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This Week in Pricing > 7/26/14

TWIP is a recap of the week’s top pricing strategy in the news and resources for pricing professionals. We also publish a daily digest of top pricing news, strategy expert and technology leader’s thought leadership and industry news and events.

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Asia Pricing Professionals

Asia Pricing Professionals (APP) is a not-for-profit community of pricing management practitioners. Our key objective is to raise the profile of pricing management in Asia through:

  • Organizing formal and informal meetings where we discuss the latest trends and challenges in Pricing
  • Sharing industry specific knowledge related to pricing management with interested parties
  • Building a network of industry pricing experts who are easily accessible

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The Past Week’s Top Pricing Related Headlines

Will Your Customer Leave if You Raise Their Prices? 10 Questions to Ask Yourself. | The Sales Hunter

Nothing sends fear through a salesperson more than when a customer says something along the lines of, “We are going to take our business elsewhere if you insist on raising our price.” There are many variations of this and we’ve all heard them. I can’t begin to tell you the number of times I’ve heard […]

What To Do When A Customer Says Your Price Is Too High | Forbes

For example, the most common way for a customer to say no to a deal is to say the price is too high. But a customer may have multiple reasons for saying this. Perhaps saying the price is too high is easier than getting into a lengthy discussion about the real objection, say, the seller’s […]

Mastering the fine art of pricing | Modern Tire Dealer

Pricing is more than a gross profit exercise, it’s a strategic exercise, a psychological exercise, a competitive exercise, and it can be a painful exercise. Pricing is everything, but pricing alone is nothing. We spend entirely too much time talking about pricing and complaining about pricing, and not enough time developing a real pricing strategy, […]

Is Value Pricing the Way of the Future? | IFAC

According to an increasing number of accounting practices providing professional services, billing by the hour does not make economic sense. Rather, it’s better for practices to adopt Value Pricing strategies—both to better align their and their client’s interests and to avoid commoditizing their services. Value Pricing, which sets prices primarily, but not exclusively, on the […]

Engage Your Clients With A Clever Pricing Strategy | Fstoppers

Most of us approach our pricing with some apprehension and anxiety. It is a topic of much discussion and debate among creative professionals, but with a little ingenuity, you can break away from boring pricing and use it in a way that will excite your client and build a brand identity! … One facet that […]

Is Strategic Pricing Right for Your Business | StackStreet

You are a business owner. You always want to make the best decisions for your business to grow and expand and create a bigger profit margin. You’ve heard about strategic pricing but you are not sure what to do next? At Strategic Pricing Solutions, our mission and goals are to help businesses achieve their goal. […]

How To A/B Test Price When You Have A Sales Team | Optimizely

One key element to test is price. Steven Sinofsky, a board member at Andreessen Horowitz recently wrote that, “Nothing is more critical to a software-as-a-service (SaaS) business than pricing strategy.” I totally agree and experimenting is a key piece of pricing strategy. Testing things like how price is displayed, amount to charge, and how often is all […]

How And Why Rolex Prices Have Increased Over Time | aBlogtoWatch

In this special feature article, we go on a quest to better understand what is behind the unremitting rise of luxury watch prices, and to do so, we will explore how and why Rolex prices have increased over the last 60 years. You see, while the steep increase of high-end watch prices has become evident to every discerning watch buyer on this planet, it remains difficult to point […]

Hershey Raises Prices for First Time in 3 Years as Cocoa Costs Spike | Entrepreneur.com

First came the coffee price hike, due to rising coffee bean costs. Now, with cocoa bean costs at a three-year high, chocolate makers are beginning to increase prices as well. On Tuesday, Hershey announced its first price hike in three years, with an increase of approximately 8 percent across the cocoa giant’s lines. “Commodity spot prices […]

Why Discounting Your Price is BAD Strategy | The Sales Hunter

Salespeople are quick to blame anything and everything but themselves when something doesn’t go right.  The last thing they will do is place blame on themselves, yet that is exactly where it should be. Without confidence in yourself and a process you are committed to, there is little chance for success.  Not only are you […]

How to Make Discounting Work | TOFURIOUS

Are discounts really that bad? They get certain people to buy. For example, my fiancée is adamant about eating organic foods, but I was surprised one day when she came home with a box of inorganic cookies. “There was a coupon and I had to try it.” On the other hand, I understand how discounts can […]

Discounting still king for consumers | Retail Gazette

New research has shown that simple sales promotions are enough to prompt nearly half of British shoppers to spend. 48 per cent say finding a bargain prompts them to shop while a third did so to cheer themselves up or as a reward for hard work. … Despite discounting appearing to work for retail, Mark […]

Want Better Customers? Stop Discounting AND Raise Your Prices! | The Sales Hunter

The question I asked was:  “What % of your customers buy due to a reduced price or some other type of a discount?”  His response? “Nearly everybody.” I then asked him why that was, and his response was that the prices his company offered were really too high compared to what they should be charging. […]

Big Box Pricing Strategies Offer Lessons for Small Business | Business News Daily

When it comes to pricing strategies, small businesses can learn a lot from their larger peers. When deciding where to shop, consumers will choose retailers they believe offer the lowest prices the majority of the time, not businesses that offer deep discounts every so often to try and lure customers, according to a new study […]

Surprise – Your Car Dealer May Know More About Discounting Than You Do | Software Pricing

Recently, I had a car repaired at a dealer and noticed an interesting line item on my invoice – “Competitive Discount” and a corresponding amount. Some other retail shopping experiences included competitive discounts as well. I had two reactions. Initially, I felt pretty good because I received a price break. Then, with my pricing hat […]

Box, Uber and 29-cent Tacos | Josh Hannah

My twitter is alive today with stories of Box, now offering *unlimited* file storage for just $35.  What a deal!  Consumers love the idea of getting storage, which we all know costs real money, for a low fixed price, right? Almost as much as I like me some UberX for half the cost of a […]

Is Low Price a Valid Ecommerce Strategy? | About.com

1) Is the Low Priced Approach Sustainable or Merely an Entry Strategy? I mentioned sustainability earlier, and I do think that is the most important issue to keep in mind when using the low price strategy. If you are confident you have some inherent advantages that will keep you afloat despite low prices, then sell low […]

Wal-Mart Refuses To Match Online Prices | Business Insider

Wal-Mart is well known for its aggressive price-matching policies. So an Atlanta father was surprised to discover over the weekend that the store wouldn’t match the prices listed on its own website. In a column for the Atlanta Journal-Constitution, Clark Howard wrote that he had gone to the store in search of a new Lego set for his […]

Shifting Power to Freight Carriers, Dynamic Pricing and Bigger 3PLs – What to Expect In 2014 | Business Wire

As economic growth continues to put favor back towards transportation providers, CarrierDirect expects trucking companies to seize the opportunity to invest in new technology and pricing changes. “We’re standing on the edge of a sweeping reform in technology that will allow carriers to operate more efficiently – particularly in LTL – and price their services […]

Higgle brings dynamic pricing to social shopping | FierceRetail

Social shopping site Higgle aims to blend social media and e-commerce with dynamic pricing for a new kind of retail experience. The online marketplace made its debut this week after six months of beta testing. “Higgle is the first social marketplace that integrates social discovery, dynamic pricing, group purchasing and buying all in one place, […]

Restaurant Menus Spend More Money | Business Insider

1. They don’t use dollar signs. A dollar sign is one of the top things restaurants should avoid including on a menu, because it immediately reminds the customers that they’re spending money. According to research from the Cornell University School of Hotel Administration, guests given a menu without dollar signs spent significantly more than those […]

Building Material Pricing | Whizard Strategy

I thought with this simple number that I could make a decision whether or not to consider Herman Miller.  I picked up the phone and called the Herman Miller dealer.  I got a sales rep on the phone and asked her how much the average Herman Miller chair cost.   Simple enough, I thought. She refused […]

iPhone 6 Price – Apple’s pricing strategy in USA, Canada, UK. | Evad3rs

After getting huge information on iPhone 6 full specification, release date, tech specs, features now its the time to find out the best iPhone 6 price in USA, Canada, Australia or United Kingdom. USA, Canada … market always have to bear a higher price for the iPhone smartphones. Read complete article here: iPhone 6 Price – […]

GE Opens a Pricing War Over the Connected LED Light Bulb | Greentech Media

Just over a year ago, the emergence of a sub-$10 light-emitting diode (LED) bulb was big news for the lighting industry. The same pricing trends are headed for smart bulbs too. Now, for just a few dollars more, consumers can buy a GE LED light bulb for their homes that can be controlled from a […]

Rackspace says so long to commodity cloud wars with new pricing model | VentureBeat

Cloud and hosting provider Rackspace has had it tough lately, relative to some competitors. Now the company is working to get into a more stable position. It’s taking steps away from the raw cloud infrastructure market, which competitors like Amazon and Google have taken the spotlight, and instead doubling down on a role it knows well — seller […]

Ex-Amazon Manager Gets Funding To Help Retailers Battle His Former Employer | Forbes

“Amazon has hundreds of millions of products with the ability to change prices every 15 minutes,” he says. “The average retailer has far fewer items but only changes price every one to three months.” Taking his experience from Amazon and a short stint at eBay EBAY -0.16%, Hariharan and his team of 25 in Silicon […]

Recommended Resources

Events

Conference: 3rd Annual Pricing Conference | Asia Pricing Professionals

When: August 11-12, 2014 Where: Shangri-La Hotel Kuala Lumpur, Malaysia Asia Pricing Professionals (APP) was established in 2011 by a few pricing practitioners. Since then a huge number of companies in Asia has started focusing on pricing and today it is a well known profession, just as marketing and sales. APP has grown as well and developed […]

Pricer’s Points Blogs

Pricer’s Points: Why the Amazon Fire Phone price isn’t cheap. | Matt Burnett

It’s been about three-weeks since Amazon unveiled its first smartphone to the world: the Fire Phone. Now the dust has settled it’s possible to try and understand exactly what Amazon is trying to achieve with the Fire Phone pricing. Some commentators have criticised the company for not doing what it’s done in the past with the […]

Pricer’s Points: The curious case of doing value based pricing for “commodities” | Jesper Hansson

I hear people use sentences like: “That is a commodity, so the market dictates the price” and “You will only sell commodities if you have the same or lowest price in the market compared to your competitors”. It’s great to get these arguments thrown at you because I like to discuss pricing and it is […]

The “68% off” story: Part II | Susan Lee

A few days ago I posted a real-life story about buying my favorite ground coffee at 68% off regular retail from a local supermarket. For those of you who are new to this story, you can check it out here. This topic seems to have struck a chord because many of you have emailed me after the […]

Top Discussions

Discussion: Year-End Price Discounts – Is This a Good Idea?

The Sales Hunter Blog Unless you’re confident you can make up the volume you’ve moved forward, the only thing you’ve done is create another problem that you will need to deal with. First, if you must offer a discount to make the year-end number, offer the discount to a customer or group of customers in […]

Discussion: Why Free Plans Don’t Work

Software by Rob Article Not too long ago it seemed like every product I knew was offering some sort of free plan. The strategy was brilliant: get loads of people using your product and eventually turn them into paying customers. Everywhere I looked there were stories of people making money hand over fist with this […]

POLL RESULTS: What was the best Pricing Strategy in the News Case Study of 2013?

Results: JCPenny was clearly the most compelling Pricing Strategy Case Study in the News for 2013. The ongoing Uber surge pricing story was a distant second with half the votes of JCPenny. Netflix was third with Amazon and Apple rounding out the top five. The poll stirred up some great observations and lessons learned, worth your time […]

Discussion: Farmers in fear after Tesco cuts price of milk

Telegraph Article Worries that Tesco move is first shot in price war that will squeeze dairy farmers A price war between Britain’s biggest supermarkets looks set to break out with Tesco today firing the opening salvo by slashing the cost of milk. The country’s biggest supermarket chain is cutting the cost of four pints of […]

Books

Book: Asking About Prices – A New Approach to Understanding Price Stickiness

Summary: Asking About Prices offers a groundbreaking empirical approach to a puzzle for which theories abound but facts are scarce. Why do consumer prices and wages adjust so slowly to changes in market conditions? The rigidity or “stickiness” of prices is central to the Keynesian economic theory and vital to understanding hom monetary policy works, […]

Book: Beating the Commodity Trap – How to Maximize Your Competitive Position & Increase Your Pricing Power

Summary: Commoditization-a virulent form of hypercompetition-is destroying markets, disrupting industries, and shuttering long-successful firms. Conventional wisdom says the best way to combat commoditization is differentiation. But differentiation is difficult and expensive to implement, and keeps you ahead of the pack only temporarily. In Beating the Commodity Trap, Richard D’Aveni provides a radical new framework for […]

Book: Cheap – The High Cost of Discount Culture

Summary: From the shuttered factories of the Rust Belt to the strip malls of the Sun Belt-and almost everywhere in between-America has been transformed by its relentless fixation on low price. This pervasive yet little- examined obsession with bargains is arguably the most powerful and devastating market force of our time, having fueled an excess […]

Cartoons

One should always take a little time out to enjoy the lighter side of their profession. Enjoy the following samples from our collection of our favorite pricing related cartoons.

Price Transparency

Quotes

One should always take a little time out to enjoy the lighter side of their profession. Enjoy the following sample from our collection of our favorite pricing related quotes.

“Pricing is actually pretty simple…Customers will not pay literally a penny more than the true value of the product.”

     – Ron Johnson

“The value of money comes from the private sector in the form of price for product, services rendered, what people are willing to pay for something they want or need. That’s where value happens.”

    – Rush Limbaugh

Other Resources

Report: Simon-Kucher & Partners’ Global Pricing Study 2012

Global Pricing Study 2012: Pricing power drives higher profits when top management takes an active leadership role in pricing and puts a pricing organization in place, a worldwide study by Simon-Kucher & Partners reveals.

Pricing pressure in the Asia-Pacific region is increasing while economic growth rates are slowing down. A strong commitment from top management to pricing – combined with a dedicated pricing organization – is essential to protect and boost profits in today’s slow-growth economic climate. This is the key insight from Simon-Kucher & Partners Global Pricing Study 2012*, an in-depth survey of over 2,700 executives and managers from China, Singapore, Malaysia and almost 50 other countries in Asia, the US and Europe.

Report: Gartner, MarketScope for Price Optimization and Management Software for B2B: 2013

The 2013 MarketScope for PO&M helps clients evaluate vendor software and service offerings, as well as align their price management strategies with the major trends affecting pricing professionals. The findings in the MarketScope are based on primary research conducted by Gartner, client interactions and inquiries on the multiple considerations that are part of developing a PO&M strategy, and Gartner research in technology and business adjacent to price management.

Too many salespeople and companies look at profit the wrong way! I meet so many people who think if they can just get the sale — even at a discount — then they will eventually make up profit in the long run.  But quantity of sales won’t ever make up for quality of sales! You […]

Report: European Pricing Maturity Study | EPP

Pricing power is one of the key ways that businesses can create value for themselves. Improving a company’s approach to pricing leads to more opportunities to create and capture value for customers, which results in increased sales and healthier margins. Developing pricing maturity takes time and effort, but understanding how to capture what customers perceive as valuable provides greater opportunities for companies to perform better in their chosen markets.

The PricingBrew Journal

Whether you’re in sales, marketing, product management or a pricing professional, it’s important to stay up-to-date on the latest practices and research in B2B pricing—and get fresh perspectives and ideas that can help make your business (and career) more profitable.

The PricingBrew Journal is the only publication of its kind, providing a regular dose of real-world experience and insight from the PricingBrew research team and a global network of seasoned B2B pricing professionals and consultants. Every two weeks, subscribers get access to in-depth articles, training, research, best practices, case studies, expert interviews and educational webinars.

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About Pricing News

Pricing News is a sponsor supported organization dedicated to providing free high-value resources to pricing professionals. It is the source for daily and weekly digests of pricing strategy and industry newsevents, thought leadership articlesblogsreportsacademic research, and other resources and special offers. We also share highlights from top pricing discussions and publish articles from pricing practitioners in our Pricer’s Points blog series.

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Until next week,

Matt Balfour

Founder & Managing Director of Pricing News