Jason Calconis has a funny post about a hotel charging $2.80 for a cup of coffee. I’m not sure how much you get to complain about coffee when you have a $400 hotel room, but the point is legit. People … Read More
retail pricing
Why Starbucks Coffee Is Cheap
Starbucks gets a lot of attention in the pricing world for their ability to charge $4+ for coffee. There are good reasons they can do this (selling something physically addictive doesn’t hurt), but that’s a different post. This post is … Read More
Supreme Court Looks at Pricing Agreements
The United States Supreme Court has taken on a case involving the legality of minimum pricing agreements. A small retailer in Texas cut prices on womens’ fashion accessories in response to similar discounting by competitors. The manufacturer threatened to cut … Read More
The Price of a Good Night’s Sleep
How much would you pay to sleep well? For someone who sleeps like a log on a 10-year-old, $400 mattress, the answer is probably: not much. For people who don’t sleep well, or don’t get enough sleep, the answer can … Read More
When the Price is the Value, Can You Price too High?
The value of many luxury items is that they have no intrinsic value, but their conspicuous consumption demonstrates the wealth and social standing of the buyer. You can therefore charge much higher prices, mainly just by charging higher prices. (You … Read More
Retailers Expect Tough Pricing Season
The New York Times (free registration required) posted Let the Price Wars Begin, noting that higher gas prices are cutting into the budgets of many shoppers. This has prompted retailers like Wal-Mart to price aggressively very early in the “holiday” … Read More
The Best Retail Pricing Strategy Ever?
Retail pricing is brutal, right? Well, for a long time, you could escape the commoditization of retail products by simply pricing higher. Price your wine at $100 per bottle and tell people that only a few cases are available. $50,000 … Read More
In Console Wars, Savvy Pricing Shots
New product launches always involve (ok, should always involve) careful price planning. The market for video game consoles highlights various aspects of pricing strategy quite nicely. Companies must balance profit (or loss) per unit, with platform profits on games and … Read More
Bear Stearns Cites Pricing In Anheuser-Busch Downgrade
Bear Stearns downgraded the beer giant, noting that they are “highly skeptical of the company’s aggressive price discount strategy.” AB’s aggressive pricing is confusing to me. They have generally enjoyed a small but significant price advantage over Miller and other … Read More
Saks Submits Documents in Markdowns Lawsuit
As noted earlier, clothing vendors have started suing retailers over payments. The heart of the matter is the actual price the customer pays for the merchandise, which then gets divided between the retailer and the maker. So if the customer … Read More