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Pricing for Consumption Economics

November 2013 Pricing 1 Comment

SaaS, DaaS, IaaS, and other “X-as-a-Service” business models are proven market disruptors in information technology industries. Executives at enterprise IT solution providers are creating, adapting, or adjusting to competitors’ XaaS business models. But successfully implementing an XaaS business model requires a new approach to both pricing and revenue capture for IT services. What is that new approach?

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The Art of Price Discrimination – can Ayn Rand teach us a lesson in pricing?

November 2013 Pricing 4 Comments

In traditional sense “discrimination” is a word with a negative connotation.  However, in the pricing context, by discrimination I mean that I will make some customers pay more and some customers pay less for the same product.  However that is pure discrimination and by no means an art.  Discrimination becomes an art only when all the subjects concerned accept the price they pay without a grudge.

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Is Apple the Louis Vuitton of Technology?

November 2013 Product 1 Comment

Apple recently announced that the new iPad mini will be priced slightly higher than the current iPad mini, while the price of the original iPad will remain the same. Is Apple making itself less competitive in the wake of the release and lowered prices of its competitors’ tablets or is Apple maintaining a luxury brand image by keeping its prices above the market?

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Pricing Strategy Reviewed in JRPM

November 2013 Product

Pricing Strategy: Setting Price Levels, Managing Price Discounts, and Establishing Price Structures by Tim J. Smith, PhD has been reviewed in September 2013 issue of the Journal of Revenue and Pricing Management by Sarah Keast, Lecturer in Economics, Plymouth Graduate School of Management and Plymouth Business School, UK. In her words, “Tim Smith successfully combines the theories and methods from marketing, economics, strategy, and decision making in one very accessible text on the strategies and methods of price setting.” Thank you Sarah Keast and JRPM. It is an honor.

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Tragedy to laughter in one word (read aloud with increasing speed): Yuck. Yuck yuck. …. Yuck yuck yuck yuck yuck yuck yuck yuck.

  1. It is the smart marketer today who will recognize key segmentation opportunities and use this important principle to create and develop new markets and profits.
  2. Owning a brand that other people recognize as luxury makes a consumer feel good. What is the proper price tag for that feeling of superiority?
  3. The role of a value-based seller is not blocking revenue for want of a good price. He is more of an advocate for the true worth of a product.
  4. Price discrimination becomes an art only when all the subjects concerned accept the price they pay without a grudge.
  5. Consumption Economics requires Value Based Pricing with Hyper-Veracity.
  6. In the not-too-distant past, the conventional wisdom was that the consumer marketplace was a single, mass market. My how we have evolved and differentiated. Communism had some seriously false premises of human nature. At least capitalism has demonstrated adaptability to human reality.