Paying a High Price for Discount Management Methods?

U.S. retailers reported a 2.7% sales increase this holiday season despite succumbing to consumer pressure for deep discounts well before Black Friday. Proof that a discount pricing strategy is useful for driving traffic and short term sales – but is good for long term profit margins?

Tim Smith, Ph.D., CPP,
Founder and Managing
Principal of Wiglaf Pricing

How can discounting increase your profit margin long term?

Does discounting damage your market position and brand loyalty?

Discounting isn’t something most executives like to do since it can consume resources and cause organizational strife.  Yet, when properly managed, this form of price segmentation improves profitability. When not properly managed, discounts wreak havoc on profits.

Using in class exercises, Tim J. Smith, Ph.D., CPP, will apply quantitative approaches to monitoring discounts, enabling participants to use these techniques on their own company’s datasets. Pricing executives and analysts who attend can expect to discuss:

• How discounting can improve profitability, lower market entrance prices, and increase volumes
• Quantitative methods for measuring and monitoring discounting policy
• Managerial and quantitative tools for restraining discounts
• The influences of Prospect Theory and competition on discounting policy

Dr. Smith will be leading the workshop Advanced Quantitative Methods in Discount Management at the PPS 2nd Annual Asia-Pacific Pricing Workshops and Conference in Singapore this April.

How to Increase Prices Without Affecting Sales Volume

Pricing has a direct impact on a company’s bottom line.

So why is pricing often not considered an executive management task? 

Can a company develop an affective overall strategy and not take into account buyer’s perception of value, let alone pricing?

All good pricing decisions must involve managing price differentials. Buyers have certain behavioral and cognitive boundaries, and it is critical you understand these boundaries to maximize profit. You can increase prices and not affect your sales volume if the pricing is right.

Determining the Right Price:

At what point does a customer decide the price is too high for your product? In discussing this turning point, we must understand that buyers do not see pricing as absolute. We need to de-termine the tipping point between the customer purchasing your product and your customers deciding the price is too high. It is important to remember that just because you change prices, doesn’t mean you change the customer’s purchasing behavior.  Pricing is seen as a reflection of quality and product/service.

During the PPS 2nd Annual Asia-Pacific Pricing Workshops and Conference in Singapore, you can attend a full-day workshop entitled Managing Price Differentials: An Executive Perspective, Dr. Kent B. Monroe and Lillian Cheng give an executive summary of price differentials, examining how consumers respond to various differential thresholds.

Who Should Attend this Workshop:

This workshop is ideal for those who have a broad range of questions regarding the importance of pricing differentials. Specific topics such as understanding how pricing strategies define pricing tactics,  the role of the executive in pricing, and how to increase prices without affecting sales volume, among others topics, are discussed.

Dr. Monroe is the founding editor of Pricing Practice and Strategy and is J.M. Jones Professor of Marketing Emeritus, University of Illinois at Urbana - Champaign. Ms. Cheng is a partner at Cheng, Monroe, and Associates and co-author of An Appraisal of Behavioral Price Research (Part 1)  and  An Appraisal of Behavioral Research (Part 1).

Introducing our new Pricing Channel on YouTube!

The Professional Pricing Society is delighted to introduce our new Pricing Channel on YouTube! The Pricing Channel will be brimming with:

• Free educational videos from the pricing profession’s top experts.
• A digital library filled with pricing tactics and topics from the world’s best pricing experts and software innovators.
• Practical insights on the expanding roles of pricing in C-Level decision-making.

Our first wave of 16 Pricing Videos are now uploaded so SUBSCRIBE to the Pricing Channel right away at

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