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PACCAR, a multinational truck, parts, and financing company, had a negative 2024. Examining PACCAR’s Truck, Parts, and Other business specifically, revenue fell 5% to $31 billion and earnings before interest and taxes fell 17% to $4.5 billion over the last year. (This article excludes PACCAR’s financial services business and makes no comments regarding how pricing should be managed in that line of business.) A review of PACCAR’s 28 January 2025 earnings call…
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The fundamental concern for service-based businesses is that each project is different and requires some variance in price and components. The vogue of productizing service offerings alleviates some of the natural envy toward product brands that can quickly adapt to the widening range of consumer demand, but that presents its own hurdles.
Read More In terms of market segmentation alignment, different customers receive different benefits (perceived or real) from the same or similar product. This drives variation in willingness to pay. One goal in improving a price structure is to improve the match between the willingness to pay and the price extracted. It is a form of price segmentation.
Read More Value-based pricing talks about pricing based on whether a product provides more or less perceived value with respect to the next best alternative. In the case of professional services however there is a slight difference — since there is the “human touch” involved we can’t be sure whether the next best alternative is a true alternative at all.
Read More Given the current currency fluctuations and country specific economic situations, what problems do they create for firms and how are prices supposed to be managed across boarders today? These are the pertinent questions facing many of today’s executives.
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