OnDemand WTP Pricing Research

Discussion: Where is Pricing headed?

Pricing as a vocation has been around for a number of years but really ‘heated up’ in the last 10 years or so as companies of all sizes realize they need to better manage this critical area. Jumping on this bandwagon of recognition for having a Pricing Strategy, companies developed Pricing teams of all different sizes and all the top and middle size consultants now have pricing practices. This doesn’t even mention all the software consultants that now sell pricing software for all industries.

Now the difficult issues at hand. Even with all the emphasis on pricing there are 2 key items still missing and missing big.

1. A distinct lack of consistency in how to develop a pricing strategy to realize profit. Every company pricing team goes about this task a bit differently. To date, success overall has been limited, there’s been a distinct ‘lack of delivery’ from Price improvement plans, etc. Of course, there are going to be those folks out there who will tell they have success, etc. I wish all them well but Pricing as a vocation still suffers grandly from a lack of consistency of ‘how to’. This doesn’t exist, for example, if you’re a CPA. There is only one recognized way to file financial documents, but not so Pricing .

Top Comments

Darren Johnson

National Distribution, Pricing and Sales Incentives Manager (Director) at Toyota Material Handling, U.S.A., Inc.

Item #1 will be solved in time, as pricing curricula such as the University of Rochester’s begin to grow in popularity. Item #2, in my opinion, exists in part because business leaders have unreal results expectations. As much as we can determine customer behavior and segment customers into nice little buckets, each customer is unique and just doesn’t always respond in the logical manner that we predict they would. Add to this the fact that sometimes (oftentimes?) our competition makes moves that are contrary to logic and sound business practices. Being too overly optimistic in projection of favorable results creates disappointment and doubt within the executive teams. The pricing community as a whole, including and especially consultants, needs to become better at under-promising and over-delivering rather than the other way around.

Howard Langer

Global Capability MD – Pricing & Promotions at dunnhumby

Thanks for sparking this discussion Michael. I find it incredible that Marketing as a profession begins all Marketing 101 courses talking about the 4Ps and then does it’s best to bury its head in the sand on Pricing. Period.

I recently counted the number of Pricing courses offered by the UK’s Chartered Institute of Marketing, the flagship marketing institute. Of the 118 courses offered, there was 1 course on Pricing and this was a pricing fundamentals course. In fact, there were more courses on Project Management than on Pricing. Shocking.

Marketing have kept their head in the sand on Pricing and as defenders of the brand and price perception they should be ashamed.

The only way that Pricing becomes a Discipline is if Marketing claim ownership which doesn’t look like happening soon.

More here:

Where is Pricing headed?.