All products have a price “band” with high and low values. Marketing efforts, margin and supply chain performance can have a profound effect on the elasticity of price. Value drivers™ both internal and external, will determine how stretchy the price band truly is.
There are many ways to enhance an offering without sacrificing price. How does a firm convey value without cheapening their product? Often times, companies will offer global incentives to buy from them versus a competitor. Incentives are an abstract way to offer value. For example, providing a free freight incentive if the customer spends over a particular dollar amount. An in-store incentive would be loyalty points. These incentives are used over and over because they work. This means products can be priced slightly higher (known as skimming) and they will sell more because of the abstract incentives.
Dave Leonard is the CEO of Advanced Pricing Logic. He has over 30 years of executive management experience in multi-channel retail, distribution, manufacturing, and catalog merchandising. Mr. Leonard has extensive experience in the area of technology analytics as it relates to price optimization for the mass marketer, inventory control and
optimization, purchasing optimization, and consumer pricing psychology.
At Advanced Pricing Logic we are dedicated to designing innovative analytic software that makes our customers more profitable. Our software transforms data into insight and provides the platform to turn insight into action. Designed by business professionals, our software follows three guiding principles: encapsulate world class analytics, enable customers to take sound action through easy to use applications and ensure ROI less than a year after purchase.
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