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The JC Penney Board of Directors fired CEO Ron Johnson yesterday after a year and a half of deteriorating results. The consensus during that time was that Mr. Johnson’s pricing strategy was a disaster. For me that is too simplistic an answer; and anytime we settle on a quick simplistic answer in pricing, we run […]
Earlier this week, Netflix increased their price for their most popular offering by 60%. That move garnered plenty of attention and reaction, some quite vocal. As a Netflix subscriber, I was shocked by the size of the increase, but I have not decided whether to change my subscription, cancel it, or just pay the […]
Lately I have been asked a common question, “We’re in a recession and my volume is off; should I lower prices?” Of course, the answer is never simple, but there are a number of questions that can help us think through the problem and come up with a reasonable answer. What is happening with prices […]
Ok. It has been awhile since my last blog entry. I guess I don’t find interesting articles about pricing all that often. But I think this one, although not overtly about pricing, is terrific. The article, “Claiming a Large Slice of a Small Pie: Asymmetric Disconfirmation in Negotiation” was written by George Wu and Richard […]
Bob Smizik, a columnist for the Pittsburgh Post-Gazette thinks sports teams, their stadiums, and their contract concession providers are perpetrators of “world class price gouging”. He thinks they have no conscience because they charge $6 or $7 for a beer and $3 or $4 for a soda. I don’t agree, for several reasons. I […]
We all know more than a few people who bought Apple iPhones the first day they were available, June 29th. Some people feverishly called around their city to find stores that had them. Others stood in line at AT&T stores. But all of those people paid premium prices for the phones, which have a cool, […]
I recently read the paper “An Economist Sells Bagels: A Case Study in Profit Maximization” by Steven D. Levitt, author of Freakonomics and economics professor at the University of Chicago. (Pardon me for not typing the full text of his title) As usual for Dr. Levitt, the paper is very well written in a way […]
On March 27th an article in the Wall Street Journal highlighted the moves by Parker Hannifin over the past few years to improve the strategic dimension of their pricing practices. The transformation at Parker during the past 5 years has been outstanding, and has improved operating income by $200 million. The company segmented their customers […]
