When Customers Help Set Prices Harvard Case Solution & Analysis

Pricing has always been remain as a private issue for the companies. The article provides help to managers who utilized their competencies to evolve and who continually develop their product to strengthen their bottom lines. The authors present enlisting the pricing help of their customers as an effective approach to generate revenue, in contrast to the product differentiation approach. Outsourcing pricing is not only an inflexible result idea. Managers could pursue different approaches for pricing ranging from complete supervision to completely outsourcing. The article combines the classic perspectives on pricing with the current models to introduce a framework that could determine the range of control a manager should have on pricing and how much he should hand over to customers, by referring to some leading companies' examples, including Coca Cola, Volkswagen, Google, Humble Bundle, Orbitz, and Uber. The standard criteria followed by most of the companies is to have a fixed price and sell to the customers who could pay that price. But this default approach is criticized by the authors, Oded Koenigsberg and Marco Bertini, as they considered it an ineffective approach in generating  revenue: The customers who could pay more than the price receive a discount; the customers pay less but enough for profit are turned away. The authors present three collaborative frameworks: auctions, name-your-own-price auctions, and negotiations,  for the companies interested in integrative approaches to pricing. The authors argue that to incorporate the customers while determining the prices could create positive results that go beyond promoting greater efficiency. This approach along with increasing the market shares also helps to support the customization, customer engagement, and helps managers to receive the diverse opinions of customers about their company or product.

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