Top 6 – September 2014
Published September 28, 2014
I was asked at Riot Fest Chicago what I did and chose “Economics” as my answer for the moment. He continued: “Micro or Macro”. I said “I price stuff”. “What kind of stuff?” he inquired. “Stuff, like that shirt you’re wearing, the music fest tickets, or the carny rides.” He replied, “Oh, you do grunge economics. Punk, grunge economics.”
- Pricing is about a lot more than just covering your margins.
- It’s also more complex than simply crunching some numbers and attempting to maximize profit.
- There are many factors at work, and it requires knowing your market, your competitors, and your customers.
- As the saying goes, there are exceptions to every rule—even when a rule has “Law” in its name.
- At the end of the day, you must convince your customers to choose you.
- It’s best to approach this issue with a full box of tools…and a dash of humility.
Posted in: Top 6
Tagged:
Tagged:
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.