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Tag: Harvard Business Review

How Pharma Companies Game the System to Keep Drugs Expensive | Harvard Business Review

How Pharma Companies Game the System to Keep Drugs Expensive | Harvard Business Review

I help the University of Utah hospital system manage its drug budgets and medication use policies, and in 2015 I got sticker shock. Our annual inpatient pharmacy cost for a single drug skyrocketed from $300,000 to $1.9 million. That’s because the drug maker Valeant suddenly increased the price of isoproterenol from $440 to roughly $2,700 […]

How Retailers Should Think About Online Versus In-Store Pricing | Harvard Business Review

How Retailers Should Think About Online Versus In-Store Pricing | Harvard Business Review

Should brick-and-mortar retailers set different prices in-store and online? If Amazon (or another web retailer) is not significantly stealing business away, it doesn’t make sense to slash online prices. Best to accept the minimal customer loss, maintain current prices, and be thankful. However, if a web retailer is successfully poaching a sizable number of customers, it’s time to […]

How the Very Best Strategists Decide | Harvard Business Review

How the Very Best Strategists Decide | Harvard Business Review

When it comes to setting strategy, which is more effective: one great thinker or a wise crowd? To find out, I turned to my ongoing Top Pricer Tournament, in which 884 people — managers, consultants, professors, students — make pricing strategy decisions for a generic business competing against other generic businesses. The decision options available […]

Global Companies Need to Adopt Agile Pricing in Emerging Markets | Harvard Business Review

Global Companies Need to Adopt Agile Pricing in Emerging Markets | Harvard Business Review

One day in December 2014, Sergey, the Russia general manager for a multinational consumer goods company, was up early in the morning, watching the ruble’s value slide by the minute. As the currency was crashing, he found himself facing a painful dilemma: either raise prices to recoup the losses and hit his annual target — set […]

How to Stay in Premium Hotels Without Blowing Your Expense Account | Harvard Business Review

How to Stay in Premium Hotels Without Blowing Your Expense Account | Harvard Business Review

Package pricing. It’s commonly believed within the hotel industry that business travelers will pay more than leisure vacationers. (Usually, this is true.) To create discounts for leisure travelers, many hotels provide significant price breaks  (25% – 50%) if their property is booked as part of a vacation package (air-hotel or air-hotel-car rental). Packages are offered […]

The Best Retailers Combine Bricks and Clicks | Harvard Business Review

The Best Retailers Combine Bricks and Clicks | Harvard Business Review

Retail profits are plummeting. Stores are closing. Malls are emptying. The depressing stories just keep coming. Reading the Macy’s, Nordstrom, and Target earnings announcements is about as uplifting as a tour of an intensive care unit. The Internet is apparently taking down yet another industry. Brick and mortar stores seem to be going the way […]

Your New Hit Product Might Be Underpriced | Harvard Business Review

Your New Hit Product Might Be Underpriced | Harvard Business Review

The odds are stacked against new products or services. Between 65% and 75% miss their revenue or profit goals, depending on whose research you look at. We have diagnosed thousands of product failures over the last 30 years, and have found recurring patterns. Often new products are over-engineered with too many features, usually at too high a […]

Are You Really Getting a Discount, or Is It Just a Pricing Trick? | Harvard Business Review

Are You Really Getting a Discount, or Is It Just a Pricing Trick? | Harvard Business Review

The New York Times recently detailed the prevalence of misleading retail reference prices — a term I use to include list price, original price, manufacturers’ suggested retail price, etc. As reporter David Streitfeld noted, a check at various sellers for a Le Creuset skillet found reference prices ranging between $250 and $285 — but most […]

Who Has the Power to Cut Drug Prices? Employers. | Harvard Business Review

Who Has the Power to Cut Drug Prices? Employers. | Harvard Business Review

Why do medications cost so much, particularly specialty drugs that treat the most serious conditions? Mostly because U.S. drug companies can price them however they want. Some of their justifications are reasonable — for instance, high prices fund research. Others, like the notion that drug treatment lowers total medical costs, are far from proven. But […]

The Customers Who Are Happy to Pay More for Less | Harvard Business Review

The Customers Who Are Happy to Pay More for Less | Harvard Business Review

Size is perhaps the most neglected marketing tool. On a search of EBSCO’s Business Source Complete, I counted no less than 1,890 articles published in marketing journals in the past 10 years about price, but only 22 addressing package or service size issues. It seems that marketing managers seldom question the product sizes they’ve inherited. […]