Posts by: Tim J. Smith, PhD
In deliverable based pricing, prices are tied to deliverables, not effort. In order for that to work in favor of the service provider, that provider has to know, plan, and execute what it takes to achieve the defined deliverable with the client. (Laggard service providers may be afraid of deliverable based pricing precisely because of their project management skill-set deficit – but it is something they can learn.)
More High barriers to entry must be keeping competitors from providing alternatives to off-patent generic drugs. What could be the source of these barriers to entry?
It isn’t the lack of know how. Many firms are able to produce chemicals, even specialized chemicals in the life sciences. And, that is what a drug is: it is a chemical. As observed in animal health care, agricultural chemistry and many other specialty chemical companies: competition keeps prices relatively low. Yet, in human life sciences, there is insufficient competition.
The use of comparable equivalents leads to an improvement in the meaningfulness and accuracy of the benchmark approach, yet the determination of what constitutes the comparable equivalent is made by the consultant him/herself. This approach is fraught with error. Does the lawyer think too highly of him/herself or is he/she being too timid?
More Pricing strategy is not executed by simply raising prices. If that’s all it took, then every fool would do pricing strategy, and every business owner would have a clear pricing plan.
More Join Tim J. Smith PhD in a new video blogging series covering what’s affecting pricing, the economy and you. In this month’s vlogs, gain insight on everything from Imaginary Pricing to liquor sales in Africa.
More Companies that are just beginning to build a pricing team should initially focus on defining the first year’s problems the team must address. Is it a price execution, discounting, setting, or strategy challenge, which most needs to be addressed? In some cases, the performance metric should be something correlated to profits, revenue, and share.
More The pricing software revolution is in full swing so who needs people anymore? Tim J. Smith, PhD takes on the thorny question of the information revolution impacting entry level and mid-tier pricing jobs and actually finds good news.
More Join Tim J. Smith PhD in a new video blogging series covering all things pricing. From Hertz, big oil, airline price gouges and Zulily to homemade soda and Gucci, step into a vlogosphere dissecting what’s affecting prices, the economy and you.
More With recovery in job security and wealth, and having successfully survived the worst recession in most of our lifetimes, truck buyers are in a better position and mind-frame to spend. Moreover, since many blue-collar entrepreneurs spend a significant part of their day driving their truck, and it is normal for people to want their working environment to be comfortable, they are willing to spend for luxury work truck.
More In the price improvement strategy, firms develop the organizational capabilities to manage prices better. Pricing and discount management processes are developed. People are hired to drive those processes. Tools are acquired to accelerate achievements. Cultures are changed towards a profit and discount cautious mentality.
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