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This Week in Pricing > 9/13/14

TWIP is a recap of the week’s best pricing focused news, strategy expert and technology leader’s thought leadership, industry news and events, and resources for pricing professionals.

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Strategic Pricing Associates

SPA is the leading provider of pricing analytics to 100′s of complex companies of all types: manufacturing, distribution, equipment, services, and software/technology products. The benefits are staggering; and they are typically accomplished in less than 90 days. Our typical client improves profitability by two to four percent of sales. SPA Clients include over 200 manufacturing companies including Parker HannifinRockwell,GEExxon MobilCaterpillar as well as over 400 distributors including Harry Cooper Supply CompanyIndustrial Distribution GroupAH Harris, and ThermoFisher Scientific.

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The Week’s Top Headlines

How to Present Your Price and Get It! | The Sales Hunter

After you have determined these variables, you can then present your price.  Always present your price in person unless geographical limitations prevent you from doing so. Have 2 prices ready to present. First price you will offer is high — very high — but in the price you are including a number of other things […]

Consumers benefit from supermarket pricing wars | The Scotsman

Retailers are continuing to cut prices in a bid to woo cash-strapped shoppers, according to a report published today that shows intense competition in the grocery sector has kept food inflation at a record low. With discounters such as Aldi and Lidl piling the pressure on major supermarkets, the British Retail Consortium (BRC) said food […]

Apple CEO, other execs hit with shareholder suit over ebook conspiracy | GIGAOM

Apple shareholders are suing CEO Tim Cook along with some of the company’s other executives and directors, claiming that their role in a price-fixing conspiracy with publishers damaged the company. According to a complaint filed on Thursday in California state court, Cook and other senior Apple figures bear “responsibility for ensnaring Apple in a multi-year anticompetitive […]

In E-Book Price War, Amazon’s Long-Term Strategy Requires Short-Term Risks | NPR

In a statement Amazon says e-books should cost less than traditional books because publishers don’t have to pay to print, store and distribute physical objects. “What Bezos is arguing is that it’s really two different business models,” Bajarin explains. “I’m going to tell you: I will be really surprised if Jeff backs down on this.” […]

New Research Helps Find The Perfect Strategy For ‘Freemium’ Business Models | Forbes

The freemium business model–where products are provided free of charge at the basic level, but are paid for by subscription at higher levels with richer functionality– has become one of the dominant methods for launching digital media.  Even established players such as Microsoft MSFT +0.33%, a company which used to be allergic to “free,” is now exploring […]

European Commission Challenges Differential Pricing by Car Rental Companies | Mason Hayes Curran

The European Commission has challenged the practice by car rental companies of using consumers’ countries of origin and IP addresses to determine the price that they are charged, alleging that this constitutes a form of discrimination. In general terms, each computer or device on the internet is assigned an Internet Protocol or “IP” address. Due […]

Dynamic pricing horror stories | The Quest for Optimality

The hotel industry has accepted these principles behind revenue management and dynamic prices. Many of these dynamic pricing strategies are driven by OR- or analytics-based models, too. Too much of a good idea can turn into the opposite of the original intent. Indeed, drastic changes in prices caused by complex real-time pricing strategies can confuse […]

Learn from Your Analytics Failures | Harvard Business Review

In pre-Big Data days, for example, a hotel chain used some pretty sophisticated mathematics, data mining, and time series analysis to coordinate its yield management pricing and promotion efforts. This ultimately required greater centralization and limiting local operator flexibility and discretion. The forecasting models—which were marvels—mapped out revenues and margins by property and room type. […]

Three ways manufacturers use sales strategy to address pricing pressure | Chief Sales Digest

There is no magic wand. No matter how much you want to be a magician, waive a wand and make it disappear, price pressure remains one of the most irritating, profit-threatening challenges facing manufacturers. What can you do to address pricing pressure? The classic response to this question is innovate new products that offer greater differentiation. […]

The Silent Killer of New Products – Lazy Pricing | Harvard Business Review

HBR: Is new products’ high rate of failure really a pricing problem, or does it reflect a more fundamental innovation problem? Georg: We believe that there is a more fundamental problem. Of course, the pricing is always what signals the problem, but behind that it is how the innovation process is set up. However, our […]

U2 Gives Away New Album NOW, Skip Charts, And Who Cares? No Money in CD Sales | Showbiz411

Album sales have vanished. The most U2 would sell in its first week, if they were very very lucky, would between 300,000 and 500,000 copies. And that’s being extremely optimistic. It’s not worth the price of printing them up. Just give it away, and make the money through publishing, which the group owns, and concert […]

Apple announces Apple Watch pricing and availability | 9to5Mac

Possibly the most highly anticipated announcement from its special event today, Apple announced that customers will be able to purchase the newly announced Apple Watch starting “early next year” in 2015. The Apple Watch will be available in various configurations differing from collection, size, and band. Price wise the wearable will start at $349 and go up. Compatibility for the […]

Experiment 8 – Guess It, The Hack That Wants You To Play “The Price Is Right” For Discounts When You Shop | TechCrunch

The team behind Experiment 8 – Guess It has a terrible name and a simple idea: Guess the price of any product on its website correctly and get a deep discount. Come close and get a smaller one. Their vision is to gamify the shopping experience and breathe new life into the moribund model that existing […]

Law Schools Boost Enrollment After Price Cuts | WSJ

Educators have taken steps to cut costs and boost enrollment amid the dearth of new students, shedding staff and faculty, retooling course offerings, and increasing aid. Yet though rises in tuition have outpaced inflation, only a few schools have turned to price cuts. Last year, the average tuition and fees for private law school were […]

Woolworths committed to cutting prices in battle with Coles, Aldi | Sydney Morning Herald

Woolworths says it will invest $750 million into reducing food and liquor prices in 2015 and has refuted analyst claims that it has taken its foot off the promotional pedal to boost profits. As Coles unveiled plans to reinvest cost savings from a $38 million redundancy program into cutting grocery prices and fixing up stores, Woolworths reiterated […]

Apple iPhone 6 Pricing Leaks Before September 9 Launch. | Youthpace

Affirmed valuing of the yet to be uncovered Apple iphone 6 have been making rounds online. The spilled numbers uncover the potential price of both the 4.7″ and the 5.5″ model. The alleged leak uncovers the estimating of both the iphone models. According to the spilled screenshot, the 4.7-inch iphone 6 for the 16GB mode will […]

Amazon Cuts Struggling Phone’s Price to 99 Cents | NYTimes.com

On Monday, Amazon took a drastic step to avert disaster, announcing that it would charge 99 cents for the phone, basically giving it away if users signed a two-year contract with AT&T, the exclusive carrier. Amazon has money to burn, and a relentless determination. But some analysts still wondered if a price drop of almost […]

The Postal Service rolls the delivery dice | DC Velocity

The U.S. Postal Service (USPS) will face various tests on its path toward true parcel delivery legitimacy. One of its most important tests has already commenced. On Aug. 15, the Postal Regulatory Commission, the body that rules on the agency’s pricing actions, approved a USPS proposal to radically reduce rates on two of its “Priority […]

Retail re-ticketing: Stores caught marking up prices | CTV Vancouver News

Several major retailers are facing the wrath of consumers after getting caught marking up prices and then holding big sales to make it look like the merchandise was deeply discounted. Extreme couponer Jhenelle Ryan first noticed the re-stickering when she saw jeans on sale recently at the Gap outlet. “I thought to myself, what a […]

ENTREPRENEURSHIP – Pricing is key to competitiveness | Finweek

When considering all the reasons you became an entrepreneur, you simply can’t get away from the fact that your primary aim was to make money.  Making money, however, depends on being able to accurately calculate the correct price for your product or service on the open market. Although this may seem simple, the reality is […]

The Role of Pricing Departments | Pragmatic Pricing

Most people don’t know pricing, and most people don’t know they don’t know pricing. More and more companies are building pricing departments in recognition of these two “facts”. I’ve seen several different ways of organizing pricing, but one seems to stand out, especially for large corporations. These effective pricing departments essentially act as internal pricing […]

Why You Shouldn’t Be Afraid to Show Your Prices on Your Website (Video) | Firefly Coaching

There are reasons for sharing and reasons for not sharing. The most important things is to think about it and be clear about the decision you make, either way. I have a preference for one and I’ll tell you all about it in the video. Read complete article here: Why You Shouldn’t Be Afraid to […]

A significant shift in strategic thinking in law firms is needed | Beaton Capital

Pricing Firms face three challenges around profitability in a demand-driven market: Matching the price to the value perception of the client ahead of doing the work rather than discounting after doing the work; Managing the cost of doing the work so that it meets the price for the client and the target profit margin for […]

What Once Was Free – A Guide to Implementing Fees on Freebies | Connected Strategy Group

1. Understand What Customers Value It’s a given that you’ll need thick skin to absorb the inevitable negative feedback, but you can head-off the skeptics by aligning your value proposition with the pricing strategy. The intent of the freebie was likely to endear you to new clients, reward existing customers, or distinguish yourself in the […]

 

Recommended Resources

Events

Webcast: Learn How IPS Corporation Uses Strategic Pricing Tools to Track Sales Force Accountability | SPA

Tuesday, October 14, 2014 2:00 PM Eastern Register to attend our webcast that starts at 2:00 PM EST where Nick Cassella, President of IPS Corporation’s Plumbing Group will share their journey to pricing excellence and how they are leveraging strategic pricing tools to track sales force accountability. To implement a solution that enhanced profitability, 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: Pricing maturity and internal control | Jesper Hansson – CPP

We all like to look at companies with our pricing practitioner eyes and try to establish how mature they are in their pricing management processes. There are several different models available today which tries to ‘score’ a company. One of the most frequently used is a 5 step maturity model which goes from a mild […]

Pricer’s Points: How to Transition Your Organization From “Gut” Pricing to Data-Driven Pricing | Marc Folch

As the competitive landscape evolves and the pace of pricing change accelerates, data-driven approaches are increasingly becoming a requirement to stay competitive. One of the most important things to remember is that data-driven pricing does not necessarily replace good gut instinct. When implemented properly, data supports, informs and improves those instincts by providing better information […]

Top Discussions

Discussion: The Price War Over The Cloud Has High Stakes For The Internet

NPR Article This week, our tech reporting team is exploring cloud computing — the big business of providing computing power and data storage that companies need, but which happens out of sight, as if it’s “in the cloud.” It’s a timely topic, since there’s a price war going on as tech titans aim to control the cloud market. Amazon […]

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: Four Reasons Why Your Salespeople Discount

Pragmatic Pricing Blog Of course sometimes sales really needs to discount in order to close the deal. If we want the business we need to discount. However, this then becomes an easy excuse for why we discount every deal. If you want to reduce discounting by your sales force, address these four issues: price fairly, […]

Discussion: Pricing discipline in a complex decentralized organization is a headache

Pricing Strategy & Optimization LinkedIn Group Discussion Local managers may disregard central pricing recommendations. Moreover they may give a lot of latitude to their salesforce. The end result is chaos and far from optimal. All comments welcome! inspire me… Top Comments Wendy Wise High Tech Marketing and Sales Strategist I hear you. Have been there […]

Discussion: A common denominator for pricing and negotiating Business Intelligence (BI) and Analytics software

Forrester Blog BI and analytics software packaging and pricing are a Wild West with few common practices among the vendors. Comparing and contrasting vendor prices and negotiating with vendors is challenging because Few vendors publish list prices, so when a vendor tells you you are getting a certain discount you can’t really verify whether the discount numbers are […]

Books

No B.S. Price Strategy – The Ultimate No Holds Barred Kick Butt Take No Prisoners Guide to Profits, Power, & Prosperity

Summary: Millionaire maker Dan S. Kennedy and pricing/marketing strategist Jason Marrs empower small business owners to take control of their profits by taking charge of the source: their price. Entrepreneurs are dared to re-examine their every belief about pricing and take a more creative, bold approach, using price to their extreme advantage and allowing them […]

Not For Free – Revenue Strategies for a New World

Summary: It used to be only dotcom start-ups lacked workable business models. But now the ubiquity of cheap communications and computing is deeply wounding business models across the board. Combined with rapidly changing customer expectations, the rules for how value is delivered, and what, when, and how much customers will pay are in flux. What […]

Power Pricing – How Managing Price Transforms the Bottom Line

Summary: In today’s hyper-competitive global marketplace, a company’s pricing policy can make or break the bottom line. Yet a surprising number of firms attempt to increase profits without the aid of a carefully and creatively designed pricing strategy. Now, in this long-awaited book, the world’s two leading price experts Robert J. Dolan and Hermann Simon […]

Cartoons

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 cartoons

Discounting

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.

“Price is what you pay. Value is what you get.”

     – Warren Buffett

“Perhaps the reason price is all your customers care about is because you haven’t given them anything else to care about”

     – Seth Godin

Other Resources

Report: Pricing for penetration | Bain & Company

Pricing has long been one of the most vexing challenges for consumer goods companies. Many face ballooning trade rates with collapsing ROIs, volatile commodity prices pressuring gross margins, contentious customer negotiations and sticky retail price points. Now, with mounting evidence that household penetration is the most important factor for growing brands, more consumer goods executives […]

Article: You Can’t Cheerlead Your People to Pricing Success | Strategic Pricing Associates (SPA)

Read our article about the keys to getting your sales people on board with a proven process to drive your pricing plan forward. Excerpts of the article follow. “the deck is stacked against you from the start” The sad truth is the deck is stacked against you from the start. Customers are constantly pushing backwards […]

Video: Pricing Manager’s First Day

A very popular pricing animated video that captures the struggles that come with being a Pricing Manager. Pricing Manager’s First Day  Tanglethatch

Training: Online Courses | Stephan Liozu

Please find below the links to several online courses prepared for Professional Pricing Society as well as free-of-charge webinars on the themes of value and pricing. SAMA: Value Quantification in Strategic Account Management (Registration Required) – 2013 SAMA: Value Quantification – Working on Economic Value Estimation (Registration Required) – 2013 Pros Pricing: is it Time […]

Blog: Strategic Pricing Newsletter – August 2014 | Strategic Pricing Associates (SPA)

Inside this edition: President’s Message Recent Articles Case Studies Upcoming Events Past Event Highlights Message from SPA President, David Bauders What happens when a salesperson does not capture price increase? Lately distributors are reporting a new flurry of price increases from their supply-partners. Each iteration requires a decision. Do we risk rocking the boat and […]

Paper: Making Money by Giving It for Free – Radiohead’s Pre-Release Strategy for In Rainbows | Harvard Kennedy School

Abstract In 2007 a prominent British alternative-rock band, Radiohead, pre-released its album In Rainbows online, and asked their fans to “pick-their-own-price” (PYOP) for the digital download. The offer was available for three months, after which the band released and commercialized the album, both digitally and in CD. In this paper, we use weekly music sales […]

Pricing News LinkedIn Group

Join 1,000’s of your peers in the our LinkedIn discussion group. The group offers a place to share the latest pricing strategy and technology, news, events, resources, thought leadership, and discuss the latest pricing related successes and failures in the news.

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.

Join the Pricing News LinkedIn group and learn from your pricing peers and industry thought leaders or get your Pricing News on Twitter or Google+.

Until next week,

Matt Balfour

Founder & Managing Director of Pricing News

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