Pricing is the Moment of Truth!

"Pricing is the moment of truth - all of marketing comes to focus in the pricing decision."
(Professor E. Raymond Corey of Harvard Business School, 1962).

Many of the companies I have worked for have had no pricing strategy or accountability, pricing being something that just happened. When costs go up, just put the price up; when competition comes along, or wakes up, then just match the price. This is remarkable if you think about it, because I’m talking about some big players.

Again, most businesses I have worked for had no one specifically responsible for pricing; yes someone was responsible for up-loading onto the system, but this was not a strategic operation, or even a tactical one come to that, just an operational one.

‘Finance’ says that costs have gone up say 3%, or 5% and this is added on and Excel does the rounding.

Ha! Actually not; how many times have I seen a case price that is not divisible by the number of units it contains? – I love those!

This lack of attention to pricing costs businesses dearly and may have cost some their existence. Pricing strategy should be approved and championed by the senior management and somebody, somewhere (not the purchasing department!) should have responsibility for its crafting and implementation.

If you don’t have a pricing strategy, your profits will bleed away!

Crockett, Tuesday, 19 December 2006