MIT Sloan Management Review highlight price setting and pricing getting require discipline – not luck. Almost any business can improve its pricing performance, provided it approaches pricing in a structured way.
How could companies go about reconsidering their pricing strategy? – The first area that may require a fundamental rethink is the way companies set prices. Many companies have a significant opportunity to differentiate themselves from competitors by learning how to create, quantify, communicate and capture customer value by implementing customer value-based pricing strategies.
A second area concerns price realization – that is, the process of translating list prices into profitable pocket prices. Here, many companies lack the information systems, negotiation capabilities, incentive schemes, controlling tools and sales personnel confidence leading to superior price realization. Small improvements in any of these areas lead to quantifiable results very quickly.