Pricing Theory

Article archives from the Pricing Pricing Society

The Unified Theory of Pricing

In this article, the authors present a unified pricing theory, manifested in a tool called the Strategic Pricing Hexagon, that brings together all the disparate pricing ideas, and the drivers and forces behind them, into one master structure. This article shows how the Strategic Pricing Hexagon allows leaders to look beyond the numbers and develop a pricing strategy that can change the entire trajectory of their business and their market.

How to Play the Pricing Game

Why do people disagree on what prices to charge? Because pricing is a game, in the game-theory sense, and by definition a game cannot be solved. In this article, the author explores why we might be startled, even shocked, by disagreements when making pricing (and related) decisions, using over 16 billion simulated futures from the Top Pricer Tournament™, based on pricing strategies submitted by 2,239 executives, managers, consultants, students, and professors.

Solving the Paradox of Fair Prices

Charging different prices is often fairer than charging everyone the same price. While there are no standard answers to the question of what makes a price fair, business leaders can embrace market transparency, understand what drives the perceptions of fairness in their market, and ensure that they offer prices that customers will perceive as fair. With the right understanding and the right approach, companies can vary prices in ways that mutually benefit themselves and customers, and perhaps society as well, as the author explains.

The Price Whisperer: A Holistic Approach to Pricing Power

This article is a sneak peek at Per Sjofors’ upcoming book “The Price Whisperer.” You can order a copy here. This book explores the complex network of variables that regulate customer perception of price and value, that is, why people buy one product and not another. By isolating key factors that determine a target market’s willingness to pay, businesses can effectively hack their existing model, thereby increasing asking price and sales volume.

How to leverage Loss Aversion/Prospect Theory for pricing negotiation

In this article, the author explains the psychological phenomenon of “loss aversion” and how it can be applied in pricing strategy. Raymond Augustin is a recognized thought leader, specializing in pricing strategy. He has, as the COO of Virtual Procurement Services (VPS), provided guidance to dozens of healthcare organizations and tribal gaming operations on purchase price methodology and analytics.

The Real Commodity Trap

Stephan M. Liozu is Chief Value Officer of the Thales Group (www.thalesgroup.com). He is also an Adjunct Professor & Research Fellow at the Case Western Research University Weatherhead School of Management. He holds a Ph.D. in Management from Case Western Reserve University (2013), is a Certified Pricing Professional (CPP), a Prosci® certified Change Manager, and a Strategyzer Business Model Innovation Coach. He authored three books, Dollarizing Differentiation Value (2016), The Pricing Journey (2015) and Pricing and Human Capital (2015). He sits on the Advisory Board of LeveragePoint Innovation and of the Professional Pricing Society. He is a Strategic Advisor to 360pi, The Kini Group, and PriceSenz. He can be reached at sliozu@gmail.com.

By |2023-10-21T19:04:03+00:00January 31, 2018|Commodity, Pricing Articles, Pricing Theory|0 Comments

Valuing Benefits: Weighted Average or Economic Impact?

In this article, the author explains why he recommends Exchange Value to Customer calculations according to economic factors, rather than weighted average benefits, when pricing in industrial markets. This industrial markets specific example provides valuable pricing questions and insights that can be utilized by pricers in multiple industries.

By |2024-02-17T19:46:50+00:00September 30, 2017|Pricing Articles, Pricing Strategy, Pricing Theory|0 Comments

Price is a Verb

What do executives get wrong about pricing? They treat it as a noun not as a verb. Treating price as a verb drives executives to define the culture, organizational structure, and process for making pricing decisions. Leading firms do this. Failing firms don’t, as the author explains.

By |2023-11-05T18:37:33+00:00January 31, 2017|Pricing Articles, Pricing Theory|0 Comments
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