For a long time now, the practice of product pricing has involved more art than science, with product managers and sales professionals governed mostly by what "felt right." In recent years, however, science has started to gain the upper hand, and the sun may be setting on the era of "pricing by the gut."
In manufacturers' never-ending quest to turn over every stone that may yield better profits and allay the pressures of a bustling global marketplace, the list of strategies is long and growing: business-spanning ERP systems, lean manufacturing, collaborative networks that tie in partners across the supply chain, and outsourced labor, to name a few. An item that only recently made the list is one that seems the most obvious, at least in retrospect: pricing science.
Many in the pricing field have agreed, asking the question:
Despite its direct impact on margins, price is easily the most neglected aspect of operational infrastructure. So why is price strategy and optimization all too often neglected?
Post your thoughts and weigh in your opinions about why pricing is often treated so casually, despite its importance to profitability, especially in economic conditions like we are currently facing.
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