Pricing low to gain volume is the oldest move in the pricing playbook; the laws of economics say that as you lower price, volume will go up. Therefore many companies that want to dominate a market, or are in a rush to grow in a new market, will use low prices to achieve their goals (e.g. Walmart, Dell, Private Label).
If a consumer is shopping for an exclusive brand and likes the idea of buying smart, then many would conclude they can save some money by buying online from a country that sells it cheaper. However, the truth is that they probably won’t succeed; at least not online.
After a recent visit to the barber, I was reminded the importance of a strong value proposition. Here are 3 of the lessons I learned.
Just when things were looking bleak for Netflix they caught a break as Bank of America came along with their debit card pricing fee. Bank of America has taken such a beating for that decision that if there was such a thing as a Pricing Piñata it would have their logo emblazoned all over it.
Pricing strategy is a hot topic these days. Over the past 20 years, we have helped many companies develop, refine or transform their pricing strategy, but today we get requests for help more frequently than ever before. So why the surge of interest now?
Are you at a cliff deciding whether you should cut prices to react to new market realities or stand pat and maintain gross margin?
Finance Minister Jim Flaherty recently announced his desire to commission a Senate Committee into Canadian pricing. There have likely been a number of triggers for his reaction, but J Crew, a specialty apparel retailer, entering Canada at a significant price premium to its US pricing and subsequent reversal I am sure was part of the cause.
Netflix has been getting a lot of attention lately for its new pricing strategy. If you have kept an eye on the matter you will have noticed that there is an interesting paradox. Consumers hate it but analysts love it. They may lose as many as 2.5 million customers but profitability should go up.
A consultant at Pricing Solutions recently presented some learnings he took away from an IBM conference on the topic of analytics. An important topic was the emerging frontier of using real time data to make real time decisions. From a pricing perspective, how could this level of data analytics move companies forward in their ability to be good value based pricers?
If your segmentation isn’t leading you into a discussion about behaviour, price structure, innovation and offer design, you probably have a large untapped opportunity. Read how segmentation can be the backbone of your pricing strategy.
