69 articles found in this category.

When Shortage Is Strategic

February 2018 Marketing, Product

Shortages can be signals of excitement, quality, even virtue. “Sold out” is a powerful story for the right kind of product. Musk’s goal isn’t optimizing his earnings from flamethrowers. His goal is building excitement and investment around his companies. Selling out a flamethrower, and even a hat, does that in a big way.


Strategic Movements December 2017

December 2017 Corporate, Product

The Federal Aviation Administration is contemplating an $8 increase on domestic round-trip ticketing fees.  In response, Delta Air Lines Inc. claims that for every $1 increase in facility charges, passenger demand declines by more than 1%. That would imply a primary demand elasticity of about three. Seems right. So, an $8 facilities charge increase would decrease flight travel by 8%.


Valuing Benefits: Weighted Average or Economic Impact?

July 2017 Pricing, Product

Because the exchange value approach examines the focal product against its next nearest competitor from the viewpoint of a specific market segment, it creates a focused picture of how an offering is likely to be evaluated by that specific segment. If more segments and competitors are to be considered, more models of the Exchange Value to Customer are needed. This leads to better and more accurate pricing on a segment-by-segment basis.


Price Isn’t Cost

February 2017 Product, Selling

Once the investment is made, its cost no longer factors into the marginal cost of producing a product. Fixed costs are an important part of a go-or-no-go decision for a company at the onset of production, but should not factor into the price of a product going forward. Fixed costs are sunk costs.