Top 6 – June 2009
Published June 13, 2009
An economist, finance executive, and marketer walk into a PWYW bar. The finance executive says: “With pricing like this, how can this bar stay open?” The economist looks around and sees a customer paying and says: “That guy is irrational.” The marketer replied: “Perhaps, but he is predictably irrational, and therefore reliably profitable. Now, who is up for slivovitz?”
- One in three Americans classify themselves as a minority.
- In democratic societies, on average, people have a strong desire for an equal allocation of resources. This moderates the concept of fairness as one traverses the globe.
- We have moved into the “relationship economy.” Traditional marketing has reached an impasse. Social Media is no myth.
- Under PWYW, any homoeconomicus customer would rationally pay a price of zero. Yet, we people are not simply homoeconomicus and PWYW can be profitable.
- Companies miss the whole enchilada when they cling to the concept of the melting pot.
- From Tequila to Slivovitz, now that is multicultural marketing … AND a normal afternoon in Texas.
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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.