Journal article
The price is right? Guidelines for pricing to enhance profitability
Business horizons, v 54(6), pp 563-573
2011
Abstract
Pricing is a key element of the marketing strategy. It does not require significant investments or resources, and is perhaps the most accessible lever to manage profitability. Even minor fluctuations in pricing can have a significant impact on both revenues and profitability. As such, lack of careful planning in pricing is a wasted opportunity. With this as a backdrop, we make a case for precision in pricing to enhance profitability. Since consumers vary in their preferences, motivations, and propensity to spend, they assign varying degrees of emphasis regarding price upon their purchase decisions. We argue that pricing is a creative exercise in math and behavioral economics, and companies should stay focused on profits. We also provide a series of guidelines for creating effective base prices, and then modifying them to enhance profitability. Finally, monitoring prices at the transaction level will reduce leakage in profits and further add to the bottom line.
Metrics
Details
- Title
- The price is right? Guidelines for pricing to enhance profitability
- Creators
- Chiranjeev Kohli - California State University, FullertonRajneesh Suri - Drexel University
- Publication Details
- Business horizons, v 54(6), pp 563-573
- Publisher
- Elsevier
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Bennett S. LeBow College of Business
- Web of Science ID
- WOS:000296301600009
- Scopus ID
- 2-s2.0-80053443425
- Other Identifier
- 991019167990204721
InCites Highlights
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- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Business