Read more ]

The Price Is Wrong

And customers couldn’t be happier. Why flat rates and fixed prices rule.

How Store Location and Pricing Structure Affect Shopping Behavior

discussion of a new study titled “Store Choice and Shopping Behavior: How Price Format Works.”; Research on retailing typically attributes the success of a store to its location. At the same time, marketing experts have focused a great deal of attention on the role of pricing in store performance, but without considering location. In this recent study, Bell, Ho and Tang provide managers with a … [ Read more ]