Posts by: Tim J. Smith, PhD
CEO’s are responsible for organizing productive operations, and ultimately generating revenue. When it comes to their pricing responsibility, CEO’s manage pricing decisions by defining the culture, structure, and routines necessary for producing sound decisions that align with their strategy.
MoreDismal earnings have been reported at Macy’s, JC Penney, Kohl’s, Barnes & Noble, Sears, and many other retailers—countered by increase sales at Amazon.com. Even Walmart is investing in online capabilities, begging the question will all physical retail fail? No.
MoreSo what do executives get wrong about pricing? They treat it as a noun not as a verb. Treating price as a verb drives executives to define the culture, organizational structure, and process for making pricing decisions. Leading firms do this. Failing firms don’t. Executives, you have a choice.
More“Discounting becomes a drug that is hard to get off, and creates this basis for consumer to not trust regular prices,” Uri Minkoff.
MoreI suspect Mr. Woodman believed that the GoPro could become the hot item for the holiday season. But $400 seemed a bit high for the average consumer. Why not drop it? If the price was lower, then more people may buy it, and GoPro may become a consumer product giant. Perhaps it could join the leagues of Apple, Cannon, and Sony?
MoreNot that I can or am stating that everything Sony did was perfect. And I am definitely not stating that everyone will find Sony’s design tradeoffs to result in a good offering. But they did define their target market and product design requirements in such a manner broadly appearing to be compatible with a highly successful product, launch.
MoreSeptember was an important month with the success of Pricing Done Right: The Pricing Framework Proven Successful by the World’s Most Profitable Companies. Check out some of the celebration and press below, and don’t forget to pick up your own copy!
MoreNotice the deal specificity. Target prices are deal dependent. That means it can vary between customers and between selling opportunities with the same customer. Target prices may be customer dependent, product mix dependent, quantity dependent, promotional timing dependent, competitive situation dependent, or even cost dependent.
MorePricing Done Right provides a roadmap for improving pricing practices within any market-oriented firm. It provides a framework for managing pricing decisions in any organization. It clarifies the best practices for defining the organizational culture, architectural hierarchy, and routines for getting pricing done right.
MoreFirms often sell low margin items because customers seek the low margin items and, when buying, buy higher margin items as well. These low margin items can make sense through their enablement of the firm to profit from economies of scope. Killing low margin items can make sense in some cases, but other cases doing so will kill the firm.
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