TITLE

The Competitive Advantage

AUTHOR(S)
Matanovich, Tim
PUB. DATE
November 2004
SOURCE
Marketing Management;Nov/Dec2004, Vol. 13 Issue 6, p16
SOURCE TYPE
Periodical
DOC. TYPE
Article
ABSTRACT
This article looks at the pricing process implemented by some U.S. companies and its impact on a company's business. With a day-to-day, in the trenches understanding of their markets, account executives may be in the best position to set prices. They know their clients, they often know their primary competition, and they know their costs. They know whether their markets are prospering or in the dumps. Finally, with their compensation based on margin, they live or die by their daily price decision. With no guidelines for setting prices, there is likely a high degree of variance in pricing practices nationwide. In one sense, that should be no surprise. Price levels are often markedly different in different locations. Good pricing process forces a look at the profit consequences of alternative solutions, aligning bottom-line with top-line results. Once again, in a labor-intensive business like market research, cost savings can easily run to six figures. Lower costs and a better understanding of those costs also create a competitive advantage in bidding situations. Given the rise of reverse auctions and electronic markets, that's becoming increasingly important. Not only will understanding costs give a company greater bidding flexibility, it will also permit companies to make more money when they do win. Maybe, most important, it helps to know when to walk away.
ACCESSION #
15309763

 

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