In a previous post (Be Better, Not Cheaper) I talked about the importance of differentiated value. I have conversations about value almost as often as I have conversations about pricing, because a lot of pricing confusion is really value confusion. If you don’t know what your value is, it’s hard to put a price on [...]
Who doesn’t love a bargain? We all do, and we know our customers do, too. But that doesn’t mean price is the only thing that’s important. It becomes the only thing that’s important if everything else is the same. Many companies feel they don’t have good differentiation, so they have to compete on price. When [...]
This summer, Steve Silberman over at Wired wrote a great article called “Placebos Are Getting More Effective. Drugmakers Are Desperate to Know Why.” While the implications for pricing in the pharmaceutical industry are obvious, there are also important analogies to pricing activities in a much broader range of companies. The article discusses how big pharma [...]
I wrote a couple weeks ago about Value, Scarcity and Pricing in the Age of Superabundance. Now there’s a timely report about the concentration of profits among cell phone makers from Bernstein Research analyst Toni Sacconaghi. Sacconaghi estimated that while Apple only accounts for 8% of the revenue among handset makers, it gobbles up an [...]
Unless you’ve been assiduously avoiding the news lately, you probably heard that Apple announced a new iPhone model yesterday at their World Wide Developer Conference (WWDC), along with updated laptops and various software updates. Most of the news coverage focused on these items, but the real story was buried. For the first time in years, [...]
We mentioned in a previous post that Microsoft is in the grips of a pricing dilemma. Changing paradigms have weakened Microsoft’s dominant position in operating systems and office productivity programs. Businesses and affluent consumers no longer upgrade regularly. What they have now is good enough. Developing markets that don’t need to maintain backwards compatibility with [...]
When commodity prices surged and governments around the world pumped hundreds of billions of dollars into markets, crippling inflation was a major risk. However, demand is so soft that the Consumer Price Index (CPI) fell a record 1.0% in October. With the critical holiday buying season coming up, a lot of retailers aren’t even pretending [...]
Wired editor-in-chief Chris Anderson recently wrote a provocatively-titled article called Free! Why $0.00 Is the Future of Business. Anderson argues that the economics of computing on the net, where storage and bandwidth costs fall even faster than the cost of processing power, will drive the price of many services to the marginal cost– in other [...]
Have you been part of a discussion where everyone at your company believed that their offering provided more value than a competitor’s, but the customers just don’t see it? The marketing team often thinks sales doesn’t know how to sell the value. The sales team thinks that marketing is clueless. And the pricing team is [...]
A French court ruled that Amazon’s free shipping policy violates a law that forbids booksellers from discounting more than 5% off list price. Rather than stopping the practice, Amazon has upped the ante, continuing the policy in the face of a €1,000 per day fine, and soliciting customers to sign a petition in favor of [...]
