Archive for December 2005
2005: The Pricing Year in Review
As the New Year approaches, and “slow news days” become more common, it is customary for journalists and broadcasters to do their annual review of the year that has (almost) concluded. “No point re-inventing the wheel or breaking with tradition” I thought to myself when Tim Smith asked if I’d be interesting in contributing a…
Read MoreProfiting with Yield Pricing
Increasing numbers of companies are taking elements of “yield pricing” or “yield management,” a pricing strategy originally developed for perishable service sector products and adapting this strategy to new uses. Yield management as been used since the mid-80s in the lodging industries and in airline ticketing. The key variables are: (1) the perishable nature of…
Read MoreDifferential Pricing Needs More Than Differentiated Functionality
Why does the price of pen vary so much? Functionally, they are all simply writing instruments for applying ink to paper. We could describe them as recording devices to capture our thoughts for sharing with others or reviewing at a later time, yet this type of a description would only inflate the overall price level…
Read MoreThe Peril of Price Cuts
When I first started teaching marketing to DePaul University undergraduates, I used a textbook that had short one-page cases. In solving the problems and challenges presented in these cases, the students’ universal solution to virtually all the problems ailing any company was “to lower prices.” In reality, cutting prices is not only a lazy and…
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