Archives posted in: Pricing

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The Art of Price Discrimination – can Ayn Rand teach us a lesson in pricing?

By Anirban Sengupta November 4, 2013

In traditional sense “discrimination” is a word with a negative connotation.  However, in the pricing context, by discrimination I mean that I will make some customers pay more and some customers pay less for the same product.  However that is pure discrimination and by no means an art.  Discrimination becomes an art only when all the subjects concerned accept the price they pay without a grudge.

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Redbox Experiments with Price Promotions. Shareholders Recoil from Outerwall.

By Tim J. Smith, PhD October 2, 2013

Outerwall Inc. the owner of the Redbox downgraded their performance guidance tipping off a 13% decline in market capitalization. Did investors overreact? And what caused the poor performance in the first place?

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When is Price Discrimination Effective?

By Mary DeBoni October 2, 2013

“Discrimination” is a charged and highly sensitive word in the English language, but is it really that bad when it comes to pricing?

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Value-Based Pricing 101

By Anirban Sengupta October 2, 2013

Despite abundance of available and accessible literature, value-based pricing (VBP) as a concept remains mystified. The key reason is the difficulty of implementation. This article’s aim is to provide the reader a concise review of the ‘do’s and ‘don’t’s of VBP.

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Who Should Control Pricing? Sales, Marketing, or Finance?

By Tim J. Smith, PhD September 9, 2013

Who should oversee pricing decisions? Marketing? Sales? Finance? Research by Homburg, Jensen, and Hahn showed it was none of them, all of them, and it depends.

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Discount the Parts or the Whole?

By Tianyang Zhang & Tim Smith September 9, 2013

When selling things that go together, should the company offer discounts on the individual parts or the whole shebang? Sourav Ray, Charles A. Wood, and Paul R. Messinger examined these questions across 650,000 daily price listings and through customer and manager surveys in a recent Journal of Marketing article. Their results have broad price-management implications.

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Kimberly-Clark and Weber Grills vs. Ailawadi and Farris: Stupid or Smart Pricing?

By Tim J. Smith, PhD August 2, 2013

Kimberly-Clark Corp. (KMB) is “desheeting” its products to improve profitability. Weber Stephen Products LLC avoids price promotions and markdowns on their grills, and yet maintains a dominant market position. These are two rather disjointed activities but they both appear to fall afoul of the suggestions given in a recent Wall Street Journal article by Professor Ailawadi of Tuck and Professor Farris of Darden. Are Ailawad and Farris wrong, are the companies wrong, or can both pairs be right?

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Business Markets, Response Modes, and Price Performance

By Tim J. Smith, PhD July 9, 2013

Having a long list of prospective buyers may be comforting for a salesperson, but a highly applied sales methodology for business markets suggests salespeople should only pursue prospects that fall within two out of four response modes. What are these response modes? How do they affect price performance? And why should salespeople only pursue two of them?

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Economic Price Optimization Part 5: Useful, Not Perfect

By Tim J. Smith, PhD May 30, 2013

Since childhood, we have heard about economics. Now that we are adults with jobs, it seems like using an economics for pricing would be wise. But, as grown-ups, we also know that things are never as simple as they appeared when we were kids.

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Is Amazon No Longer a Low-Price Ecommerce Leader?

By David Dalka April 30, 2013

There is a long-standing perception that dates back to the earliest days of the Internet that prices are always cheaper on the web at places like Amazon.com (AMZN).  Today though, this may be a myth.

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