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Lately, we’ve had a lot of conversations with businesses that are ramping up “strategic pricing“. They’ve adopted more systematic approaches to pricing and have taken responsibility for setting prices away from salespeople. This transitions price away from the team worried about closing a sale to specialized pricing people who are worried about generating profits that meet company goals. That’s terrific…. Read More

When is a Price War, Not a Price War?

Posted 03 Aug, 2017 | Posted in: News
Richard HarringtonWritten by Richard Harrington

When is a price war, not a price war? A price war is brewing over the skies of Europe.1,2 The low-fare section of the market is known for its brutally low prices, as it slashes extras to appeal to budget conscious travelers. This week, Michael O’Leary, the Chief Executive of Ryanair, Europe’s biggest airline (by number of passengers), fired the… Read More

Channel Conflict With Nike and Amazon

For over a decade, athletic titan Nike declined to partner with Amazon, America’s largest online retailer. Nike held out, wanting to carefully control brand messaging while enjoying higher margins through its distribution network of brick and mortar stores. On June 29th, Nike conceded by confirming a deal with Amazon to sell and distribute apparel and footwear. Ironically, consumers may not notice… Read More

Dynamic Pricing Warning

Dynamic Pricing Should Come with a Warning Tag

Posted 26 Jul, 2017 | Posted in: Newsletter, Pricing | Tagged: , , ,
Richard HarringtonWritten by Richard Harrington

With astonishing speed, Uber has disrupted the taxicab industry. Others have looked at their success and dreamed of emulation. The strategy often touted for Uber’s success is surge pricing; charging higher prices at times of high demand. Surge pricing is an example of dynamic pricing, where the price fluctuates depending on one or more factors, like the demand for ride service…. Read More

Pricing impact on profitability

  In a recent HBR article, “Linear Thinking in a Non-Linear World,” the authors explain how our minds are naturally biased to assume every relationship between two variables is linear. We are trained to think that the impact on Y with a change in x will be in a fixed/constant proportion. Often, this is not the case and can lead… Read More

Is lowering your price a good product strategy

This is a story of a highly specialized drug, Ilaris, which is sold by Novartis for $16,000 a dose or $64,000 a year. They sell to under 10,000 patients a year. Novartis discovered that the drug may also have a beneficial impact on heart attack survivors. There are 615,000 survivors a year, 246,000 of whom would benefit from the use… Read More