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2011 Articles by Date

Broadway for 2 at $700? Dynamic Pricing Keeps Expanding

December 2011 Pricing

$700 is the price a couple would pay for the best seats to see Hugh Jackman Back on Broadway this month.  With a runaway hit, producers have raised prices several times.  Orchestra seats that were priced at $155 are now priced at $175.  Premium seats that were priced at $250 are now priced in the range of $275 to $350, depending upon demand for specific performances.  Their decision to use dynamic pricing has placed Hugh Jackman’s essentially one-man-show in the top earner position on Broadway with roughly $1.5 million in ticket sales for the week ending November 20th, 2011.

With pricing success like this, one can suspect that more executives may benefit from considering the value of dynamic pricing.

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Effective Price Segmentation Techniques

December 2011 Pricing

In order to fully capture potential profit contributions, a firm must be able to successfully execute price segmentation tactics on a consistent basis. Faced by a dynamic market, firms require regular price maintenance to ensure segmentation hedges remain effective. Efficient price discrimination techniques that involve limited cost to identify market segments and mitigate the existence of a secondary market, truly contribute to a firm’s bottom line. Understanding the theoretical concepts of price discrimination discussed in a standard economics textbook only scratches the surface of the knowledge needed to implement a profit generating pricing strategy. This article will attempt to provide the connection between pricing theory and where the rubber meets the road.

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Killing the Golden Goose – Part 2

November 2011 Marketing 6 Comments

Reed Hastings, the CEO of Netflix (NFLX) has cemented his position on my Hall of Shame. Whether hubris (outrageous arrogance) or stupidity, Netflix has taken an ill-advised price increase and transformed it into a runaway train that threatens to jeopardize the company. The story began when Reed Hastings and his management team, after doing apparently no market research, decided to raise their prices by approximately 60 percent. This action was taken amidst a continuous stream of record earnings, customer loyalty and a growing customer base.

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The Coming Convergence of Alternative Payments and Digital Marketing Strategy

November 2011 Partnership 1 Comment

During October, I had the distinct pleasure of attending the BAI Retail Delivery Summit 2011 and the 3rd Mobile Contactless Payment Innovations Summit. These shows discussed various aspects of banking and payment convergence with digital mobile devices. The majority of the presenters focused on the technology and near field communications issues. But there were a few speakers who had different perspectives.

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