Is It Time to Rethink Your Pricing Strategy Harvard Case Solution & Analysis

In many companies, the prices received surprisingly little attention. After work, which included a review of pricing in 15 small and medium-sized companies, the authors conclude that most companies can improve their pricing capabilities and, consequently, their profitability over time, taking a disciplined approach. The authors identify two key elements of pricing orientation prices and prices received, and five levels of prices of options. They note that the companies they studied, which achieved the best prices were top managers who supported the development of prices of skills. While competition, cost and price sensitivity in the market affect the settings in which companies set prices, high prices are almost always based on the skill, the authors say. Companies differ in their approach to pricing, but most fall into one of three segments: a cost-based pricing, competition, pricing and customer value-based pricing. Customer value-based pricing uses data on customer perceived value of the product as the main factor to determine the final sale price, and many scientists believe the customer value-based pricing is often to be the preferred approach to pricing on existing products. The authors claim that according to their research, many companies can improve their pricing capabilities, cultivating their understanding of the value they bring to their customers. But the realization of customer value-based pricing is not easy, the authors warn. They believe that the development and implementation of complex, customer value-based pricing program is a long-term project that requires a high degree of attention and executive requires significant changes in the processes and thinking in the company. "Hide
by Andreas Hinterhuber, Stephen Liozu Source: MIT Sloan Management Review 9 pages. Publication Date: July 1, 2012. Prod. #: SMR423-PDF-ENG

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