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Clawing Your Way Back from a Discount

Retailers typically follow one of two approaches on price promotions: They’ll discount that PDA to $349 for awhile and then bump it all the way back up to its regular price of $499, or they’ll tout their “everyday low prices” and leave it at $449 indefinitely. But a third tactic beats both, new research indicates.

A store can generate more revenue after a $349 promotion by … [ Read more ]

Author: Michael Tsiros | Source: “Clawing Your Way Back from a Discount” | Original Publication: Harvard Business Review | Subject: Pricing

Tracking Pricing Effectiveness

Every company should have a set of pricing metrics that measure the financial and operational health of pricing across the business. These metrics may include simple data, such as the average selling price, discount, and margin for key products; operational data, including the number of pricing exceptions and win/loss percentages; and special measures to track the progress and impact of specific pricing initiatives. Best-practice companies … [ Read more ]

Author: Walter L. Baker | Source: “Building a better pricing infrastructure” | Original Publication: The McKinsey Quarterly | Subject: Pricing

An Alternative to Price Cuts When Customers Are Fearful

In a downturn, some consumers and businesses cut back because they just don’t have the money to spend. Many more prospective customers have the money but feel uncertain about the future. Spooked consumers won’t buy more until they feel that it is safe to do so, or until they decide that prices have dropped as far as they’re going to. A company needs to understand … [ Read more ]

Author: Ouriel Lancry | Source: “Price for Today and Tomorrow ” | Original Publication: Bain | Subject: Pricing