- Research Highlight
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Research suggests that people will spend more freely if you first help them feel more virtuous.
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There are several questions an organization should ask to improve its pricing strategy, including: What is the marketing strategy in this segment? What is the differential value that is transparent to target customers? What is the price of the next best alternative offering? What is the customer’s expectation of a “fair” price?
By asking these questions and others, an organization can choose a price point that provides the largest long-term value to the supplier.
Companies should spend less time trying to fool customers with hidden charges and devote more effort to competing on differences that really matter, say the authors. Imaginative managers may want to consider how a move toward honest pricing in their industry — such as unit pricing at supermarkets and the U.S. government”s Energy Star program — could help sell more and better products to a loyal customer base.
The ability to set the right price at the right time, any time — the very definition of a pricing capability — is becoming increasingly important. Based on their work with dozens of companies, the authors explain how investments in human capital, systems capital and social capital come together to form a pricing capability that competitors will have a hard time imitating.
The authors examine the theoretical and practical problems associated with trade promotions, and they explain how the right kind of deal can be created — a transparent system that generates mutual trust and provides benefits to both manufacturers and retailers. The key is proper implementation of what is thus far a little understood tool: the pay-for-performance trade promotion, in which retailers get rewarded according to how much they sell, not how much they buy.
As adapting to globalization becomes increasingly necessary, business customers are pressuring suppliers to accept global-pricing contracts. By exploring why customers want GPCs, under what circumstances the contracts are likely to profit suppliers, and how to successfully implement contracts, the authors identify preparation as the key to success.
Consumers favor retailers that save them time and energy. By understanding a retail experience from drive in to check out, companies can maximize the speed and ease of shopping and build lasting customer relationships.
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