 The price is right? Guidelines for pricing to enhance profitabilityChiranjeev Kohli and Rajneesh Suri Business Horizons, 2011, vol. 54, issue 6, 563-573 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. Keywords: Pricing; Profitability; Pricing strategy; Pricing research; Base price; Price modification; Transaction price (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:bushor:v:54:y:2011:i:6:p:563-573 DOI: 10.1016/j.bushor.2011.08.001 Access Statistics for this article Business Horizons is currently edited by C. M. Dalton More articles in Business Horizons from Elsevier |
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