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Retail pricing: Should I price for value or for Profit?

If this question does not make sense to you, read on. Value pricing In retail, many consider value pricing – i.e. pricing a product based on its value to the customer – the gold standard. In most cases, the value of a product is determined for relevant customer segments – for example by looking...

The truth about Price Elasticity – Part 2

Price elasticities are like sausages; everyone likes them, but it’s better not to see them being made. The most important thing in pricing is to understand the customer. Measuring price elasticity is a widely used method to do so. More specifically, price elasticity is measured to answer the question: “How have...

The 7 deadly sins of pricing

The deadly 7 sins of pricing Pricing is crucial to business success. So why do so many companies get it wrong? Maybe we can provide a time-tested answer to this conundrum. The 7 deadly sins not only make good movies, but they also provide a good framework on how things go wrong. Here is our take on the 7 deadly sins...

On Pricing Strategy

Good strategy is like great art. It’s difficult to define what it is, but you immediately recognize it, when you see it. Here is a classic example: In the tale of David and Goliath, David knew of his slingshot capabilities and likely also of Goliath’s weakness. Therefore, it was good strategy to take the risk of...

Price Elasticity: The Good, the Bad and the Ugly

Price is the most important profit lever. Being able to increase price without a loss in demand is more profitable than increasing units or decreasing variable or fixed costs. Unfortunately, demand reacts to price changes, and a price increase – in general – leads to a decrease in demand. Therefore, measuring how...

Let’s bring Pricing into the 21st Century!

Life is complex. This makes predictions – e.g., the results of soccer matches, the weather, or financial markets – difficult. Luckily, there are often simple rules that provide strong guidance. If you bet on a 2:1 victory of the stronger team in a soccer match, you have a better chance of being right than the...

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