Strategic Movements: December 2020


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

Published December 18, 2020

Strategic Pricing: What does a Boeing 737 cost?

Photo by John McArthur on Unsplash

Boeing 737 Max Price?

What is the price of a new Boeing 737? It lists near $125 million a plane, but commercial aircraft are reported to typically sell for half their list price. On December 3rd, two weeks after the FAA cleared the 737 Max for passenger flights, Michael O’Leary, CEO of Ryanair, placed an order for 75 additional units. Given his penchant for making acquisitions when prices are at near rock-bottom and assets are in distress, it is likely he negotiated an even deeper discount. And, given the challenges Boeing has experienced with bringing the 737 Max back into the market, we can suspect they were looking to make a deal. Maybe … $50 million a pop? Only Ryanair and Boeing know. Ah, the joys and challenges of tactical discounts and rebates: they murky the market and wreak havoc on revenue, but sometimes they are necessary for driving the business forward. Southwest Airlines: will you try the same?

Strategic Pricing Movements September 2020: XBox, Peloton, Online Gaming

COVID-19 Drives Demand for …. Boats?

MasterCraft Boat Holding Inc., maker of recreational boats, posted a larger than expected profit in November 2020.  Early in the pandemic, MasterCraft had to shutter some production. Later in the pandemic, they ramped up production to meet high demand. Apparently, with hotels and resort destination demand down as families sought to isolate in their nuclear social-distanced bubbles and avoid the COVID, they found a penchant for boating. Water skiing is fun.

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.