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Pricing Strategy: Pricking the Veil of Value Exchange

January 2011 Pricing

Our understanding of pricing has come a long way since the 1890 when Alfred Marshall published his treatise on the economic scissors of supply and demand, and it is time for practice to catch-up. To go beyond the price to value mantra and create clarity in the actions and decisions executives should make, we can draw from the marketing orientation of the firm and an economic understanding of value exchange. In this article, we provide an outline of the path to better pricing.

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Driving Compliance with Collecting Market Pricing

By: Special Guest Author Patrick J. Taylor
January 2011 Pricing

The concepts associated with creating sustainable processes for monitoring market-based pricing is fairly intuitive. In past articles, I have shared a bit about how to get started and where to focus your energies. Because it is imperative for your company’s survival, this article addresses the hardest part of creating a sustainable pricing system; adapting pricing concepts to your way of doing business.

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“No sensible person would claim that [quantification] can tell the whole story.”

Angus Maddison, professor at the University of Groningen and authority of quantitative macroeconomic history, (1926-2010)

  1. The purpose of the firm is to serve customers profitably.
  2. Value exchange is the driver of all transactions.
  3. Understand the value to the customer to understand your market opportunity.
  4. As the economy returns to growth, the pressure will return to customer, employee, and vendor relationships.
  5. If you want to capture value, sell value.
  6. Good pricing enables mutually beneficial value exchange.