Posts by: Tim J. Smith, PhD

Top 6 – April 2013

By Tim J. Smith, PhD April 30, 2013

“Selling a product at a loss for market share is not a good business decision.” Jeff Fettig, Chief Executive, Whirlpool Costs and…

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Procter & Gamble Trumps Church & Dwight: An Example of the Customer Orientation Overtaking a Medieval Business Strategy

By Tim J. Smith, PhD April 30, 2013

CEOs Robert McDonald of P&G and James Craigie of Church & Dwight are facing off in the laundry soap business, and one of them is slinging mud. Recent executive comments and division performance reports highlight that the battle in the soap aisle isn’t just about soap, it’s about the fundamental purpose of businesses in competitive markets.

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Economic Price Optimization through A/B Tests: Limited Applicability, Part 4 in our Series

By Tim J. Smith, PhD April 30, 2013

Which is a better price: $15.99 or $16.49? To answer this question, we have A/B testing and price optimization, but this approach doesn’t work all the time.

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J.C. Penney – Love the Vision But You Chose the Rocky Path

By Tim J. Smith, PhD April 1, 2013

JC Penney’s CEO Ron Johnson has had a tough go at it. Stock valuation is down roughly 40% since the time Johnson took over. Customer sales are down 20% from last year. Some are calling for his resignation. But before we chant “off with his head” with the Twitterati, let’s see if we can’t help him find a way out of his quandary.

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Economic Price Optimization Part 3 – Mental Models Matter

By Tim J. Smith, PhD April 1, 2013

In Freshman Land, economic price optimization can be done with simple models and equations. But Freshman Land doesn’t reflect reality, and hence we have to move to the next level. We have to have the right mental model of demand.

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Top 6 – March 2013

By Tim J. Smith, PhD April 1, 2013

“If there is a Volkswagen Way, it is to be determined, diligent and attentive to detail, with a glint of ruthlessness.” VW…

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Understanding Velocity-Based Pricing – A Preliminary Investigation

By Tim J. Smith, PhD March 4, 2013

In the age of big data, sales velocity has become a metric for guiding pricing decisions. Pricing software vendors all cite sales velocity as an important factor in guiding pricing decisions. Fortune 500 and mid-tier firms alike are known to practice it. But what does velocity-based pricing mean? Why should sales velocity influence pricing decisions? How should firms use sales velocity to inform pricing? And are there serious pitfalls to this approach, or is it a sound business practice?

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Top 6 – February 2013

By Tim J. Smith, PhD March 4, 2013

A customer checks you out … How did he know you existed? What brought him to you? How do you get more…

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Economic Price Optimization with Locally Measured Elasticity of Demand — Unreliable

By Tim J. Smith, PhD March 4, 2013

Theoretically, if you know the elasticity of demand you can optimize the price through economic price optimization. You may think that this approach would give the best price in practice as well since the word “optimal” is implied in its name alone. But dig beneath its sexy title you will generally find an ugly mess. So what do we do with it?

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Top 6 – February 2013

By Tim J. Smith, PhD February 4, 2013

Why do Americans generally get paid more to do business than to do engineering or science? Is it that there is greater…

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About The Author

timjsmith
Tim J. Smith, PhD, is the founder and CEO of Wiglaf Pricing, an Adjunct Professor of Marketing and Economics at DePaul University, and the author of Pricing Done Right (Wiley 2016) and Pricing Strategy (Cengage 2012). At Wiglaf Pricing, Tim leads client engagements. Smith’s popular business book, Pricing Done Right: The Pricing Framework Proven Successful by the World’s Most Profitable Companies, was noted by Dennis Stone, CEO of Overhead Door Corp, as "Essential reading… While many books cover the concepts of pricing, Pricing Done Right goes the additional step of applying the concepts in the real world." Tim’s textbook, Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures, has been described by independent reviewers as “the most comprehensive pricing strategy book” on the market. As well as serving as the Academic Advisor to the Professional Pricing Society’s Certified Pricing Professional program, Tim is a member of the American Marketing Association and American Physical Society. He holds a BS in Physics and Chemistry from Southern Methodist University, a BA in Mathematics from Southern Methodist University, a PhD in Physical Chemistry from the University of Chicago, and an MBA with high honors in Strategy and Marketing from the University of Chicago GSB.