Strategic Movements: August 2018

Tim J. Smith, PhD
Founder and CEO, Wiglaf Pricing

Published August 23, 2018

The Value of Human Judgement

“Those who are insistent that human beings cannot cope with determining what to do unless all values are somehow reduces to no more than one, are evidently comfortable with counting (‘is it more or less?’), but not with judgment (‘is this more important than the other?’). Amartya Sen, The Idea of Justice.

Price Wars: Signal Corporate Weakness at Unilever

Unilever PLC reports lower profit for the first half of 2018 due to discounts and price increase struggles. Secular Trends: (1) Brands like Hellmann’s Mayonnaise, Dove Soap, and Magnum Ice Cream don’t have the same customer attraction that they did a decade ago. (2) The trend from branded goods and wide-variety stores to store brands/generics and hard discounters like Aldi continues. (3) Online shopping continues to make inroads into the pantry, cupboards, and water closets. Action item: Create new question-mark brands that are on trend while continuing to milk the cows. Good luck Unilever.

MoviePass Makes Changes

MoviePass is raising its price from $9.95 to $14.95. Right direction but not enough. Lost $98 Million on $48 million revenue. WOW Would need to triple prices to cover losses. Insolvency still looms. #pricingstrategy

Inflation is Here

Nielsen reported household and personal car product prices increased an annually adjusted 2.2% the June/July time frame – but expect more. Colgate-Palmolive promised higher prices in the second half of 2018. P&G is moving to raise prices on Pampers by 4% and Bounty, Charmin, and Puffs by 5% (all are paper products).

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About The Author

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.