teachthe4ps.com » Price

“Yes, You Can Raise Prices in a Downturn”

Joe Cannon — Wed, 28 Jul 2010 23:11:01 +0000

Frank Cespedes and Ben Shapiro have had a big influence on how I look at B2B marketing. I often use cases and articles they have written when I teach my MBA classes, and their ideas have influenced my research program and text book. This article “Yes, You Can Raise Prices in a Downturn,” (Harvard Busienss School Working Knowledge, July 26, 2010) is an interview with the two Harvard professors about pricing. This might be a bit much for our undergraduates, but the reading would work well for MBA students. Plus, you can certanly glean ideas to bring to your undergraduate discussions of pricing.

“Evernote CEO Phil Libin’s 3 Steps to ‘Freemium’ Success”

Joe Cannon — Tue, 27 Jul 2010 00:23:56 +0000

We have a boxed teaching example on “freemium” in one of our pricing chapters. Freemium refers to “giving away service to users and making money when some opt to pay for additional features.” Evernote, a suite of software and services used for taking and storing notes, has used the freemium business model with great success. This Fast Company article, “Evernote CEO Phil Libin’s 3 Steps to ‘Freemium’ Success” (July 1, 2010) describes how it works with real number examples.

“The real reason why consumers won’t pay online”

Joe Cannon — Mon, 26 Jul 2010 18:28:36 +0000

This is a great article to use when you introduce Price. I do a lot of shopping online — most of it at Amazon and Apple’s iTunes store. They make paying easy. I like to tell my students that the price can include the hassle of paying — so how do you reduce the hassle. Might stimulate a good in-class discussion, too. See “The real reason why consumers won’t pay online” (Fortune, July 24, 2010).

“P&G Makes Push in India”

Joe Cannon — Mon, 05 Jul 2010 20:39:59 +0000

This short Wall Street Journal article, “P&G Makes Push in India” describes P&G’s efforts to make inroads in India (June 22 – note that this requires a subscription, my link takes you to a search result which provides a backdoor to the article). India is the world’s second largest (by population) consumer market — and it is growing at 12% a year. Yet P&G faces tough competition from well established Hindustan Lever.

“How PepsiCo Refreshed Its SoBe Water Brand”

Joe Cannon — Wed, 30 Jun 2010 14:22:19 +0000

Here is a nice little case study. In “How PepsiCo Refreshed Its SoBe Water Brand,” (Bloomberg BusinessWeek, June 24, 2010) you can read how some great web advertising and a price cut combined to help Sobe sales grow by 85%.

“Panera to open more pay-what-you-wish restaurants”

Joe Cannon — Mon, 28 Jun 2010 13:17:25 +0000

When we first reported on Panera’s plans to open a restaurant where patrons can pay what they want, we wondered if it would work. In fact, I noted we would check back on this in a year or two. Well, less than two months later, we have an update. Panera must feel the concept has potential, and they are opening more of the restaurants. For an update, see “Panera to open more pay-what-you-wish restaurants,” (USA Today, June 27, 2010).

“Pricing Baseball Tickets Like Airline Seats”

Joe Cannon — Tue, 08 Jun 2010 19:04:08 +0000

We are all familiar, at least with the concept, of dynamic (or time-based) pricing. Airlines are the most common example, raising and lowering fares over time on a particular flight to optimize the number of passengers and profits. Many services have very low marginal costs — for example it costs very little to add one more passenger to a flight that is not full. Well now a recently minted Economics PhD has developed models to do this for sports tickets — and the San Francisco Giants (baseball) are using it to adjust prices. It is nice to give an example that is not from the airline industry. Check out. “Pricing Baseball Tickets Like Airline Seats” (Bloomberg BusinessWeek, May 20, 2010).

Creative Pricing Strategy – Pay What You Can

Joe Cannon — Tue, 18 May 2010 13:58:51 +0000

What if you had a restaurant where you could take what you wanted and pay what you wanted – with a donation. As a marketing professor, I think about this as a pricing strategy. I also think about it from the perspective of non-profit marketing. Check out the article “Non-profit Panera cafe: Take what you need, pay what you can,” (USA Today, May 18, 2010) for more details. Will enough people donate enough to make this work — it will be interesting to check back in a year or two.

“Shoppers weigh up green premiums”

Joe Cannon — Tue, 04 May 2010 13:30:46 +0000

I believe that the discussion of a “green premium” makes for a great marketing discussion. In essence we are trying to teach our students to address target customer needs by designing a marketing mix that addresses customer needs. We also talk about the importance of differentiation. This article “Shoppers weigh up green premiums,” (CNN.com, May 4, 2010) includes an example of a shop selling organic produce in London. The video describes the results of a survey that offers surprising results on the number of people willing to pay a green premium. I found a bit more on that survey in this article, “UK consumers will pay more for green, but not much more” (Green Wise, September 29, 2009). A class discussion might also be an opportunity to raise the point (alluded to in the video) about whether attitudes expressed in a survey align with behavior.

“Web Coupons Know Lots About You, and They Tell”

Joe Cannon — Mon, 19 Apr 2010 00:53:59 +0000

Wow! I am continually amazed at how our privacy is compromised on the web. Interestingly, I am not sure our students care all that much — they post on Facebook about their love, life, and escapades where it is broadcast to their 684 “friends.” Anyway, be wary when you use web coupons because “Web Coupons Know Lots About You, and They Tell,” (The New York Times,April 16, 2010). In our books we discuss privacy in the last chapter — so it might fit as an example in these last weeks in class. It might also be a useful ethics topic in pricing.