The team's a winner– so the prices are going up
Sports Illustrated reports that the AL Champion Tampa Bay Rays are raising ticket prices $1-$5 next year, following their first winning season. Tickets for most games will cost $10-$210, although some...
View ArticleWhat's worse than inflation?
When commodity prices surged and governments around the world pumped hundreds of billions of dollars into markets, crippling inflation was a major risk. However, demand is so soft that the Consumer...
View ArticleThe hidden story from Apple's WWDC
Unless you’ve been assiduously avoiding the news lately, you probably heard that Apple announced a new iPhone model yesterday at their World Wide Developer Conference (WWDC), along with updated laptops...
View ArticleClik here to view.
Real vs. Perceived Value
If your maximum price is determined by the perceived differential value of your offering, how do you know what value customers perceive. Many of them won’t tell you, especially if they think you’ll...
View ArticleTo Groupon or Not to Groupon?
Groupon has taken the local deal market by storm, growing quickly to $2B in revenue (depending on how you define “revenue”). The local deals company has also created massive buzz and is now preparing...
View ArticlePrice Increase through Reverse Volume Discount
It’s no secret that companies often change package sizes to mask or soften price increases. Coca Cola is going one step further, touting it’s 16oz bottles as “more for your buck” at $0.99. Want more...
View ArticleClik here to view.
Selling a Commodity for a Premium Price
How can you charge more for a commodity? Here’s one of my favorite examples. 24 ounces of ketchup at $0.07/oz. Turn that idea on its head. 32 ounces at $0.079/oz. The price per unit goes up almost...
View ArticleAmazon Enters the Tablet War for Real, and at $199
As expected, Amazon this week launched a new media tablet, the Kindle Fire, at a $199 price point. This immediately started the debate about whether the Kindle Fire was an iPad killer. Indeed, this...
View ArticleRestaurant Pricing– Food for Thought
(Guest post by Peter Maniscalo.) My wife and I recently visited one of our favorite local restaurants (a “Bar & Grill” as it’s called). We’ve been loyal customers for several years. It’s a nice...
View ArticleWill Amazon Offer Kindle for Free?
Farhad Manjoo had a provocative piece at Slate, predicting that Amazon will soon start giving away Kindle readers. Fellow pricing geek, Rags Srinivasan and I got into a Twitter discussion, with Rags...
View ArticleWhy Variable Pricing Fails at the Vending Machines
The New York Times (free registration required) ran a piece on variable pricing today called Why Variable Pricing Fails at the Vending Machines. The article centers on Coca Cola’s infamous proposal to...
View ArticleSaks Submits Documents in Markdowns Lawsuit
As noted earlier, clothing vendors have started suing retailers over payments. The heart of the matter is the actual price the customer pays for the merchandise, which then gets divided between the...
View ArticleBear Stearns Cites Pricing In Anheuser-Busch Downgrade
Bear Stearns downgraded the beer giant, noting that they are “highly skeptical of the company’s aggressive price discount strategy.” AB’s aggressive pricing is confusing to me. They have generally...
View ArticleIn Console Wars, Savvy Pricing Shots
New product launches always involve (ok, should always involve) careful price planning. The market for video game consoles highlights various aspects of pricing strategy quite nicely. Companies must...
View ArticleThe Best Retail Pricing Strategy Ever?
Retail pricing is brutal, right? Well, for a long time, you could escape the commoditization of retail products by simply pricing higher. Price your wine at $100 per bottle and tell people that only a...
View ArticleRetailers Expect Tough Pricing Season
The New York Times (free registration required) posted Let the Price Wars Begin, noting that higher gas prices are cutting into the budgets of many shoppers. This has prompted retailers like Wal-Mart...
View ArticleWhen the Price is the Value, Can You Price too High?
The value of many luxury items is that they have no intrinsic value, but their conspicuous consumption demonstrates the wealth and social standing of the buyer. You can therefore charge much higher...
View ArticleThe Price of a Good Night’s Sleep
How much would you pay to sleep well? For someone who sleeps like a log on a 10-year-old, $400 mattress, the answer is probably: not much. For people who don’t sleep well, or don’t get enough sleep,...
View ArticleSupreme Court Looks at Pricing Agreements
The United States Supreme Court has taken on a case involving the legality of minimum pricing agreements. A small retailer in Texas cut prices on womens’ fashion accessories in response to similar...
View ArticleWhy Starbucks Coffee Is Cheap
Starbucks gets a lot of attention in the pricing world for their ability to charge $4+ for coffee. There are good reasons they can do this (selling something physically addictive doesn’t hurt), but...
View ArticleAbusive Pricing?
Jason Calconis has a funny post about a hotel charging $2.80 for a cup of coffee. I’m not sure how much you get to complain about coffee when you have a $400 hotel room, but the point is legit. People...
View ArticleBarker to Retire from “The Price Is Right”
Some light news for a Friday afternoon: TV show host Bob Barker will retire from “The Price is Right” after 35 years. The post Barker to Retire from “The Price Is Right” appeared first on Mimiran.
View ArticleBlockbuster Goes after Netflix with Pricing
Punished by the the popularity of cheap DVDs, video-on-demand, and the Netflix DVD-rental-by-mail service, Blockbuster announced further price cuts on its subscription plans. These plans allow...
View ArticleThe Math of Multiple Discounts
Recent research by Akshay Rao and Haipeng Chen confirms that people have a hard time processing a sequence of percentage discounts. For example, if you have a $100 item at 20% off, and then take...
View Article5 Ways NOT to do Promotions
From Mental Floss, here are 5 Ballpark Promotions that Went Wrong. Example number 1: 10-cent beer night. The post 5 Ways NOT to do Promotions appeared first on Mimiran.
View ArticleReference prices
An alert reader sent in an article from the Wall Street Journal (free for one week) called The Psychology of the $14,000 Handbag, which delves into why stores offer, well, $14,000 handbags, and what...
View ArticleWho can sell $300 socks?
There’s an interesting article over at Fast Company on The Inevitability of $300 Socks, which talks about the formerly incredible notion of paying $300 for jeans. Remember when $50 jeans were...
View ArticlePromotion Addiction
One of the challenges of using promotions effectively is that the more successful they seem initially, the more detrimental they can be over the long run. The reason is that the condition buyers to...
View ArticleUnbundling the food and the seat
No, we’re not talking about airlines, we’re talking about restaurants. People in Europe are used to this already, but as an American visiting the UK recently, it was slightly surprising to see...
View ArticlePrice of 12 Days of Christmas hits all-time high
According to PNC, the price of the “12 Days of Christmas” (Christmas Price Index, or CPI) rose 3.1%, driven by the rising price of gold and the minimum wage hike, which increased the cost of...
View ArticleBack from the Writers’ Strike– A Daily Show and This Blog
As you may have noticed, the quantity and quality of posts has suffered since my writers have gone on strike. But like The A Daily Show, we’re back. Fittingly, when Jon Stewart returned to the studio...
View ArticleFrench Court Rules Free Shipping Illegal
A French court ruled that Amazon’s free shipping policy violates a law that forbids booksellers from discounting more than 5% off list price. Rather than stopping the practice, Amazon has upped the...
View ArticleIn Luxury Goods, Price is Part of the Value
Luxury vendors have long known that high price is part of their appeal. Not the price per se, but the exclusivity that comes with it. Like a peacock’s tail, the conspicuous consumption of goods that...
View ArticlePricing Advice from the World’s Oldest Profession
For many people watching the Elliot Spitzer scandal unfold, the shocking part of the story was not that a powerful politician went to a prostitute. That seems almost retro these days. What seemed...
View ArticleLuxury Pricing: Top This!
Although I’ve said before that with luxury items, the price is the value, I’m still occasionally astounded. Now along comes one of the most absurd items I’ve ever seen. Swiss watchmaker Romain Jerome...
View ArticleWhen Buying Larger Quantities is a Worse Deal
When you buy in bulk, you typically get a better deal. On a per-unit basis, it’s cheaper to buy a 32-pack of Coca Cola at Costco than a single can in a convenience store. The same concept applies in...
View ArticleThe Psychology of Price Increases
In last week’s post How to Raise Prices, I referenced two interesting articles on techniques for raising prices, and also suggested using unbundling to differentiate between customers who want maximum...
View ArticleAn Innovative Way to Sell $50 T-Shirts
Here’s an interesting pricing model for t-shirts. 200nipples (yes, even the name is, umm, remarkable) sells limited edition runs of 100 tshirts. The first shirt costs $1, the second $2, all the way up...
View ArticleYou Don’t Have a Supply Problem, You Have a Pricing Problem
This is one of my favorite maxims for companies that say they can’t keep up with business. (Granted, it’s a great problem to have.) Seth Godin phrases it slightly differently, writing “scarcity is a...
View ArticleI Am Rich– No More
We’ve had other discussions about how for some luxury goods, the exorbitant price is part of the value (see $300,000 watches that only tell you whether it’s day or night). Meanwhile, as some of you may...
View ArticleThe reverse volume discount
Generally, per-unit prices go down as volumes go up. This is not always the case, however. Occasionally, whether by accident or as a tax on the mathematically disinclined, you’ll see something like...
View Article
