PRO Article
The Top 5 Myths of Strategic Pricing
The devil really is in the details. You've heard that old saw before, but when it comes to strategic pricing, the devil is also sneaking around your strategy. As a result, someone in your organization is making mistakes today that you'll need to correct.
Pricing Strategy Run Amuck
Over and over again, we see companies making fundamental blunders in their pricing strategy and actually thinking they're making sound business decisions.
Their typical problem: basing pricing decisions on conventional wisdom, rules of thumb and sometimes over-relying on "scientific" data analysis. Across the board, managers have absorbed these "worst practices," and they unknowingly make poor decisions that undermine their businesses.
A common reason for such poor decision making is that managers carry those rules and techniques from one competitive environment into another. What may work in one situation becomes merely myth in another. Are you buying into any of the following myths?
Myth 1: You can't raise prices and volume at the same time
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John E. Hogan is vice-president and director of research in the Boston office of Strategic Pricing Group. He can be reached at jhogan@spgconsulting.com. To register to receive SPG Insights, visit www.strategicpricinggroup.com.
Joe Zale is director of research and vice-president & managing director in the Boston office of Strategic Pricing Group. He can be reached at jzale@spgconsulting.com.
