As markets mature, demand plateaus and competition gets intense. This WSJ article talks about some of the challenges American companies are facing as they try to grow their revenue. The expert quoted in this article says - "When you have such weak top-line growth, such weak demand, the competitive environment becomes much tougher, one of the … Continue reading Are you in a street fight for market share?
Every holiday season we see retailers pull out all the stops to attract customers. The biggest consumer electronics retailers—Best Buy, Wal-Mart, Target Corp. and Staples Inc. have all pledged to match their rivals' prices as in years past. Best Buy has called price matching table stakes for competing during the holidays. “The game has changed, price is … Continue reading Price Matching – A holiday tradition retailers can do without
Adobe's recently announced that their flagship product, Creative Suite, will now only sold as a subscription service. This is further evidence that the days of selling traditional, out of the box software, in a buy-to-own model is slowing down. The emergence of cloud computing is not only changing the way consumers access and use software, … Continue reading Subscription Pricing: New Ground for Enterprise Software Vendors
The reference price effect is one of the nine psychological determinants of price sensitivity1. It states that “Buyers are more price sensitive the higher the products price is relative to that of their perceived alternative.” What that means is when customers are looking to make a purchase, they judge your prices in relative terms, not … Continue reading The Reference Price Effect on Price Sensitivity
From: "Audi India Raises Vehicle Prices on Rupee Fall" The past couple of decades have seen tremendous growth in companies in America and Europe entering emerging markets, such as India, China, and Brazil. One of the challenges they have had, and still have, is implementing a global pricing strategy. Several factors make developing a … Continue reading Pricing Strategy and Execution In A Globalized World
J C Penney is moving to what they call “Fair and Square” pricing. It involves permanently marking down their merchandise by at least 40%, so there will no longer be the deep discount sales that their customers have come to expect. They will now offer only three prices – Every day Prices, Month Long Value … Continue reading JC Penney’s New Pricing Strategy – Too Bold, Too Premature
My thoughts on the Netflix pricing changes and the creation of Qwikster. Let me start by clarifying one thing - Netflix wasn't trying to increase prices. The company was just unbundling its offerings to better target its customer segments. The creation of Qwikster – a DVD rental only company - further validates Netflix’s intention to segment their … Continue reading It’s not raising prices; it’s unbundling. And making sure it stays unbundled!