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Author Mak, Vincent, author

Title When Customers Help Set Prices / Mak, Vincent
Edition First edition
Published MIT Sloan Management Review, 2014
Online access available from:
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Description 1 online resource (8 pages)
Summary For most companies, pricing has always been a sensitive, private affair. This article is directed at managers who seek to profit from product differentiation and take maximum advantage of their ability to stand out. Instead of leaving good money on the table and struggling to convert product differentiation into revenue, the authors argue, companies should consider enlisting the pricing help of their customers. Outsourcing pricing isn't an all-or-nothing proposition. Managers can select pricing models ranging from complete oversight to complete delegation. Citing examples from companies including Google, Uber, Orbitz, Volkswagen, Coca-Cola and Humble Bundle, the article integrates classic views on pricing with the latest research and practice to develop a simple framework to help managers decide how much pricing control they should retain and how much they should relinquish to customers. For most businesses, the default approach is having a single fixed price and selling to anyone willing to pay that amount. However, authors Marco Bertini and Oded Koenigsberg argue that this is economically inefficient: Those prepared to pay more in effect receive a discount; those willing to pay less (but an amount that's still profitable) are turned away. For companies interested in interactive approaches to pricing, the authors discuss three collaborative models: auctions, name-your-own-price auctions and negotiations. In the authors' view, asking customers to weigh in on price can have benefits that go beyond promoting greater efficiency. It can promote customer engagement, provide opportunities for customization, allow managers to signal information about their company or product and open up opportunities for increasing market share
Notes Mode of access: World Wide Web
Copyright © 2014 MIT Sloan Management Review 2014
Issuing Body Made available through: Safari, an O'Reilly Media Company
Subject Data mining.
Form Electronic book
Author Fay, Scott, author
Shapiro, Dimitry, author
Montgomery, A. (Alan), author
Gneezy, Ayelet, author
Spann, Martin, author
Smith, Gerald, author
Koenigsberg, Oded, 1964- author
Bertini, Marco, author
Safari, an O'Reilly Media Company