Special report - Pricing
This quarter's report deals with the practical aspects of pricing strategy, from market positioning of new products to through to those at the end of their life cycle.
A cynic is the man who knows the price of everything and the value of nothing’ according to Lord Darlington in Lady Windermere’s Fan, and whilst clever and witty, the implication is that non-cynics fully understand the value of everything – an unlikely scenario. Value (utility) is so subjective and dependent on the financial and emotional circumstances of the individual and the market that any set price paid for goods and services will be seen as a bargain by some and terribly expensive by others.
The price of a good should equate to the value that individuals ascribe to it in a perfect market. This would necessitate individual pricing for goods and services, creating a chaotic market. Airlines have been operating this kind of system for a while with success, but thanks to internet shopping, any company is able to work with individualised pricing based on the customers’ post codes and the buying patterns and other data gathered.